Question # 1

Moral Hazard means that the act of insuring __________ that the desired outcome will occur.

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Reduces the likelihood

Increase the likelihood

Guarantees

None of the above

Which of the following causes M1 demand is decrease.

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A fall in the tax rate

An increase in income

A fall in the interest rate

An increase in the use of credit cards

In Production of goods and services tradeoffs exist becasue.

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Buyers and sellers often negotiate prices

Society has only a limited amount of productive resources

Not all production is efficient

Human wants and needs are limited at a particular point in time

What is the production level for public good W, if the government uses full cost pricing.

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Q = 2

Q = 5

Q= 4

Q = 6

Guid up of foreign exchange reserves leads to.

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Decrease in money supply

increase in money supply

contraction in money supply

None of the above

GDP difference between GNP because.

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GDP = GNP - net factor payments from abroad

GNP = GDP -net factor payments from abroad

GDP = GNP -capital consumption allowances

GNP = GDP -capital consumption allowances.

Logical rezoning process consists of induction and

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Generalization

Deduction

Verifiability

Observation

At level of income and output of 100 in the diagram above

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APC < 1

Equilibrium occurs

Consumption expenditures are equal to 100

MPC > APC

In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.

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fiscal ; expansionary

fiscal ; contractionary

monetary ; expansionary

monetary ; contractionary

In order to maximize profits a monopoly company will produce that quantity at which the

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A marginal revenue equals average total cost

Price equals marginal revenue

Marginal revue equals marginal cost

Total revenue equals total cost

To move from point E to point E1 is consistent with.

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Expectations of a constant price level

Adaptive expectations that have no adjustment for the period immediately following a change in the actual price

Rational expectations and NCM

A and B

The multiplier is calculated as.

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1(1-MPC)

1/MPS

1/MPC

a or b

Information that is represented usually as words, not numbers.

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Qualitative data

Quantitative data

Primary data

Scientific data

Factors that cause the IS curve to shift include.

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Changes in autonomous consumer spending

Changes in government spending

Changes in investment spending related to business confidence

All of the above

Less demand in the economy may increase unemployment this may lead to less spending which may reduce demand further This is called.

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The upward accelerator

The downward multiplier

The upward PPF

The downward MPC

Satellite television subscription and television detection devices are ways in which broadcasting companies address the _____ problem.

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Externality

Market imperfection

Deadweight burden

Free rider

If the determinant formed by the elements of the matrix is not equal to zero, then the matrix is called.

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Skew symmetric

Symmetric

Singular

Non -singular

The fac that the production function relating output to labor becomes flatter as wemove from left to right means that.

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The marginal product of labor is positive

The marginal product of capital is positive

There is diminishing marginal productivity of labor

There is diminishing marginal productivity of capital

What characteristics is likely to increase population grotwth.

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Family planning programs

Old age social security

Lack of women's empowerment

Rapid economic growth

Friedman and phelps suggested that there should not be a stable relationship between inflation and unemployment, but here should be a stable relationship between

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Anticipated inflation and frictional unemployment

Anticipated inflation and cyclical unemployment

Unanticipated inflation and frictional unemployment.

Unanticipated inflation and cyclical unemployment

Due to indivisibilities in demand and infrastructure economic development can be achieved.

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Balance growth according to its advocates

Unbalanced growth according to its advocates

Big pus

None of these

The money multiplier is 4, and the money creating potential of the banking system is Rs. 40,000,000. The legal reserve ratio and the excess reserves are.

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40 percent and Rs. 4,000,000

40 percent and Rs. 10,000,000

25 percent and Rs. 2.500,000

25 percent and Rs.10,000,000

If the price of automobiles were to increase substantially the demand curve for gasoline would most likely

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Shift leftward

Shift right ward

Become flatter

Become steeper

The price of salsa rises, How does the increase in the price of salsa affect the supply of salsa.

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The supply of salsa increases

The supply of salsa decreases

There is no change to either the supply of salsa or the quantity supplied of salsa

There is no change to the supply of salsa but the quantity supplied of salsa increases

Desired national saving would increase unambiguously if there were

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An increase in current output and expected future output

An increase in expected future output and government purchases

An increase in expected future output and the expected real interest rate

A fall in both government purchases and expected future output

Ti access internet services consumers must use a computer if computer prices fall, what is the effect on the demand for internet services.

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The demand for internet services increases.

The demand for internet services decreases

The demand for internet services does not change

The demand for internet services could increase, decrese, or stay the same depending on other factors.

The Hecksher Ohlin theory explains comparative advantage as the result of difference in countries.

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Relative abundance of various resources.

Relative costs of labor

Economies of large scale production.

Research and development expenditures.

A variable whose value is determined witching an economic theory or model is.

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Exogenous

Independent

Deterministic

Endogenous

Which of the following is NOT an example of non price competition the auto industry.

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End of the year discounts

Zero percent auto loans

Television advertising

Establishing market niches

Most tariffs have

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Only revenue effects

Only protective effects

Both protective ad revenue effects

Neither protective or revenue effects

In a "Lorenz curve diagram absolute equality in income distribution would appear as.

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A curved line well bowed out from the diagonal

A curved line close to the diagonal

A right angled line

A diagonal line

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