Question # 1

The relation ship between the exchange rate and the prices of tradable goods is known as the.

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Purchasing power parity theory

Asset markets theory

Monetary theory

Balance of payments theory

In a market system, sellers act in ___________ interest, but thsi leads to behaviors in __________ interest.

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Self, self

Self, society's

Society's' , society's

society's, self

Capitalism refers to

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the use of markets

Government ownership fo capital goods

Private ownership of capital goods

Private ownership of homes and cars

In a pure market economy which of the following is a function of the price.

i - provide information to sellers and buyers

ii- Provide incentives to sellers and buyers

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I only

ii Only

both i and ii

Neither i nor ii

Direct investment and security purchase are classified as.

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Capital account transactions

Current account transactions

Unilateral transfer transactions

Merchandise trade transactions

According to the crowding out effect, a there is a government deficit, the real interest rate will.__________ and investment will_________

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rise ; rise

fall ; rise

rise ; fall

fall ; fall

A firm can fund an investment from its own sources, the opportunity cost of its investment is

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Less than zero

Zero

More than zero

Neither

If there is a price celling, there will be.

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Shortages

surpluses

Equilibrium

None of these

In oligopoly market seller are.

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Few

Four

Some

A large number

The investment demand curve shifts right ward if

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The real interest rate falls

Savers increase their thriftiness

The expected profit rate increases.

The economy moves into a recession

"Treating an individual as typical of a group.

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Pure discrimination

statistical discrimination

Human capital

Specific skills

Of the following which one is a characteristic of monopolistic competition.

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Standardized product

Comparatively easy only

Little non price competition

None of these

During the 1980's empirical evidence indicates that.

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Poverty re emerged in Pakistan

Good growth brought down poverty in Pakistan.

Poverty situation showed no change

None of the above

In a "Lorenz curve diagram absolute equality in income distribution would appear as.

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A curved line well bowed out from the diagonal

A curved line close to the diagonal

A right angled line

A diagonal line

Which of the following is automatic stabilizer.

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Unemployment benefits

Spending on education

Defense spending

Net interest

MRSxy being 6 means

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Consumer is willing to give up 6 units of x for one of y

Preference for y is 6 times that of x

Both of the above

None of these

Which of the following is most likely to benefit a debtor.

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Un anticipated deflation

Anticipated deflation

Unanticipated inflation

anticipated inflation

Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costa are called

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deferential actions

Cash transactions,

Arbitrage

Forward transactions

The largest trading partner of Pakistan is

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Italy

US

USA

None of these

A purely monetary explanation of the business cycle is proposed by

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Hawtrey

Schumpeter

Hansen

None of these

Accordant the wealth effect , an increase i the price level _______ real wealth and ____ consumption expenditure.

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Increase, Increases.

Increases ; decreases

decreases ; increases

decreases ; decreases

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