Question # 1

If as result of householder wish to save more there is a change in equilibrium income and no change in equilibrium saving this as an example of.

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Market imperfection

The law of diminishing returns

The paradox of thriff

Market failure

The total multiplier for the economy will reflect.

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MPC and MPT

MPT and MPZ

MPC and MPZ

MPC, MPT and MPZ

If I keep some money available in case I see a bargain this is an example of.

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Asset demand for money

Transactions demand for money

Token demand for money

Precautionary demand for money

If a price increase of good A increases the quantity demanded of good B, then good B is a.

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substitute good

Complementary good

Bargain

Interior good

The prisoners Dilemma Game demonstrates that.

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Players are better off to act independently

Monopoly is better than competition

People will always cheat

Players are better off if they con operate

Real business cycle theorists argue that ___________ can explain short and long term fluctuations in output.

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Imperfect labour markets

Rational expectations

Intertemporal decisions of households firms and government.

Sun spot cycles

The abolition of income tax would probably ________ the number of workers in employment and____________ the equilibrium. rate of unemployment.

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increase ; decrease

increase ; increase

reduce ; increase

reduce ; reduce

If demand is _______ then price cuts will ________ spending.

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Inelastic, increase

Elastic, increase

Elastic, decreases

None of the above

Market some times fall to exist because of.

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Externalities

the free rider problem

Poor transport

a an b

If your income during one year is L 10,000 ad the following year it is L,12,000 then it has grown by

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20%

2%

12%

15%

A fixed exchange rate, plus perfect capital mobility _______ the scope for monetary policy.

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Enhances

Undermines

Encourages

Facilitates

import substitution is the replacement of ________ by domestic production under the protection of.

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exports, subsidies

Exports, patents

imports, high tariffs or import quotes

Imports, subsidies

Extremality's arise because there is a divergence between ____ and _

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Private costs, private benefits

Private costs, social costs of benefits

Social cost, social benefit

Insiders, outsiders

Skilled labour is relatively scarce because.

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There are too few teachers

Too few student places in higher education

It is costly to acquire human capital

Teachers salaries are too low

Firms are assumed to ____ costs and to _______ profit.

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Incur , desire

Pay ; make

Change ;earn

Minimize ; maximize

When investment is assumed to autonomous the slope of the AD schedule is determined by the.

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Marginal propensity to invest.

disposable income

Marginal propensity to consume

Average properisity to consume

If the central bank buys financial securities in the open market to increase the monetary base, this is an example of.

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Lender of last resort

Financial intermediation

Open market operations

Financial regulation.

Micro economics is conceded with

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The economy as a whole

The electronics industry

The study of individual economic behavior

the interactions within the entire economy

The value of an asset depends upon

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Its scrap value

Its depreciation

The present value of the failure stream of income it can earn.

the cost of loans

All of the following are types of imperfect competition except

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Monopolistic competition

Oligopoly

Monopoly

Unfair competition

During periods of rising inflation and rising interest rates we expect the demand for real cash to.

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rise

fall

not change

fluctuate

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