11) The demand for a good is totally inelastic with regard to price. What will happen to spending on the product, if the price rises by 20%?
(A) It will fall by 20%
(B) It will fall to zero
(C) It will remain unchanged
(D) It will rise by 20%
12) The term 'real wage' means the money wage:
(A) after tax
(B) allowing for change in prices
(C) plus benefits in kind
(D) plus overtime payments
13) Which type of income is earned only by the factor of production enterprise?
14) What is most likely to increase the level of savings in a country?
(A) a fall in income
(B) a rise in interest rates
(C) fewer tax-free saving schemes
(D) greater availability of consumer goods
15) What will be likely to cause inflation in an economy?
(A) a decrease in the cost of production
(B) a decrease in total expenditure
(C) an increase in productivity
(D) an increase in the average wage level
16) What must result if a farm expands its output in the short run?
(A) Average fixed costs will fall
(B) Average total costs will fall
(C) Average variable costs will fall
(D) Total costs will fall
17) What describes a regressive tax?
(A) It is paid by a higher proportion of high income earners
(B) It is paid by a higher proportion of low income earners
(C) It takes a higher proportion from high incomes
(D) It takes a higher proportion from low incomes
18) Which of the following must always balance?
(A) the balance of visible trade
(B) the balance of invisible trade
(C) the balance on the current account
(D) the balance of payments
19) What is most likely to happen if Taiwan builds a factory, which becomes profitable in the Czech Republic?
(A) Taiwan's invisible earnings will increase
(B) Taiwan's visible imports will decrease
(C) The Czech invisible trade balance will improve
(D) The Czech terms of trade will improve
20) Which of the following is the most obvious sign of inflation?
(A) an increase in imports
(B) a rise in the national debt
(C) a rise in the rate of interest
(D) a rise in retail prices