You're probably not as great as you think you are.

Recently, I have been reading about Economics. While I think that as a subject (for the most part) it is banal, pointless and dry, it certainly has some validity in the modern world and gives an insight into the workings of Humans as a collective rather than on an individual basis.

Here are five economic problems. Answers on a postcard.

1 - In 2009, the country of Mattopia imports equaled its exports. Mattopia's GDP was £500 million, its consumer expenditure was £385 million, and its investment was £14 million. Mattopia's government purchases were;

a) £500 million
b) £899 million
c) £101 million
d) zero

2 - If aggregate demand grows only slightly faster than potential GDP, then the economy will;

a) experience economic growth with low inflation
b) be at a business-cycle peak
c) experience economic growth with high inflation
d) experience recession

3 - (Expenditure Multipliers) The multiplier is 1.5. A decrease in investment of £5 billion will shift the aggregate demand curve __________ by _______________.

a) leftward; less than £5 billion
b) leftward; £7.5 billion
c) rightward; less than £5 billion
d) leftward; £5 billion

4 - The economy is experiencing high inflation and high unemployment. What combination of fiscal and monetary policies will decrease both inflation and unemployment?

a) feedback rule with an increase in money growth and a decrease in taxes
b) fixed rule with no money growth and no change in taxes or government purchases
c) an increase in money wage rates and constant money growth
d) fixed rule with constant money growth

5 - The real interest rate will increase if all of the following events occur, other things remaining the same, except;

a) new technology increases the world investment demand
b) the world saving supply around the world decreases
c) the supply of private saving around the world increases
d) the world investment demand increases