Question # 1

In a pure market economy which of the following is a function of the price.

i - provide information to sellers and buyers

ii- Provide incentives to sellers and buyers

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I only

ii Only

both i and ii

Neither i nor ii

The exchange rate is kept the same across geographically separate markets by

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Hedging

Speculation

Government regulation

Arbitrage

Which of the following is a policy instrument .as opposed to a government objective.

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Lower interest rates

A better balance of trade position

Faster economic growth

Lower un employment

In the short term a firm will produce provided the revenue

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Covers fixed costs

Covers variable costs

Covers total costs

Covers revenue

A nation wishing to reduce its current account deficit would be advised to.

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Engage in more government spending.

Reduce government taxes

Increase private investment spending

Decrease domestic consumption spending

Qualitative research focuses primarily on the meaning of.

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Subjective attributes of individuals groups

Objective attributes of individuals or groups

Facts of Indi duals or groups

Descriptive attributes of individuals or groups

A tariff can ___________ raise a country's welfare

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Never

Sometimes

always

None of the above

The value of a producer's output minus the value of the inputs if purchases from other producers is called the producer's

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Surplus

Profit

Gross product

Value added

Ahmed regression model yields a Durbin Watson d statistic whose value is 0.002. The results indicate.

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Positive serial correlation

the presence of multicollinearity

No serial correlation

Negative serial correlation

Naveed purchases product M for which his income elasticity of demand is negative Apparently product M is.

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A necessity

An independent good

An inferior good

A luxury good

In August ____ the government established a working group on private investment for the Eight Five Year plan 1993-98

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1989

1990

1991

None of these

Accordant the wealth effect , an increase i the price level _______ real wealth and ____ consumption expenditure.

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Increase, Increases.

Increases ; decreases

decreases ; increases

decreases ; decreases

When your grandmother keeps her savings hidden under her mattress she is using money as.

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a standard of deferred panyment

A comfortable thing for sleeping

A medium of exchange

A store of value

Why would corporations want to achieve zero balances in their checking accounts.

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To earn more interest

To avoid paying taxes

to keep a low profile

To circumvent banking regulations

The low point in the business cycle is referred to as the

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Expansion

Boom

Trough

Peak

There are three fundamental questions every society must answer Which of the following is one of these questions.

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What goods and services are to be produced.

How are the good and services to be produced.

Who will get the goods and services what are produced.

All of the above

In the short run, the supply of farm commodities is.

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Inelastic

Less elastic

More elastic

Undetermined

All of the following are obstacles to international economic policy coordination except.

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Different national objectives are institutions

Different national political climates

Different phases in the business cycle

Different national currencies.

An increase in interest rates.

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Is likely to reduce savings

Is likely to reduce the external value of the currency

Leads to a shift in the MEC schedule

Leads to a movement along the MEC schedule

A situation in which expansionary in monetary policy has no effect on the economy is known as.

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Macro economic stabilization

A liquidity trap

A depression

Capital flight

According to Marshall the basis of consumer surplus is.

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Law of diminishing marginal utility.

Law of equal marginal utility

Law of proportions

All of the above

Regarding Industrial development in Pakistan in 1960 following policy was adopted.

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Import substitution

Export promotion

Both

None of these

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

Measure of skewness gives.

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Direction of skewness

Extent of skewness

Both a and b

None of these

Prohibiting a trade between two people

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Will promote economic efficiency

Probably Will inhibit productive efficiency

Might be necessary if resources are to be put to their most highly valued uses

Will have no effect on other persons.

Union of A with B is same as union of B with A, that is AUB = BUA is termed as

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Associative law of union

Cumulative law of union

Reflective law

All the above

A tariff -rate quota

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Is a limit on the number of tariff that a country can place on imports

Uses a single tariff along with import quotas to restrict imports

Is decreased to avoid the price increase caused by simple tariffs

Is a two tier tariff system intended to restrict imports

in UDCs a potential resource of saving is

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Structural unemployment

Over employment

Domestic saving

Disguised unemployment

In which of the following situations will an increase in the money supply have no effect upon equilibrium income.

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LM is steeply sloped and IS is relatively flat

LM is vertical and IS si steeply sloped

LM is steeply sloped and IS is vertical

LM is relatively flat as is IS

An increase in aggregate demand will have most effect on prices if.

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Aggregate supply is price inelastic

Aggregate supply is price elastic

Aggregate supply has a unitary price elasticity

Aggregate demand is price inelastic

In a matrix , if there is only one row but any number of columns, it is called.

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Row matrix

Column matrix

Raw vector

Both a and c

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