Question # 1

You are gold the level of savings in the economy is Rs.25 billion of equilibrium Using the consumption function C =20 + .9 Y, find equilibrium income .

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250

900

450

350

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

A shift in tastes toward foreign goods ______ net exports and causes the IS curve to shift to the

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decreases ; right

decrease ; left

increase ; right

increases ; left

Sample implies

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Survey representation of larger whole

Smaller representation of larger whole

Population representation of a larger whole

Census representation of a larger whole

Starting from a position where the nation's money demand equals the money supply and its balance of payments is it equilibrium, economic theory suggest that the nation's balance of payments would more into a surplus position if there occurred in the nation a.

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Decrease in the money supply

Increase in the money supply

Decrease in the money demand

any of the above

The real money demand doubles while the nominal money supply is unchanged what happens to the price level.

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The price level increase by a factor of four

The price level doubles

The price level is unchanged

The price level falls by one half.

As the economy nears full capacity the short run aggregate supply curve

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Stagflation

Structural inflation

Demand side inflation

Supply side inflation

Monopoly market is characteristics by

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A large number of sellers

Only one seller

Thousand of seller

All of these

Women and non whiles on average receive lower comes than white men because.

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They tend to work in relatively unskilled jobs

Educational disadvantage

Firms are reluctant to invest in training

All of the above

By controlling the monetary base economists mean

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Controlling the money multiplier

Restricting the amount of cash in circulation

Not allowing commercial banks to issue notes and coins

making banks keep a certain % of their assets as M0

Economics is the science of Wealth who gave this definition.

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J-x Mehta

Marshall

Adam Smith

Robbins

A major advantage of monetary over fiscal policy is that monetary policy

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Can be put into effect more quickly

Affects all sectors of the economy equally

Authorities are quicker to see the need for policy

Has a more direct and predictable impact on spending.

Total revenue equals

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Price Plus quantity

Price multiplied by quantity sold

Price divided by the quantity sold

Price minus quantity sold

Labour productivity measures.

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The output per worker

The output per machine

Total output

Marginal output

The monetary base is composed of.

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Gold and silver

Currency and reserves

Currency only

Currency and checkable deposits

A decrease in fully autonomous investment other things equal shifts the ______ curve to the

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IS ; right

IS ; Left

LM ; Left

LM ; right

Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a ____ shift of the _____ curve.

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Left ward ; LM

Right ; LM

Left ward ; IS

Left ward ; AD

In perfect competition the transpiration cost

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Excluded from the total cost

Is important figure in total cost

Is ignored

All of these

Using the Keynesian model , the effect of a decrease in the effective tax rate on capital would be to cause_____ in the real interest rate and __ in output in the long run.

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An increase ; no change

A decrease ; no change

An increase ; an increase

No change ; a decrease

Perfect price discrimination means that every customer.

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Buys the same amount

Pays the same price

Pays what she thinks the product is worth

Contributes the same revenue.

In a recession

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Unemployment is likely to be low

prices are likely to increase

Growth is negative

Growth is slow

How much of the Rs. 5 billion dollar increase in the government expenditures will be financed by bond sales.

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Rs.3.5 billion

Rs.1.5 billion

Rs. 4.9 billion

Rs.2.8 billion

A stable equilibrium requires that the marginal propensity to consume is.

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Less than zero

Zero

One

None of these

The negative slope of the demand curve indicates that there is _______ relationship between the price and the quantity demanded.

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A direct

An inverse

A positive

No relationship

Following is the important feature of the Islamic economic system.

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Zakat

Usher

Mudaraba and Musharika

All of these

When the export function is Rs.100-0.2 Y , net exports are 0 when income is .

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Rs.300

Rs.400

Rs.500

Rs.600

A Rs.10 increase in autonomous investment spending shifts is.

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Rightward by Rs. 10

Leftwards by Rs. 10

Rightward by Ke (Rs.10)

Leftward y Ke (Rs.10)

An increase in the price of a complement or produce.A would.

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Shift demand for product a out wants

Shift demand for product A inwards

shift supply for product A out wards

Shift supply for product A inwards

A Political problem with discretionary fiscal policy is the.

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Contractionary bias

Big state bias

Expansionary bias

Over reaction bias

Which of these are nicknamed as Breton wood twins.

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IBRD AND IDA

IBRD AND WTO

WTO AND IMF

IMF AND IBRD

A decrease in wealth 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 in poeple face borrowing constraints.

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