CIE AS ECONOMICS MOST CHALLENGING QUESTIONS PAPER 1 /11 0 votes, 0 avg AS Most Challenging Questions 2023 These are collections of most difficult MCQ questions for the year. On average, 50% of the candidates answered these questions wrongly. 1 / 11 Which components are included as primary income in the current account of the balance of payments? A B C D 2 / 11 The table shows different combinations of rings and bracelets that can be produced by Luke and Zoe in the same time period.Which statement is not correct? Luke has a larger opportunity cost than Zoe for making bracelets. The opportunity cost of producing rings is constant for both Luke and Zoe. Zoe should specialise in making rings. Zoe’s opportunity cost for each bracelet is 2 rings. 3 / 11 A Kenyan banker who lives and works in India sends 15% of their wage back to Kenya every month.What would be the change in the current account components for either country? a fall in secondary income for India an increase in the balance of trade in services for Kenya an increase in the current account surplus for India an increase in primary income for Kenya 4 / 11 The diagram shows the production possibility curves (PPCs) for country X and country Y, the only two countries in the world. Both countries produce just two goods, M and N.Under which terms of trade will both country X and country Y benefit from trading with each other? 1M for 0.75N 1M for 0.8N 1M for 1N 1M for 2N 5 / 11 A new section of a road is provided toll-free by the government.What best describes this good? a demerit good a free good a private good a public good 6 / 11 A government aims to reduce unemployment through expansionary fiscal policy and borrows more from the commercial banks, increasing its borrowing requirement.What will be the result? a decrease in the budget deficit a decrease in the national debt an increase in the balance of payments deficit on the current account an increase in the interest rates 7 / 11 What is the most likely cause of the continuous increase in prices of famous paintings by now dead artists? the increasing technological ability to copy famous paintings perfectly the popular view that famous paintings are an appreciating asset the totally inelastic supply of famous paintings by dead artists the wish of governments to treat art galleries as merit goods 8 / 11 Which combination of initial equilibrium and supply-side policy is likely to be least effective when attempting to increase the real output of an economy? A B C D 9 / 11 Which combination is possible for an economy experiencing zero inflation? A B C D 10 / 11 Which term relates to a fall in the domestic real value of a currency? deflation depreciation appreciation inflation 11 / 11 General equilibrium in the macroeconomy is achieved when total injections are equal to total leakages.What is most likely to cause disequilibrium in the macroeconomy in the short run? an increase in government spending of $10bn and a decrease in exports of $10bn an increase in investment of $30bn and a decrease in household savings of $30bn an increase in spending on imports of $40bn and an increase in government spending of $40bn an increase in taxation of $40bn and a decrease in spending on imports of $40bn Your score isThe average score is 22% 0% Restart quiz 1 votes, 5 avg AS Most Challenging Questions 2022 These are collections of most difficult MCQ questions. On average, 50% of the candidates answered these questions wrongly. Take your time to understand the questions before answering. 1 / 12 1. Why might a country’s government impose a tax on fuel exports? A. to encourage domestic refineries to increase production B. to improve the country’s trade balance C. to reduce fuel prices for domestic consumers D. to reduce the government’s budget surplus 2 / 12 2. What is necessary for consumer surplus to be zero? A. Demand is perfectly elastic. B. Demand is perfectly inelastic. C. Supply is perfectly elastic. D. Supply is perfectly inelastic. 3 / 12 3. Why does an individual’s demand curve generally slope downwards to the right? A. The additional satisfaction an individual gets from consuming most goods decreases as consumption increases. B. The additional satisfaction an individual gets from consumption decreases as income rises. C. The individual has finite income which is used to attempt to satisfy many wants. D. For most goods the price charged by producers falls as the quantity purchased increases. 4 / 12 4. A country is suffering from severe deflation.What is most likely to prevent the deflation from worsening? A. increasing income tax to help reduce the government’s budget deficit B. increasing interest rates to encourage more saving C. increasing transfer payments to reduce inequality of income D. revaluing the currency to bring in more revenue from exports 5 / 12 5. The diagram shows the aggregate demand (AD) and aggregate supply (AS) for a country. The initial equilibrium is at point E.The sum of the price elasticities of demand for imports and exports for this country exceeds one.A devaluation of the country’s exchange rate will cause aggregate demand to change.What will be the new equilibrium? 6 / 12 6. A government imposes a maximum price on medical face masks, below the market equilibrium.What is the most likely effect of this? A. Some consumers will be unable to buy face masks at the maximum price. B. Firms will produce more masks to meet the excess demand at the maximum price. C. Poorer consumers will be able to obtain all the masks they need at the maximum price. D. The market will clear at the maximum price. 7 / 12 7. The diagram shows the demand curve for a normal product.Which two points indicate a move from a price inelastic point to a less price inelastic point? A. W to X B. X to W C. Y to Z D. Z to Y 8 / 12 8. The table gives different combinations of possible values for a country’s price elasticity of demand for exports and price elasticity of demand for its imports.Following the devaluation of the country’s currency, under which combination of elasticities would the country’s balance of payments on the current account worsen? A. A B. B C. C D. D 9 / 12 9. Which combination of tax changes is most likely to be regressive in a developed economy? A. A increasing the rate of wealth tax and raising the rate of sales tax (VAT) on luxury products B. B introducing a tax on owning property based on its sales value and increasing the rate of income tax C. C reducing the basic rate of income tax and increasing the duty on fuel D. D removing the tax-free allowance for income tax and extending sales tax (VAT) to include all food 10 / 12 10. Which combination of events is most likely to leave the demand curve for a normal good in the same position? A. a decrease in consumer incomes and an increase in the price of a substitute good B. a decrease in consumer incomes and an increase in the price of the good C. an increase in consumer incomes and an increase in the price of a substitute good D. an increase in consumer incomes and an increase in the price of the good 11 / 12 11. Why might a country’s government impose a tax on fuel exports? A. A to encourage domestic refineries to increase production B. B to improve the country’s trade balance C. C to reduce fuel prices for domestic consumers D. D to reduce the government’s budget surplus 12 / 12 12. The table shows a country’s total output and its average price in each of three years.What can be concluded about output? A. Nominal output and real output increased at the same rate. B. Nominal output rose at a faster rate than real output. C. Nominal output rose at an increasing rate. D. Real output rose at a constant rate. Your score isThe average score is 33% 0% Restart quiz Rate us to help improve the learning site. Anonymous feedback Thank you for keeping us motivated! Send feedback
