Question # 1

An expenditure reducing policy would consist of a decrease in

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The par value of a currency

Government expenditures

Import duties

Business or household taxes

The origin of the idea of a trae off between inflation and unemployment was a 1958 article by

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A.W Philips

Edmund phelps

Milton Friedman

Robert Gordon

Which of the following is a NOT component of M-2.

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Small time deposited

Money market mutual funds

Stocks

Checkable deposits

In the short run an increase in export sales would cause output to ______ and the price level to.

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Rise, rise

Rise,; stay; constant

Fall; rise

fall; stay; constant

When a person received an increase in wealth, what is likely to happen to consumption and saving.

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Consumption increase and saving increases.

Consumption increases and saving decreases

Consumption decreases and saving increases

Consumption decreases and saving decreases

The negative relation ship between unemployment and inflation is know as the

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Aggregate supply curve

Aggregate demand curve

Philipps curve

Efficiency wage line

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

Banks can create money

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Only by illegally printing additional dollar bills

By paying interest to their depositors

By making loans that result in additional deposits

By offering financial services, such as stick market brokerage

The fact that the long run Phillips curve is vertical implies that

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Monetary policy can't effect unemployment

Money is neutral in the long run

There is a natural rate of inflation

Money can't affect inflation in the long run

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

A decline expected future output would cause the IS curve to.

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Shift up and to the right

Shift down and to the left

Remain unchanged

shift up and to the right only if people face borrowing constratints.

When planned consumption equals Rs. 40 + 0.90 Yd and planned investment is Rs.50, the equilibrium level of income is.

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Rs.90

Rs.400

Rs.500

Rs.900

Find the change in revenue to the industry due to the taxs.

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Rs. 40 billion

Rs. 34 million

Rs.25 million

Rs.36 Million.

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

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AD, SRAS, LM

SRAS, LRAS, IS

AD, IS, LM

AD, SRAS, LRAS

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

When a British pound equals Rs. 1.60 and the French France equals Rs. 0.40 the ability to earn infinite profit if it were not the case, implies that the exchange rate would be.

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1 franc = 4 pounds

1 franc = 1 pound

5 franc = 1 pound

None of the above

The equilibrium level of employment achieved after the complete adjustment of wages and prices, is known as the.

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Zero unemployment level of employment

Natural state

Invisible handshake

Full employment level of employment

Which of the following results in an increase in the value of the dollar.

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Interest rates n the united states decrees, ceteris paribus

Interest rates in foreign countries increase, ceteris paribus

Price level in the United States increases, ceteris paribus

Productivity in the united states increases, ceteris paribus

The long term demand for real money balance will rise when

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the income elasticity of the demand for money is less than unity.

There is a long term increase in the price level

There is a relative increase in the stock of government securities.

Long term market interest rates are falling.

in the keynesian model in the short run the amount of employment is determined by the effective labor demand curve and the level of.

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Prices

Output

The real interest rate

The supply of labor

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