What do you know about economics?
Test yourself...

1). Bad weather conditions have destroyed half of global coffee production. You expect the price of coffee in the coming months to

   a) remain constant
   b) go up
   c) go down

2). You own a firm that produces ketchup. The cost of tomatoes you use as your main raw material doubles. Everything else, including the price at which you sell your ketchup remains the same. You expect your profits to

   a) increase
   b) decrease
   c) remain constant

3). A company is expecting to receive benefits amounting to $1.5 mln (present value) from a project it is going to implement and whose cost is $0.8 mln. After the investment of $0.8 mln is made, it becomes evident that another $1.2 mln investment is required in order to reap the final benefits. Should the investment be made and the project completed?

   a) Yes, it should.
   b) No, it should not.

4). The retail price index is used to

   a) construct price lists
   b) compare shop prices
   c) measure changes in the cost of living

5). As a consequence of an economic downturn you expect the public budget deficit

   a) to increase
   b) to decrease
   c) public budget deficit is not influenced by economic downturns or upturns

6). The government has just announced an increase of the minimum wage above the actual market wage. You expect

   a) higher unemployment
   b) lower unemployment
   c) higher wages and no effect on unemployment

7). In the presence of unexpected inflation exceeding the target set by the Central Bank, you expect the monetary authorities to

   a) buy treasury bonds
   b) raise interest rates
   c) lower interest rates

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