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Which of the following is an invisible import for a country?

A.

Expenditure in its shops by foreign diplomats based in the country

B.

The country's contribution to foreign aid

C.

A foreign company signing a contract guaranteeing to invest in a new factory in the country

D.

Repayment of an IMF loan by the country's government

Which of the following best describes a project that has a negative Net Present Value?

A.

A loss making project

B.

A project that doesn't make enough profit to pay the interest on the money borrowed to invest in it

C.

A project that doesn't make sufficient returns to fully compensate investors for the funds they invest in it

D.

A project that will only start making profits after the present year has finished

The distinguishing feature of a transnational (multinational) company is that

A.

it exports its products to more than one country.

B.

its production process uses inputs from more than one country.

C.

it has production facilities in more than one country.

D.

it has shareholders in more than one country.

A country's gross national product (GNP) will be higher than gross domestic product (GDP) if:

A.

indirect taxes are greater than government subsidies

B.

there is a net inflow of factor payments on the balance of payments

C.

the country's imports are greater than its exports

D.

government tax income is greater than government expenditure

In a customs union member countries

A.

Meet to agree tariff increases affecting internal trade between themselves

B.

Trade freely with each other and impose their own national restrictions on trade with the rest of the world

C.

Trade freely with each other and accept a common external tariff for trade with the rest of the world

D.

Replace national currencies with a common currency such as the Euro

All of the following would result from a shift from direct to indirect taxes except which one?

A.

An increase in the prices of products due to inflation.

B.

A reduction in the disincentive to work and effort.

C.

A more progressive taxation system.

D.

A shift in the burden of taxation towards lower income groups.

A bond has a coupon rate of 7%, a nominal value of $100 and a market price of $140

The percentage running yield is %

All of the following would lead to fall in the circular flow of national income except which one ?

A.

A fall in business investment

B.

A fall in personal savings rates

C.

A reduction in the level of government expenditure

D.

A rise in the marginal propensity to save

Part of a country's unemployment figures will consist of people moving between jobs. Which type of unemployment is this?

A.

Structural unemployment

B.

Cyclical (or demand deficient) unemployment

C.

Frictional unemployment

D.

Real wage unemployment

In a fully employed economy, which one of the following would lead to demand pull inflation?

A.

A reduction in the rate of income tax

B.

A rise in value added tax

C.

An increase in the world price of oil

D.

A rise in interest rates