Question # 1

"Economics is what economists do " It has been supported by.

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Richard jones

Comte

Gunnar Myrdal

All of the above

When total utility becomes maximum then marginal utility will be.

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Minimum

Average

Zero

Negative

A technological improvement will

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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.

What is the level of savings for disposable income = Rs.5,000 if dissaving's of 50 occur at a disposable income of Rs.0 and a marginal propensity to save equal to 0.257

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Rs. 1.25

Rs.1.125

Rs.1,200

Rs.1,100

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

A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the

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Real interest rate

Production function

Productivity relation

Marginal product

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

Ahmed regression model yields a Durbin Watson d statistic whose value is 0.002. The results indicate.

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Positive serial correlation

the presence of multicollinearity

No serial correlation

Negative serial correlation

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

Which of the following is not a primary cause of business cycle fluctuations according to real business cycle theory.

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A change in the production function

A change in the size of the labor force

A change in the money supply

A change in the real quantity of government purchases

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.

If the foreign interest rate is 12% while the domestic interest rate in 95 then the forward premium will be.

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1.3 %

12%

9%

3%

Which of the following is the most liquid.

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A savings account

A 6 months CD

A home

Water

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

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Ignored

Counted as consumption

Treated as part of saving

Treated as part of expenditure

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

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Restrictions on bank loans

Increased taxes

Contractionary fiscal policy

Expansionary fiscal policy

Industries that are extremely sensitive to the business cycle are the.

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Durable goods and service sectors

Nondurable goods and service sectors.

Capital goods and nondurable goods sectors.

Capital goods and durable goods sectors.

The term household production refers to

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Output produced by forcing children to work

Output produced by workers who are telecommuting

Services provided directly to households such as lawn mowing by landscape companies.

Output produced at home

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

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Rightward by Rs. 10

Leftwards by Rs. 10

Rightward by Ke (Rs.10)

Leftward y Ke (Rs.10)

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

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

The multiplier which specifically refers to an equal increase in government spending and taxes, giving rise to that same equal increase in national income is called.

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the Keynesian multiplier

The balanced budget multiplier

the deficit multiplier

None of the above

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