PPSC Economics Chapter 3 Macro Economics With Answers

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PPSC Economics Chapter 3 Macro Economics

Sr. # Questions Answers Choice
1 Fractional unemployment arises when Unskilled or low skilled workers find it difficult to obtain desirable long term jobs Labor must be reallocated from industries that are shrinking to areas that are growing. Workers must search for suitable jobs and firms must search for suitable workers. Output and employment are below full employment levels
2 Full- employment output is the level of output that firms in the economy supply when Taxes are zero Wages and prices have fully adjusted The unemployment rate in zero All capital is fully utilized
3 The equilibrium level of employment achieved after the complete adjustment of wages and prices, is known as the. Zero unemployment level of employment Natural state Invisible handshake Full employment level of employment
4 The aggregate supply of labor is the Total amount of time a person works over his or her lifetime Total amount of time a person spend in the labor force over his or her life time Unemployment rate Sum of the labor supplied by everyone in the economy
5 Which of the following events would lead to an increase in the marginal product lf labor for every equantity labor. An increase in the real wage A decrease in the real wage A favorable supply shock such as a fall in the price of oil an adverse supply shock such as a reduced supply of raw materials.
6 Firms hire labor at the point where the Nominal wage rate equals the marginal product of labor Real wage rate equals the marginal revenue product of capital Nominal wage rate equals the marginal revenue product of labor Real wage rate equals the marginal revenue product of capital
7 What tow factors should you equate in deciding how many workers to employ. The marginal product of labor and the marginal product of capital The marginal product of labor and the real wage rate The marginal product of labor and the real interest rate The marginal product of capital and the real wage rate
8 An increase in the number of workers hired by a firm could result from a decrease in the marginal product of labor a decrease in the marginal revenue product of labor An increase in the real wage A decrease in the real wage
9 An increase in the real wage rate will cause. 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
10 The fac that the production function relating output to labor becomes flatter as wemove from left to right means that. 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
11 The two main characteristics of the production function are. It slopes downward from left to right and the slope become flatter as teh input increases It slopes upward from left to the right the slope becomes steeper as the input increase It slopes upward from left to right unput increases It slopes downward from left to right and the slope becomes steeper ath the input increase
12 An increase in the real wage rate will cause 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
13 An invention that speeds up the internet is an example of. An income effect An increase in labor A substitution effect A supply shock
14 The fact that the production function relating output to labor becomes flatter as we move from left to right means that. 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
15 The marginal product of labor Is measured by the slope of the production function relating capital of employment Is larger when the labor supply is relatively larger Is smaller when the labor supply is relatively smaller Decreases as the number of workers already employed increases
16 The fact that the Production function relating output to capital becomes flatter as we move from left to right means that. 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
17 A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the Real interest rate Production function Productivity relation Marginal product
18 The expected real interest rate minus expected inflation rate. Nominal interest rate minus inflation rate Nominal interest rate minus expected inflation rate. Expected nominal interest rate minus inflation rate Nominal interest rate plus expected inflation rate.
19 The normal interest rate minus the inflation rate is the Depreciation rate Discount rate Real interest rate Forward rate
20 A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the. Real interest rate Productivity relation Production function Marginal product
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