Question # 1

The equilibrium level of Y and I derived from the LM and IS equations above is.

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Y = 130 and I = 10%

Y = 200 and I = 30%

Y = 180 and I = 7%

Y = 250 and I = 2%

If an individual has a money income M of Rs. 999 , the price of X is rs.7.00 per unit and ithe price of Y is Rs. 300 per unit find the equation for the budget lines.

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Y = 333 - (7/3) x

Y = 142 - (7/3) x

Y = 142- (3/7) x

Y = 323 - (7/3) x

Which of the following macro economics variables is a cyclical.

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Real interest rates

Unemployment

Money supply

Consumption

At point of satiety marginal utilityis.

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Positive

Negative

Maximum

Zero

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

GDP difference between GNP because.

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GDP = GNP - net factor payments from abroad

GNP = GDP -net factor payments from abroad

GDP = GNP -capital consumption allowances

GNP = GDP -capital consumption allowances.

Which of the following assets is most liquid.

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Shares of stock in IBM

Land

Gold

Currency

After a temporary beneficial supply shock hits the economy general equilibrium is restored by

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A shift down and to the left of the IS curve

A shift to the left of the FE line

A shift up and to the left to the LM curve

A shift down and to the right of the LM curve

An economics variable that moves in the same direction as aggregate economic activity is called.

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Countercyclical

Procyclical

A cyclical

A leading variable

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.

In a mixed economy the economic decisions of what to produce how to produce, and who will receive products are made by

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The government

Consumers and firms

Banks and stock markets

Firms, consumers, and government.

In a private sector model

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Household saving is a leakage from the circular flow

Investment is a spending injection

All of the above

None of the above

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

Equilibrium occurs in a two sector model when

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Saving equals investment.

Consumption plys investment equals the value of putput

Planned saving equals planned investment.

Aggregate spending equals the revenues of the business sector

Banks can create money

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Only by illegally printing additional dollar bills

By paying interest to their depositors

By making loans that result in additional deposits

By offering financial services, such as stick market brokerage

If the sampi is accepted as coming from a universe with a mean of Rs.500 or greater when if doesn't.

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A Type II error is made

A type I error is mad

The alternative hypothesis is correct.

A and C are correct

In the Keynesian model in the long run a decrease in the money supply will cause ___ in the interest rate and _____ in the price level.

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An increase ; an increase

A decrease ; a decrees

No change ; an increase

No change ; a decrease

Ineven A occurs the payoff will be Rs.5,670.00 . the probability of event A occurring is .87 What is the expected payoff of event A.

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Rs.5,670.00 9d)

Rs.4,832.10

Rs. 4,932.90

Rs.5000.00

The through of a business cycle occurs when ______ hits its lowest point.

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Inflation

The money supply

Aggregate economic activity

The unemployment rate

Which of the following changes shifts the AD curve up and to the right.

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A rise in the nominal money supply

An increase in income taxes

An increase in the risk on nonmonetary assets

A decreasing the future marginal productivity of capital.

If the reserve deposit ratio is 0.25 and the ratio of currency in circulation to deposits is 0.3, the potential money multiplier will have a value of.

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2.36

0.42

1.20

0.96

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