The government's budget position measures the difference between:

a) Export spending and import spending

b) Government spending and income

c) Government consumption and investment

d) Consumption and savings

72. Monetary policy does not include:

a) Changes to the interest rate

b) Changes to bank lending

c) Changes to bank borrowing

d) Changes to taxation rates

73. The size of the money multiplier will be greatest when the reserve ratio is:

a) 0.1

b) 0.2

c) 0.3

d) 0.4

74. If the economy grows the government's budget position will automatically:

a) improve due to increased spending

b) worsen

c) improve due to greater tax revenues

d) stay the same

75. Higher interest rates:

a) Encourage borrowing

b) Encourage savings

c) Increase injections into the economy

d) Reduce withdrawals into the economy

76. Demand side policies are most likely to lead to inflation when:

a) They reduce aggregate demand

b) Aggregate supply is perfectly elastic

c) Aggregate supply is price elastic

d) The economy is at full employment

77. Quantitative easing is:

a) Part of trade policy

b) Part of fiscal policy

c) Part of monetary policy

d) Part of employment policy

78. Supply side policies would NOT include:

a) Lowering tax to boost spending

b) Incentives to get people back to work

c) Incentives to get firms to invest

d) Training to give people the skills to accept work