Lesson 2.6.4

2.6.4 Conflicts and trade-offs between objectives Quiz: Pearson Edexcel Economics, Unit 2

20 questions

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Lesson 2.6.4, Conflicts and trade-offs between objectives: 20 multiple choice questions for the Pearson Edexcel Economics (9EC0), Unit 2: Theme 2: The UK economy – performance and policies, written with Revision Ninja.

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The 20 questions

  1. Which two macroeconomic objectives conflict along the short-run Phillips curve?

    • Growth and inequality
    • Inflation and debt
    • Growth and exports
    • Inflation and unemployment

  2. What relationship exists between inflation and unemployment along a short-run Phillips curve?

    • Direct
    • Proportional
    • Inverse
    • Zero

  3. Which macroeconomic objective commonly conflicts with rapid economic growth regarding the environment?

    • Environmental sustainability
    • Balance of payments
    • Price stability
    • Full employment

  4. What occurs when financial outflows for imported goods and services exceed export inflows?

    • Capital account surplus
    • Current account deficit
    • Budget deficit
    • Current account surplus

  5. Which macroeconomic issue is directly measured using the Gini coefficient?

    • Unemployment rate
    • Inflation rate
    • Economic growth
    • Income inequality

  6. Using expansionary demand management to lower unemployment below its natural rate causes which outcome?

    • Higher inflation
    • Higher deflation
    • Balanced trade
    • Lower inflation

  7. Raising interest rates to curb inflation is most likely to cause which trade-off?

    • Slower economic growth
    • Higher inflation
    • Increased exports
    • Lower unemployment

  8. Which negative fiscal outcome is a trade-off of expansionary fiscal policy?

    • Higher unemployment
    • Lower inflation
    • Trade surplus
    • Larger budget deficit

  9. What is the shape of the long-run Phillips curve?

    • Upward sloping
    • Downward sloping
    • Horizontal
    • Vertical

  10. Successful supply-side policies cause the short-run Phillips curve to shift in which direction?

    • Rightwards
    • Upwards
    • Vertically
    • Leftwards

  11. Which macroeconomic policy conflict arises when attempting to reduce a balance of payments deficit via tariffs?

    • Increased tax revenue
    • Lower inflation rates
    • Retaliatory trade wars
    • Higher export demand

  12. Currency depreciation to reduce a current account deficit is most likely to cause what conflict?

    • Higher inflation
    • Economic recession
    • Budget deficit
    • Higher unemployment

  13. Increasing progressive taxation to reduce income inequality may conflict with which objective?

    • Price stability
    • Economic growth
    • Deficit reduction
    • Trade balance

  14. Fast economic growth is most likely to worsen which macroeconomic metric?

    • Inflation target
    • Budget surplus
    • Unemployment rate
    • Current account deficit

  15. What term describes the conflict when achieving one macroeconomic objective hinders another?

    • Market failure
    • Fiscal stance
    • Policy trade-off
    • Negative externality

  16. Which factor causes a shift in the short-run Phillips curve?

    • Exchange rates
    • Interest rates
    • Government spending
    • Inflation expectations

  17. In the long run, unemployment tends to return to which rate?

    • Target rate
    • Natural rate
    • Zero rate
    • Cyclical rate

  18. What economic term describes high inflation combined with stagnant economic growth?

    • Hyperinflation
    • Disinflation
    • Deflation
    • Stagflation

  19. The trade-off between unemployment and inflation occurs during which time period?

    • Secular run
    • Long run
    • Very long run
    • Short run

  20. Raising interest rates to lower inflation can worsen a trade deficit by attracting what?

    • Tariff revenues
    • Government grants
    • Foreign direct investment
    • Hot money inflows

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