Unit 1
Beach is an example of which type of good
Quasi- public good
This has a negative income elasticity go demand
Inferior goods
The word is used when the government directly gives out a merit good
provision
A fall in the rate of inflation from 4% to 2% is called
Disinflation
2 policies used to influence aggregate demand
Fiscal and monetary
The most mobile factor of production
Enterprise
This is the difference between the price consumers are willing to pay for a good and equilibrium price
Consumer surplus
if the same amount of tax would be imposed on all the taxpayers, for example $5 from everyone, the tax is said to be
Regressive
The term used for money that comes into an economy due to high interest rates
Hot money flow
Time lag is the drawback of this policy
Supply-side
One that is subjective about what should happen
Normative statement
Increasing prices would not affect the revenue of a firm when the price elasticity of demand is
Unitary
Housing allowances and food coupons are examples of
Transfer payments
Theory which states that LRAS curve is vertical and that the economy will move towards full employment without government intervention
New classical
A possible drawback of expansionary fiscal policy
hight Inflation rate
Unequal distribution of income is a bigger problem in this particular economic structure
Market economy
Diamonds, shares etc are examples of what kind of goods
Veblen goods
Who made the canons of taxation
Adam Smith
The price of one currency against a basket of other currencies
Trade weighted exchange rate
Policy measures designed to reduce imports and increase exports by reducing demand
Expenditure Dampening policy
Where information failure results in someone who is unsuitable obtaining insurance
Adverse selection
This should ideally be mentioned when evaluation and price elasticity question
Ceteris Paribus
Where impact of a tax is on Producer but incidence is on consumer
Indirect tax
Where trade with a low cost country outside the customs union is influenced by higher-cost products supplied from within
Trade diversion
When will a country's BOP current account deficit be reduced. A- When it lowers import tariffs
B- when it raises income tax
C- when it removes export subsidies
B