BSocSc Bachelor of Social Science Bachelor of Social Science Economics 5

Question 1

The Solow growth model attributes long-run per capita economic growth primarily to:

Accepted Answer

Technological progress

Answer

In the Solow model, capital accumulation faces diminishing returns, so only sustained technological progress (total factor productivity growth) drives long-run per capita income growth.

Question 2

When a central bank conducts open market operations by purchasing government bonds, the immediate effect is:

Accepted Answer

Increase in money supply and lower interest rates

Answer

Buying bonds injects reserves into the banking system, expanding the money supply and pushing interest rates downward as loanable funds increase.

Question 3

The Heckscher-Ohlin trade theory predicts that countries will export goods that intensively use their:

Accepted Answer

Most abundant factor of production

Answer

Heckscher-Ohlin theory holds that countries have a comparative advantage in goods that use their relatively abundant and thus cheaper factor of production intensively.

Question 4

A public good is defined by which two properties?

Accepted Answer

Non-rivalrous and non-excludable

Answer

Public goods are non-rivalrous (one person's use does not reduce availability to others) and non-excludable (it is impossible to prevent non-payers from benefiting).

Question 5

Which economic indicator measures the average price change experienced by urban consumers for a basket of goods and services?

Accepted Answer

Consumer Price Index (CPI)

Answer

The CPI tracks the cost of a fixed market basket purchased by typical urban consumers and is the most commonly cited measure of retail inflation.

BSocSc Bachelor of Social Science Practice Test

BSocSc Bachelor of Social Science Practice Test

BSocSc Bachelor of Social Science Bachelor of Social Science Economics 5