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Practice Questions

Economics — 5 questions with detailed solutions

Q1

If the price elasticity of demand for a product is -0.5, a 10% increase in price will most likely result in:

Q2

During the expansion phase of a business cycle, which of the following is most likely to occur?

Q3

According to the Fisher effect, if the real interest rate is 3% and expected inflation is 5%, the nominal interest rate is approximately:

Q4

A country with a current account deficit must have:

Q5

An expansionary monetary policy by a central bank will most likely lead to: