Economics

Question 1

1Cost-push inflation is caused by

Hard

A. falling wages B. excess demand C. rising production costs D. falling import prices

Question 2

2The demand for money for day-to-day purchases is the

Hard

A. investment motive B. precautionary motive C. speculative motive D. transactions motive

Question 3

3Deflation is

Easy

A. a persistent fall in the general price level B. a rise in exports C. a rise in prices D. a fall in output

Question 4

4The marginal propensity to consume is 0.8. The investment multiplier is

Hard

A. 1.25 B. 0.2 C. 5 D. 8

Question 5

5Bank of Ghana raising the policy rate is intended to

Hard

A. raise money supply B. reduce inflation C. increase borrowing D. weaken the cedi

Question 6

6Commercial banks create credit mainly by

Easy

A. printing money B. fixing exchange rates C. collecting taxes D. lending out a part of their deposits

Question 7

7With a reserve ratio of 10%, a deposit of GH¢1,000 can create total deposits of

Hard

A. GH¢9,000 B. GH¢1,100 C. GH¢10,000 D. GH¢100

Question 8

8If consumption is C = 50 + 0.75Y, the MPS is

Hard

A. 0.75 B. 0.25 C. 1.33 D. 50

Question 9

9An open market sale of securities by the central bank will

Hard

A. reduce interest rates B. increase bank reserves C. reduce money supply D. increase money supply

Question 10

10GDP plus net income from abroad equals

Easy

A. NNP B. GNP (GNI) C. disposable income D. per capita income