Question # 1

When an increase in government spending is matched by an equal decrease in government transfers, the income level will.

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Stay the same

Increase

Decrease

All of the above

Two independent variables are not independent of each other in a multiple regression problem The analyst most likely will be confronted with.

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The problem of autocorrelation

A type 1 error

The problem of multicollinear rarity.

a type II error

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

Over a two year period your income has increased 10% At the same time the consumer price index has increased 205 Your real purchasing power is.

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92% of the original value

50% of its original value

Not affected by the price change

109% of its original value

Real business cycle theorists think that most business cycle fluctuations are caused by shocks to.

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The production function

The size of the labor force

The real quantity of government purchases

The spending and saving decisions of consumers

The fraction of additional current income that a person consumes in the current period is known as the

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Consumption smoothing motive

Consumption deficit

Saving rate

marginal propensity to consume

Which of the following will not result in an increase in the level of income.

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An increase in autonomous spending

A decrease in autonomous taxes

An increase in autonomous transfers

an increased in net tax revenues

A decrease in the marginal propensity to import will lead to.

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An increase in GNP

Lower the multiplier

An increase in imports

A decrease in imports

The appropriate expenditure switching policy to correct a balance of payment surplus is.

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Currency revaluation

Currency devaluation

Expansionary monetary policy

Contractionary fiscal policy

If the quantity of money demands is less than the quantity of money supplied then the interest rate will.

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Either increases or decrease, depending on the amount of excess demand.

Increase

Decrease

not change

Which of the following macroeconomic variables is procyclical and lags the business cycle.

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Business fixed investment

Empolyment

Stock prices

Nominal interest rates

Find the change in revenue to the industry due to the taxs.

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Rs. 40 billion

Rs. 34 million

Rs.25 million

Rs.36 Million.

Which of the following procedures is included in the process that produces a value for disposable personal income

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subtracting excies and sales taxes

Subtracting nonbusiness interest

Subtracting transfer payment from government.

subtracting income taxes

In the Keynesian model short run equilibrium occurs where

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The IS and LM curves interest

The IS curve LM curve and FE lines intersect

the IS curve intersects the FE line

The LM curve intersects the FE line

The short run impact of unanticipated expansionary monetary policy is that.

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Real output decrease

Employment decreases

Real interest rates decrease

Profit margins decrease

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

When GNP is Rs.500 billion and consumption expenditures are Rs.300 billion.

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the MPC is 6

The MPS is 4

The Multiplier is 2.5

None of the above

If X becomes more expansive i relation to Y, what happens to the budget line in the X - Y space, with Y on the vertical axis.

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It shifts to the right

It shifts to the left

The slope becomes flatter

The slope becomes steeper

The short run aggregate supply curve the absence of misperceptions.

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Is vertical

Slopes upward

Is horizontal

Slopes downward

The fac that the production function relating output to labor becomes flatter as wemove from left to right means that.

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The marginal product of labor is positive

The marginal product of capital is positive

There is diminishing marginal productivity of labor

There is diminishing marginal productivity of capital

Economists use the phrase ceteris paribus to express the assumption.

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All else equal

Everything affects everything else.

Scarcity is a fact of life

There is no such thing as a free lunch

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