Question # 1

"An Enquiry into the Nature and causes of wealth of Nations" is thebook of economist.

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Adam smith

Marshall

Robbins

None of above

The equation for the LM curve is.

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Y = 100 -50 i

Y = 50 + 50 i

Y = 50 - 80 i

Y = 80 + 50 i

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the long run aggregate supply curve.

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slopes upward

Sloped downward

Is vertical

Is horizontal

Money must fulfill all of the following functions except.

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Be a medium of exchange

Be a store of value

Be generally accepted as a means of purchasing commodities

The above are all functions of money

The fact that the long run Phillips curve is vertical implies that

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Monetary policy can't effect unemployment

Money is neutral in the long run

There is a natural rate of inflation

Money can't affect inflation in the long run

Which of the following is a NOT component of M-2.

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Small time deposited

Money market mutual funds

Stocks

Checkable deposits

A variable whose value is determined witching an economic theory or model is.

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Exogenous

Independent

Deterministic

Endogenous

An invention that speeds up the internet is an example of.

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An income effect

An increase in labor

A substitution effect

A supply shock

Suppose your company is in equilibrium with its capital stock at the desired level A permanent decline in the expected real interest rate now has what effect on your desired capital stock

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Raises it because the future marginal productivity of capital is higher

Lowers it because the future marginal productivity of capital is lower

Raises it because the user cost of capital is now lower

Lowers it because the user cost of capital is now higher

Which one of the following would cause demand pull inflation.

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Increases iin production costs

Wage gains in proportion productivity gains

An increase in aggregate demand with shortages of sup ply

Monoposonistic labor markets

Which of the following is not a category of consumption spending in the national income accounts.

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Consumer durables

Non durable goods

Services

Housing Purchases

A decline expected future output would cause the IS curve to.

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Shift up and to the right

Shift down and to the left

Remain unchanged

shift up and to the right only if people face borrowing constratints.

In a model in which there is no government new investment capital replacement or international trade the market value of final output equals.

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Aggregate consumption

The sum of the receipts of economic resources

The sum of wages rent interest and profit

All of the above

A group of modern economists who believe that price and wage rigidities do not provide the only rationale for macroeconomic policy activism are called.

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New Keynesians

Keynesians

Monetarists

The Classical shool

Which of the following macro economic variables is the most seasonally pro cyclical.

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Expenditure on services

The unemployment rate

Expenditure on durable goods

The real wage

Under law of demand.

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Price of commodity is an independent variable

Quantity demanded is a dependent variable

Reciprocal relationship is found between price and quantity demandded

All of the above

The idea that the natural rate of unemployment rises when the acual rate of unemployment rise is known s.

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Stabilization

Insider outsider theory

Hysteresis

an efficiency wage model

Which of the following is the most liquid.

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A savings account

A 6 months CD

A home

Water

A disadvantage of chain weighting is that

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Past inflation rates change whenever the base year changes.

Past growth rates of real GDP change whenever the base year changes.

It causes output growth to slow

The components of real GDP don't sum to real GDP

The impact of contractionary fiscal policy, according to new classical theory is that.

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Real interest rates do not change

Aggregate demand increase

Current real output substantially decreases

The price level substantially increases.

The negative relation ship between unemployment and inflation is know as the

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Aggregate supply curve

Aggregate demand curve

Philipps curve

Efficiency wage line

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