Bachelor of Social Science Economics Flashcards
7 cards from real BSocSc Bachelor of Social Science practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Bachelor of Social Science Economics flashcards as text
The Solow growth model attributes long-run per capita economic growth primarily to:
Answer: Technological progress
In the Solow model, capital accumulation faces diminishing returns, so only sustained technological progress (total factor productivity growth) drives long-run per capita income growth.
When a central bank conducts open market operations by purchasing government bonds, the immediate effect is:
Answer: Increase in money supply and lower interest rates
Buying bonds injects reserves into the banking system, expanding the money supply and pushing interest rates downward as loanable funds increase.
The Heckscher-Ohlin trade theory predicts that countries will export goods that intensively use their:
Answer: Most abundant factor of production
Heckscher-Ohlin theory holds that countries have a comparative advantage in goods that use their relatively abundant and thus cheaper factor of production intensively.
A public good is defined by which two properties?
Answer: Non-rivalrous and non-excludable
Public goods are non-rivalrous (one person's use does not reduce availability to others) and non-excludable (it is impossible to prevent non-payers from benefiting).
Which economic indicator measures the average price change experienced by urban consumers for a basket of goods and services?
Answer: Consumer Price Index (CPI)
The CPI tracks the cost of a fixed market basket purchased by typical urban consumers and is the most commonly cited measure of retail inflation.
In the context of economic development, the 'Dutch Disease' phenomenon describes how:
Answer: A booming export sector causes currency appreciation that hurts other traded sectors
A natural resource boom raises export revenues, appreciating the currency and making other exports like manufacturing uncompetitive — a pattern seen in the Netherlands after North Sea gas discovery.
According to the Efficient Market Hypothesis (EMH) in its strong form, which of the following is true?
Answer: All public and private information is already reflected in asset prices
The strong form of EMH asserts that asset prices fully reflect all information — public and private — making it impossible for anyone, even insiders, to consistently earn abnormal returns.