Question # 1

The government budget surplus equals

Choose an answer

Government purchases plus transfers

Net government receipts minus government purchases

Government purchases minus net receipts

Government purchases minus transfers.

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.

Choose an answer

2.85%

3.175

6.68%

7.55

Monetary expansion can still be effective in getting out of liquidity trap if it's combined with.

Choose an answer

Restrictions on bank loans

Increased taxes

Contractionary fiscal policy

Expansionary fiscal policy

A commercial bank has a required reserve ratio of 20% and desires to hold 5% in excess reserves. the bank receives a Rs. 10,000 deposit. It it abides by the required reserve ration and its desire to hold excess reserves the bank can make a loan of a most.

Choose an answer

Rs.7500

Rs.2500

Rs.5000

Rs.30,000

An economy is in inflationary equilibrium A sustained increase in government appending shifts.

Choose an answer

DAD rightward for one period

DAD and DAS right ward permanently

DAD right ward and a new equilibrium

DAD right ward and a new equilibrium.

When the supply of money increases.

Choose an answer

The LM curve will shift in

The LM curve will shit out

The demand for money will decrease

The demand for money will increase

The three main components of the aggregate demand aggregate supply model include.

Choose an answer

AD, SRAS, LM

SRAS, LRAS, IS

AD, IS, LM

AD, SRAS, LRAS

The natural rate of unemployed is generally thought of as the.

Choose an answer

Ratio of the frictional unemployment rate to the cyclical unemployment rate

sum of structural unemployment and cyclical unemployment

sum of frictional unemployment and cyclical unemployment

sum of frictional unemployment and structural unemployment.

"Economics is a science " the basis of this statement is.

Choose an answer

Relation between causes and effect

Use of deductive method and inductive method for the formations of laws

experiments

All of the above

When the Central Bank initiates actions which will lead to an increase in the supply of money IS -LM models tell us to expect that.

Choose an answer

The interest rate will rise

The interest rate will decline

The price level will not change

Investment will decline

A technological improvement will

Choose an answer

Increases the desired capital stock

Decrease the desired capital stock

Have no effect on the desired capital stock

Have the same effect on the desired capital stock as an increase in corporate taxes.

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

Choose an answer

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

A Rs.10 increase in autonomous investment spending shifts is.

Choose an answer

Rightward by Rs. 10

Leftwards by Rs. 10

Rightward by Ke (Rs.10)

Leftward y Ke (Rs.10)

Appreciation of the U.S. dollar results in.

Choose an answer

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

Choose an answer

Countercyclical

Procyclical

A cyclical

A leading variable

The Laffer curve depicts

Choose an answer

A trade off between tax rates and government receipts

Price levels and real income

government deficits and unemployment

Tax rates and infixation

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

Choose an answer

Ignored

Counted as consumption

Treated as part of saving

Treated as part of expenditure

An increase in the expected future marginal product of capital would cause the IS curve to.

Choose an answer

Shift up and to the right

Shift down and to the left

Remain unchanged if firms face borrowing constraints otherwise shift down and to the left

Remain changed

Which of the following factors will cause the demand curve for labor to shift to the right.

Choose an answer

The demand for the product produced by labor declines.

The prices of substitute imputes falls

The productivity of labor increases

None of the above

In the Keynesian model short run equilibrium occurs where

Choose an answer

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

Suppose nominal GNP is Rs.500 in year 1, the base year If the GNP deflator doubles by year 6 while real output has increased 40% nominal output in year 6 equals.

Choose an answer

Rs.2000

Rs.1400

Rs.1000

Rs.750

More Classes

Other Links

PPSC Economics Chapter 3 Macro Economics MCQs With Answers

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer