Question # 1

It is appropriate to use the supply and demand model if in a market.

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Everyone is a price taker with full information about the price and quantity of the good.

Firms sell identical products

Costs of trading are low

All of the above

An increase in consumer income will increase demand for a __________ for decrease demand for a.

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Substitute good interior good

Normal good, interior good

Interior good, normal good.

Normal good, complementary good.

In the Keynesian model which curve is vertical.

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LRAS

SRAS

AD

NS

An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the

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Net exports LM right

Net exports LM left

Money demand IS right

Money demand LM left

Cash crops cover nearly ____________ of the cropped areas

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25%

55%

15%

35%

Positive cross elasticities suggest that goods are ______ and negative cross elasticities that goods are.

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Substitutes, interior

Normal, complements

Substitutes, complements

Normal , interior

As disposable income increases from Rs. 1500 to 2000 , saving increases from minus Rs. 50 to Rs.250 if the relationship between disposable income and saving is linear, the MPC obviously has a value of.

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.6

.8

.4

.2

Expenditure on unproductive assets are strangely criticized and savings are emphasized by

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Ibn e Khaldun

Ibn e Taimiya

Nasiruddin Tosi

None of these

The investment demand curve shifts right ward if

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The real interest rate falls

Savers increase their thriftiness

The expected profit rate increases.

The economy moves into a recession

Head quarter of general Agreement on Tariffs and trade is located in.

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Geneva

Paris

Vienna

None of these

A country that is a net international debtor initially experiences a.

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Larger savings pool available finance domestic spending

Higher interest rate which leads lower domestic investment.

Loss of funds to trading partners overseas

Decrease in tis services exports to other countire.

In the short run, the supply of capital is _______ and in the long run iwll depend on.

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Variable technology

Fixed, expectations

Fixed, rental rate of capital

Variable, interest rates.

Any combination of products inside the production possibility frontier is

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Allocatively inefficient

X inefficient

Consumer inefficient

Productively inefficient

If there is a price celling there will be

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Shortages

Surpluses

Equilibrium

None of these

If injections are greater than withdrawals.

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National income will increase

National income will decrease

National income will stay in equilibrium

Price will fall

Which of the following is not a basic assumption of perfect competition.

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Free entry and exit

Many small sellers and buyers

Perfect information

Short run

Economics is the study of.

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All business, including how they operate why the exist and how they afect

Decisions that people must make because goods and services are limited.

How to save money, spend money invest savings, and balance a checkbook

The stock market the bond market and investment strategies

Big business and its impact on our live

Which of the following actions is an example of expansionary fiscal policy.

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A decrees in welfare payments

A purchase of government scantiest in the open market

A decrease in the Bank rate

A decrease in the corporate profits tax rates

The econometric problem of errors in variables leads to

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Ballasted estimates of regression coefficients.

Autocorrelation

Unbiased estimates of regression coefficients but non minimum variance of estimated coefficients.

None of the above

Equilibrium in the market for good A obtains.

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When there is no surplus or shortage prevailing in the market

Where the demand and supply curves for A intersect

When all of what is produced of A is consumed

All of the above

Cross -elasticity following commodities is very high

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Compliments

Normal

Goods substitutes

Good compliments

What is the possible cause for a falling real GNP over a period of time.

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A general fall in the value of output though changes in quantities producted.

A general increase in prices

An increase in the value of output produced and a general increase in prices

A, B and C

Duopoly is a market situation when there is

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Single seller

Many seller

Two seller

Few seller

Import substitution is an example of

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The principle of comparative advantage

The pricnipal of absolute advantage

An outward looking growth strategy

An inward looking growth strategy

To stabilize the prices of primary products international commodity agreements have utilized all of the following except.

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Tariff -rate quotas applied to imported goods.

Production and export controls.

Buffer stocks

Multilateral contracts

A firm can fund an investment from its own sources, the opportunity cost of its investment is

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Less than zero

Zero

More than zero

Neither

Real GNP is a crude measure of national welfare because it excludes.

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Consumption

Investment

Export's

work in the home

Price elasticity at a given price is not affected by.

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The price of complements

The price of substitutes

The consumer's income

A change in supply

Money or paper currency serves at least _______ functions.

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Three

Four

Five

Seven

Potential output can be increased by _________ or by_________

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Increasing the use of labour, increasing the use of land

Increasing the use of capital, increasing the use of labour

Increasing the use of land, increasing the use of capital

Increasing the use of all inputs technical advances

By restricting labour supply a trade union can _________ and_______

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Increase the wage, increase employment

Maintain the wage, increase employment

Increase the wage lower employment

Maintain the wage, lower employment

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