Question # 1

If equilibrium national income is less than the full employment the gap can be closed by.

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Raising taxes

Decreasing government expenditures

Raising taxes and decreasing government expenditures.

Increasing government expenditures.

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

Given fixed change rate assume Pakistan initiates expansionary monetary and fiscal polices to combat recession these policies will also.

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Increase both imports and exports

Increase exports and reduce import

Reduce a balance of payments surplus

Reduce a balance of payment deficit

Which of the following is an example of a productivity shock.

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The introduction of new management techniques

A change in taxes on corporate profits

A change in the level of government transferors

An increase in the money supply

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

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

Utility means.

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Power to satisfy a want

Usefulness

Willingness of a person

Hamfulness

Disinflationary demand management policies.

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Achieve a lower rate of inflation without causing a decreases in output.

Reduce output but have no initial effect on the inflation rate

Require an increase in government spending.

Require a reduction in the growth rate of the nominal money supply.

From a Keynesian perspective business investment will de cline as a result of.

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A fall in the interest rate

A decrease in business taxes

A decline in business expectations

Acceleration of business depreciation

Which of the following changes shifts the SRAS curve down.

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An increase in the labor force

An increase in the money supply

A decrease in government purchases

A decrease in firms costs

Whose opinions have revolutionized the scope of macro economics.

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Adam Smith

J.B. Say

J.M. Keynes

All of the above

The major source of revenue for the government is.

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the collection of property taxes

The collection of the corporates income tax

The collection of excise taxes on gasoline cigarettes and tires

The collection of import and export duties in the conduct of foreign trade

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

If government tax function is T = 80 + .6 Y and the marginal propensity to consume is a constant 8 and increase in GNP of Rs.50 would cause consumption to.

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Increase by Rs.16

Decrease by Rs.16

Increase by Rs.40

Decrease by Rs.30

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

None of these

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

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

The measured of GDP includes

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Non market goods such as home making and child rearing

The benefits of clean air and water

Estimated values of activity in the underground economy

Purchases and sales of goods produced in previous periods

If investors expectations concerning the future are positive and thus increase investment at every interest rate the.

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IS curve would shift up

IS curve would shift down

LM curve would shift down

IS and LM curves will not shift

Which of the following macro economic variables doesn't vary much ove the seasons.

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The nominal money stock

The unemployment rate

The real wage

Average labor productivity

What is the average money balance according to the square root rute if income is Rs.1500, each transaction cost is Rs.4, and the opportunity cost of holding money is.2%

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387

50

175

203

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