| 1 |
Other things equal a decrease in autonomous consumption shifts the _____ curve to the
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A. IS ; RIGHT
B. IS ; Left
C. LM ; Left
D. LF ; Right
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| 2 |
Actual equilibrium is Rs. 1,500 billion and full employment is Rs. 2,500 MPC = 0.75 taxes are zero , and prices are adjustable To eliminate the observed deflationary gap , the government should.
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A. Increase G by Rs.1,000
B. Decrease G by Rs.250
C. Increase G by less than Rs.100
D. Decrease G by more than Rs.250 but less than Rs.1000
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| 3 |
Which of the following is not an important variable in growth accounting calculations.
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A. Productivity growth
B. Money supply growth
C. Labor growth
D. Capital growth
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| 4 |
A change in the money supply has a greater effect upon equilibrium income.
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A. The more interest sensitive private sector spending is.
B. The less interest sensitive private sector spending is.
C. The smaller the expenditure multiplier is
D. The more interest sensitive money holdings are to the rate of interest.
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| 5 |
If the demand for money increase relative to the supply of money
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A. Interest rates will trend upward
B. Interest rates will trend downward
C. Interest rates are not affected by increases in money demand
D. Interest rates will behave randomly
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| 6 |
an asset that can easily be exchanged for goods and services is called a.
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A. Financial asset
B. Barter like asset
C. Illegitimate asset
D. Liquid asset
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| 7 |
In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to.
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A. up ; rise
B. up ; fall
C. down ; rise
D. down ; fall
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| 8 |
If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.
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A. Money demand declines first then rises when inflation increases
B. Money demand rises
C. The overall effect its ambiguous
D. Money demand declines
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| 9 |
An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the
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A. rise ; LM ;right
B. rise ; IS ; right
C. fall ; LM, Left
D. rise ; IS ; Left
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| 10 |
"The problem with monetarism is that its advocates have seen it as infallible over short periods of time and wish it to be rigid in its application over all periods of time "The advocates of monetarism wish it to the rigid in its application over all periods of time to.
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A. Weaken fiscal policy
B. Avoid monetary policy errors
C. Strengthen the impact of monetary policy
D. Ensure the independence of the central bank
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| 11 |
The negative effect on the economy that occurs when average tax rates increases because taxpayers have moved into higher income brackets during an expansion is.
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A. Fiscal drag
B. The Laffer curve
C. Bracket creep
D. Debt burden
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| 12 |
A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______
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A. rise ; LM ;right
B. rise ; IS ; right
C. Fall ; LM ; left
D. rise ;IS; right
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| 13 |
According to classical models, the level of employment is determined primarily by
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A. The level of aggregate demand for goods and services
B. Prices and wages
C. Government taxation
D. Government spending
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| 14 |
In the Keynesian cross diagram a decline in autonomous consumer expenditure causes the aggregate demand function to shift down The equilibrium level of aggregate output to ___________ and the IS curve to shift to the
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A. rise,; left
B. rise ;right
C. fall ; left
D. fall ; right
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| 15 |
One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.
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A. store of value
B. Unit of account
C. Medium of exchange
D. Standard of deferred payment
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| 16 |
An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.
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A. Revenue from value added tax
B. Level of company profits
C. Level of unemployment
D. Average level of wages
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| 17 |
When considering any kind of economics indicator, prices are important because.
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A. They reflect the value of goods and services.
B. They are established by the government to control population 's needs
C. They categorize goods and services by their weight
D. Historically they have proved to the good predictors of futures unemployment.
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| 18 |
In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.
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A. A relative large increase in Y, a smaller increate n P
B. A relative large increase in P, a smaller increase in Y
C. Both Y and P increasing with an percentage
D. Only Y increase
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| 19 |
A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______
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A. decreases ; rise
B. decreases ; fall
C. Increases ; rise
D. Increase ; fall
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| 20 |
In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.
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A. fiscal ; expansionary
B. fiscal ; contractionary
C. monetary ; expansionary
D. monetary ; contractionary
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