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The Repo Rate is defined as the rate at which:
ACommercial banks lend money to retail customers
BThe Central Bank borrows funds from commercial banks
CThe Central Bank lends short-term money to commercial banks against collateral
DGovernments borrow money from foreign international funds
High inflation caused by persistent cost increases in raw materials, energy, or wages is termed:
ACost-Push Inflation
BDemand-Pull Inflation
CStructural Inflation
DHyperinflation
Joseph Schumpeter attributed long-term economic development and business cycles primarily to:
AInnovations and entrepreneurial activity
BDiscoveries of precious metals
CPopulation growth rates
DGovernment budget deficits
An inflationary gap occurs in the short run when actual aggregate output is:
AGreater than potential output (full-employment output)
BLess than potential output
CEqual to potential output
DFalling faster than consumer prices
The ‘Physiocrats’ economic school of thought in 18th-century France believed that wealth originated exclusively from:
AForeign trade and precious metals bullion
BAgriculture and land
CManufacturing industries
DBanking and credit expansion
The Real Interest Rate is calculated using the Fisher Equation as:
ANominal Interest Rate - Inflation Rate
BNominal Interest Rate + Inflation Rate
CInflation Rate / Nominal Interest Rate
DNominal Interest Rate × Real GDP
Mercantilism as an economic doctrine advocated for:
AAccumulation of gold and silver through trade surpluses and protectionism
BFree trade and zero import duties
CState abolition of private property
DUnrestricted international capital flows
Which economic concept measures the velocity of money circulation (V)?
AThe percentage of cash held in central bank reserves
BThe growth rate of national savings
CThe average number of times a unit of currency is spent on final goods per year
DThe foreign exchange rate turnover
In the classical macroeconomic framework, aggregate supply curve in the long run is:
AUpward sloping
BVertically straight at full-employment output
CDownward sloping
DHorizontally flat
According to the Pigou Effect (real balance effect), a fall in general price levels leads to:
AA decrease in real wealth and lower consumption
BAn increase in the real value of wealth, raising aggregate demand
CA drop in total output due to wage cuts
DAn increase in interest rates by central banks