| 1 |
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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| 2 |
Consider the five panels of the figure on the previous page in which panel would the simultaneous imposition of restrictive monetary policy and expansionary fiscal policy cause the largest increase in interest rates.
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A. Panel a
B. Panel b
C. Panel c
D. Panel d
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| 3 |
A decrease in autonomous consumer expenditure causes the equilibrium level of 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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| 4 |
When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.
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A. more ; iincreases
B. less ; increases
C. more ; decreases
D. more ; increases
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| 5 |
The market price of bonds can fluctuate depending on
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A. How many bonds were sold
B. Who bought the bonds
C. The amount of the coupon
D. The interest rate
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| 6 |
A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.
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A. Increase; increases ; right
B. Increase ; decreases ; left
C. decreases ; increases ; left
D. decreases ; decreases ; left
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| 7 |
A sale of bonds by the central bank should cause.
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A. A fall in the interest rate
B. An increase in the money supply
C. A decrease in the reserves of the commercial banks
D. An increase in the commercial banks loans to the public
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| 8 |
You move some of your savings account balance into your checking account.
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A. M2 falls and M1 rises
B. M1 falls and M2 rises
C. M1 and M2 are unchanged
D. M1 rises and M2 remains unchanged
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| 9 |
A Political problem with discretionary fiscal policy is the.
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A. Contractionary bias
B. Big state bias
C. Expansionary bias
D. Over reaction bias
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| 10 |
When a nations money supply is Rs.1200 billion and the nominal Gros National product is Rs.4800 billion the velocity of money is.
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A. 0.25
B. 4
C. 0.4
D. Rs.4 billion
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| 11 |
A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate
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A. right ; fall
B. right ; rises
C. left ; falls
D. left ; rises
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| 12 |
Fiscal policy is purposeful movements in _____designed to direct an economy
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A. Interest rate
B. Legal structures
C. Government regulations
D. D Government spending and taxes
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| 13 |
During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____
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A. LM ; Leftward
B. LM ; rightward
C. IS ; Leftward
D. IS ; rightwards
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| 14 |
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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| 15 |
a contractionary monetary policy
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A. Reduces interest rtes
B. Reduces real output
C. shifts the LM curve to the right
D. All of the above
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| 16 |
An example of discretionary fiscal policy would be.
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A. The operation of the welfare sate
B. The operation of the processive federal income tax
C. A tax cut adopted to stimulate consumption
D. An interest rate out in plummeted to stimulate consumption
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| 17 |
Those who favor setting the target rate of inflation at about 3% believe.
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A. The cost of moderate inflation can be minimized by indexing the tax system and bonds
B. that the cost of going to 0% is very low
C. That moderate inflation increases money illusion
D. Believe that moderate inflation aggravates the time inconsistency problem
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| 18 |
Believers in the monetarist rule assert that
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A. Lags are long and variable
B. the economy cna be stabilized by automatic mechanisms
C. The central bank should keep the money supply growth constant
D. All of the above
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| 19 |
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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| 20 |
If the money supply change was correctly and fully anticipated for a change of M to MI new classical macroeconomics under the assumption of rational expectations would predict a movement from.
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A. Pont Eo to point E1
B. Pont Eo to point E2
C. Pont Eo to point E3
D. Pont E3 to point E2
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