Question # 1

The gift exchange motive suggests that

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Workers value benefits like health insurance more than job security

Workers prefer a nice work environment even if they must accept lower wages.

Workers who feel well treated will work harder and more efficiently

Workers will shirk if they are paid a low wage

A beneficial supply shock would cause.

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A movement up the short run Phillips

a movement down the short run Phillips curve

The short run Phillips curve to shift upward and to the rights

The short run Phillips curve to shift down ward and to the left

A rise in the exchange rate value of the rupee will most likely cause.

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A dollar to be worth less in learns of other currencies.

Imports to decrease

Exports to increase

The balance of payments curve to shift to the left

When all markets in the economy are simultaneously in equilibrium we say.

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Markets are complete

Markets are perfect

There is disequilibrium

There is general equilibrium.

When the economy goes into are cession there's an increase in.

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Frictional unemployment

structural unemployment

Cyclical unemployment

Voluntary unemployment

Appreciation of the U.S. dollar results in.

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U.S. tourists traveling abroad being worse off

U.S. imports increasing.

Foreign currency buying more U.S. goods and services.

No change iin foreign pucchases or sales.

An efficient economy is an economy

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In which output is steady or growing and there is low inflation

That produces what consumers demand and does so at the least possible cost.

that distributes output equally among all consumers

In which there is a fair distribution of wealth.

Economic planning by enteral government agencies is primarily associated with

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command economies

Market economies

Laissez faire economies

Market faire economies

Full- employment output is the level of output that firms in the economy supply when

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Taxes are zero

Wages and prices have fully adjusted

The unemployment rate in zero

All capital is fully utilized

To ensure that the fundamental identity of national income accounting holds changes in inventories are.

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Ignored

Counted as consumption

Treated as part of saving

Treated as part of expenditure

The monetary base in composed of.

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Gold and silver

Currency only

Currency and reserves

Currency and checkable deposits

In the long run a reduction in labor supply would cause output to _______ and the aggregate price level to.

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fall; rise

fall ; fall

rise ; fall

rise; rise

An increase in the marginal propensity to import.

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Has the some effect upon the multipliers as an increase in the MPC

Has no effect upon the multipliers

Increases the value of the multipliers

Decreases the value of the multipllers

An increase in autonomous net exports

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Shifts IS rightward by k, ox

shifts IS left eard by k, AX

Increase the slope of IS

Decreases the slope of IS

In which of the following situations will an increase in the money supply have no effect upon equilibrium income.

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LM is steeply sloped and IS is relatively flat

LM is vertical and IS si steeply sloped

LM is steeply sloped and IS is vertical

LM is relatively flat as is IS

A rise in the price of bond causes the yield of the bond to.

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Rise

Fall

Remain unchanged

Rise uf ut's a short term bond, fall if it's a long term bond

Company X sells Rs.75 million dollars of 9.5% first mortgage bonds at par The company's marginal tax rate to 30% The after tax cost of debt is.

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2.85%

3.175

6.68%

7.55

In the long run an increase in consumer spending would cause output to ________ and the price level to.___________

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rise;rise

rise; stay; constant

stay constant ; stay constant

Stay constant ; rise

Keynes considered subjective and objective factors.

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Determinants of investment

Determinants of business will ingress to supply

Unimportant determinants of consumption.

Important determinants of consumption.

To avoid double counting when the GNP is estimated, economists

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Price all goods and services bought and sold in all markets

Use the GNP deflator

Price only intermediate goods

Calculate value added at each stage of production.

The MPS = 0.4 and government spending increases by 20 billion. The LM curve

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Shifts to the right by 20 billion

Shifts to the right by 50 billion

Does not shift

shifts to the left by 30 billion

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