What is output per unit of input called?
Correct answer: C
Higher productivity means more output for a given input.
Economy
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Which sector includes manufacturing?
Correct answer: A
It transforms materials into products.
Which good is both non-rival and non-excludable in the standard economic definition?
Correct answer: D
One person's consumption does not reduce another's and exclusion is difficult.
Which market has a single seller and significant entry barriers?
Correct answer: C
A monopoly lacks direct sellers of the same product in its market.
Which unemployment reflects a mismatch between workers' skills and available jobs?
Correct answer: D
Changes in production can alter the skills employers need.
What is a cost imposed on others without compensation called?
Correct answer: A
Pollution is a common example of an external cost.
Which GDP measure uses current-period prices?
Correct answer: B
It can change because of both prices and quantities.
What is a sustained fall in the general price level called?
Correct answer: D
Deflation differs from a slowdown in inflation.
What is the difference between total expenditure and receipts excluding borrowings called?
Correct answer: A
It measures the government's borrowing requirement under this definition.
What is the excess of revenue expenditure over revenue receipts called?
Correct answer: C
It indicates that revenue receipts do not cover revenue spending.
What is a sustained rise in the general price level called?
Correct answer: D
It concerns the general price level rather than one isolated price.
Evaluate the two proposed answers. Which are supported? I. Underemployment — the interpretation: Employment using less labour time or skill than available. II. Current account — the interpretation: Market fall in a currency's external value.
Correct answer: C
I is correct: Underemployment → Employment using less labour time or skill than available. A person may be employed yet insufficiently utilised. II is incorrect: Current account → External account covering goods, services and income flows. It also includes current transfers.
For Human Development Index, identify the interpretation.
Correct answer: D
It is broader than income alone.
Evaluate the two proposed answers. Which are supported? I. Import tariff — the interpretation: Cross-border investment involving lasting influence in an enterprise. II. Poverty gap — the interpretation: Meeting present needs while preserving future generations' ability to meet theirs.
Correct answer: B
I is incorrect: Import tariff → Tax imposed on imported goods. It raises the landed cost unless absorbed elsewhere. II is incorrect: Poverty gap → Average shortfall below a poverty threshold under the chosen measure. It captures depth rather than only headcount.
For Comparative advantage, identify the interpretation.
Correct answer: A
Trade gains need not require an absolute productivity advantage.
Evaluate the two proposed answers. Which are supported? I. Structural transformation — the interpretation: Employed persons plus unemployed persons seeking or available for work under the measure. II. Demographic dividend — the interpretation: Dependants relative to the working-age population.
Correct answer: C
I is incorrect: Structural transformation → Shift in economic activity across sectors. Development often changes employment and output shares. II is incorrect: Demographic dividend → Potential benefit from a larger working-age population share. Realising it requires productive employment and capabilities.
For Foreign direct investment, identify the interpretation.
Correct answer: B
It differs from merely holding a small tradable security portfolio.
Evaluate the two proposed answers. Which are supported? I. Human Development Index — the interpretation: Composite of health, education and income dimensions. II. Labour force — the interpretation: Output per unit of labour input.
Correct answer: A
I is correct: Human Development Index → Composite of health, education and income dimensions. It is broader than income alone. II is incorrect: Labour force → Employed persons plus unemployed persons seeking or available for work under the measure. It is not the entire population.
For Currency depreciation, identify the interpretation.
Correct answer: C
It differs from an official devaluation under a fixed-rate arrangement.
Evaluate the two proposed answers. Which are supported? I. Poverty gap — the interpretation: Shift in economic activity across sectors. II. Import quota — the interpretation: Cross-border investment involving lasting influence in an enterprise.
Correct answer: B
I is incorrect: Poverty gap → Average shortfall below a poverty threshold under the chosen measure. It captures depth rather than only headcount. II is incorrect: Import quota → Quantitative limit on imports. It restricts volume rather than imposing only a tax.
For Structural transformation, identify the interpretation.
Correct answer: D
Development often changes employment and output shares.
Evaluate the two proposed answers. Which are supported? I. Sustainable development — the interpretation: Employment using less labour time or skill than available. II. Comparative advantage — the interpretation: Systematic record of transactions between residents and non-residents.
Correct answer: C
I is incorrect: Sustainable development → Meeting present needs while preserving future generations' ability to meet theirs. It links economic, social and environmental objectives. II is incorrect: Comparative advantage → Lower opportunity cost of producing a good. Trade gains need not require an absolute productivity advantage.
For Dependency ratio, identify the interpretation.
Correct answer: A
It is an age-structure indicator.
Evaluate the two proposed answers. Which are supported? I. Trade balance — the interpretation: Merchandise exports minus merchandise imports. II. Balance of payments — the interpretation: Potential benefit from a larger working-age population share.
Correct answer: C
I is correct: Trade balance → Merchandise exports minus merchandise imports. It excludes services from the merchandise measure. II is incorrect: Balance of payments → Systematic record of transactions between residents and non-residents. It includes current and capital/financial transactions.
For Import quota, identify the interpretation.
Correct answer: A
It restricts volume rather than imposing only a tax.