Economics

Question 1

1The incidence of a tax refers to

Hard

A. the tax office B. the date of payment C. who finally bears the burden D. the tax rate

Question 2

2Comparative advantage exists when a country produces a good at a lower

Hard

A. absolute cost B. wage C. opportunity cost D. money price

Question 3

3A country's balance of trade compares

Easy

A. government revenue and spending B. all capital flows C. savings and investment D. the value of visible exports and visible imports

Question 4

4Direct taxes are levied on

Easy

A. goods and services B. imports only C. income and wealth D. exports only

Question 5

5A country exports goods worth $5bn and imports $7bn, with net services of +$1bn. Its current account (ignoring transfers) is

Hard

A. +$3bn B. +$1bn C. −$1bn D. −$2bn

Question 6

6A budget deficit is financed partly by

Hard

A. borrowing B. lowering imports C. saving surplus D. reducing debt

Question 7

7A tax that takes a higher percentage of income as income rises is

Easy

A. indirect B. regressive C. proportional D. progressive

Question 8

8A tax of 15% on all incomes is

Hard

A. proportional B. progressive C. regressive D. indirect

Question 9

9A J-curve effect describes how a devaluation

Hard

A. always improves it immediately B. raises imports permanently C. has no effect D. first worsens then improves the trade balance

Question 10

10Selling goods abroad below their cost of production is

Easy

A. devaluation B. barter C. dumping D. protection