Question # 1

According to Keynesians the primary source of business cycle fluctuation is.

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Aggregate demand shocks

Productivity shocks

Oil price shocks

Consumer confidence shocks

Given the IS equation Y = Ke a - Ke Bn the IS slope decreases when

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Ke increase and b increases

Ke decreases and b increases

Ke increases and b decreases

Ke decreas4es and b decreases

An increase in the real wage rate will cause.

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The labor demand curve to shift to the right

The labor demand curve to shift to the left

The quantity of labor demanded to rise

A movement along the labor demand curve

The origin of the idea of a trae off between inflation and unemployment was a 1958 article by

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A.W Philips

Edmund phelps

Milton Friedman

Robert Gordon

The Keynesian theory is consistent with the business cycle fact that inflation is

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Procyclical and leading

Procyclical and lagging

Countercyclical and leading

All of these

Suppose there is full employment and a neoclassical aggregate supply schedule A 105 increases in the nominal money supply.

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Has no effect upon the price level

Increase the rate of interest

Increase the nominal wage 10%

Increase the real money supply 10%

Which of the following is the second law of gossen.

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Law of equal marginal utility.

Law of equi product

Theory of indifference curve

Law of diminishing marginal utility.

The short run aggregate supply curve the absence of misperceptions.

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Is vertical

Slopes upward

Is horizontal

Slopes downward

Which of the following actions is an example of expansionary fiscal policy.

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A decrees in welfare payments

A purchase of government scantiest in the open market

A decrease in the Bank rate

A decrease in the corporate profits tax rates

A change in autonomous spending is represented by.

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A movement along a spending line

A shift of a spending line

A change in a behavioral coefficient.

None of these

Which market adjusts the quickest in response to shocks to the economy.

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The asset market

The labor market

The goods market

In the macro economy

Ahmed regression model yields a Durbin Watson d statistic whose value is 0.002. The results indicate.

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Positive serial correlation

the presence of multicollinearity

No serial correlation

Negative serial correlation

Economic planning by enteral government agencies is primarily associated with

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command economies

Market economies

Laissez faire economies

Market faire economies

In market economics the incentive that draws entrepreneurs into industry is.

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Government bonuses for meeting production quotas

Profit

Government assumption of the risk of failure

Government assistance with making output and pricing decisions

The expected real interest rate minus expected inflation rate.

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Nominal interest rate minus inflation rate

Nominal interest rate minus expected inflation rate.

Expected nominal interest rate minus inflation rate

Nominal interest rate plus expected inflation rate.

An expansionary supply side shock results in.

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An increased real national income

The aggregate supply curve shifting to the left

The aggregate demand curve shifting to the right

The aggregate demand curve shifting to the left

A temporary decrease in government purchases would cause.

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A rightward shift in the saving curve and a leftward shift in the investment curve

A rightward shift in the saving curve and a rightwards shift in the investment curve.

A right ward shift in the saving curve but no shift in the investment curve

No shift in the saving curve but a left ward shift in the investment curve.

Classical economics think general equilibrium is attained relatively quickly because.

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The real interest rate adjusts quickly

The level of output adjusts quickly.

The real wage rate adjusts quickly

The price level adjusts quickly.

When total utility becomes maximum then marginal utility will be.

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Minimum

Average

Zero

Negative

Suppose there is full employment and positively sloped aggregate supply schedule A decrees in taxes increases.

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The price level and real output

the prie level but has no effect on real output

Real output but has no effect on the price level

The nominal and real wage

An increase in the expected real interest rate tends to.

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Raise desired saving only

Raise desired investment only

Raise both desired savings and desired investment

Raise desired savings, but lower desired investment.

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