University of Bedfordshire Business School
Department of Law and Finance
AAF036-2
Economics for Business
MAIN EXAM
ACADEMIC YEAR 2022-23 (SEM2)
Date of Exam: TBC
Start Time: TBC
Time Allowed: Two hours
Unit Co-ordinator: Zahera Mohammad
INSTRUCTIONS TO CANDIDATES
You must answer all multiple-choice questions in Part A.
You must answer all questions in Part B
You must write your answers for Both Parts A&B in the Answer Booklet.
PLEASE DO NOT OPEN THIS PAPER UNTIL INSTRUCTED TO DO SO BY THE
SENIOR INVIGILATOR
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, Part A: Multiple Choice Questions 60 marks
Choose the one alternative that best completes the statement or answers the
question.
1. Which of the following correctly defines inflation?
a) Inflation is the aggregated level of prices of essential goods in an economy.
b) Inflation is an absolute measure of the prices of all the goods produced in an
economy.
c) Inflation is the average level of prices in an economy.
d) Inflation is the rate of change in the average price level in an economy.
2. GDP (gross domestic product) measures the _____.
a) total output produced by an economy in a given year
b) total output, including net exports, produced in an economy in a given year
c) total payment made to factors of production in a given year
d) the amount of taxes collected by the government in a given year
3. What is meant by a trade deficit?
a) Trade deficit is the difference between producer surplus and consumer surplus.
b) Trade deficit is the difference between the price paid for a good and the cost of
making it.
c) Trade deficit is the difference between exported and imported goods and services.
d) Trade deficit is the difference between the government's revenues and expenditures.
4. The level of unemployment in an economy is measured as:
a) the total number of individuals in the economy who are not working.
b) the number of individuals seeking work that do not currently have a job.
c) the number of individuals in the economy who are not eligible to work.
d) Unemployment is the total number of individuals who are gainfully employed but are
looking for another job that better matches their skills.
5. The key policy inputs controlled directly by the central bank are _____.
a) the government deficit
b) interest rates
c) the level of government borrowings
d) income tax rates
6. In the circular flow model, the factors of production are owned by _____.
a) firms
b) the government
c) a few rich industrialists
d) households
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