Question # 1

Depreciation is.

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A decrease in the stock of capital

Gross investment

Net investment

An increases in the stock of capital

The arrangement were goods imported from trading partners in the developing world are subject to lower tariff rates than good from other countries is referred to as.

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Normal trade relation status.

Most favored nation status

Generalized system of Preferences.

Offshore assembly provisions

According to Keynes, when the great depression started the government should be.

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Done nothing

Decreased the money supply

Had a large increase in government spending.

Enacted high tariffs such as the smoot Hawley tariff

Eco philosophy deals with philosophy of

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Nature

Mind

Science

None of these

In Balance of payments accounting tourism and travel are classified in the

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Merchandise trade account

Services account

Unilateral transfers account

Capital account

Economic theory assumes that people

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Act in greedy and selfish ways, without regard for the welfare of others.

Act without regard for their own interests.

Are not motivated by self interest

Are motivated by self interest but still might be concerned for the welfare of others.

In market economics the incentive that draws entrepreneurs into industry is.

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Government bonuses for meeting production quotas

Profit

Government assumption of the risk of failure

Government assistance with making output and pricing decisions

Saving means

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Part of income for investment

Income for boarding

Non consumption of income in the current period

None of the above

The business cycle describes fluctuations in output around the.

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Trend path of output

Boom

Recession

Short run fluctuations in output

For given government spending and taxation the government budget deficit will grow in __________ and decline in _________

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booms, booms

recession, recession

booms, recessions

recessions, booms

Given or known values in an equation are called.

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Constants

Parameters

Coefficients

All of the above

Money or paper currency serves at least _______ functions.

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Three

Four

Five

Seven

An economics variable that moves in the same direction as aggregate economic activity is called.

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Countercyclical

Procyclical

A cyclical

A leading variable

Which exchange rate mechanism is intended to insulates the balance of payments from short term capital movements while providing exchange rate stability for commercial transactions.

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Dual exchange rates

Managed floating exchange rates

Adjustable pegged exchange rates

Crawling pegged exchange rates.

If a nation has an open economy it means that the nation.

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Allows private ownership of capital

Has flexible exchange rates

Has fixed exchange rates

Conducts trade with other countries

In Vann diagram the universal set is represented by

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Points within a rectangle

Points within a circle

Both a and b

None of these

If the coefficient of price elasticity is less than one

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It is normal good

It is inferior good

It is luxury good

All of these

Which of the following is not a supply side measure.

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Increased training

Providing more information

Helping individuals to move location to find work

Increasing spending on existing industries.

Game theory

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Firm are assumed to act independently

Firms are assumed to cooperate with each other

Firm collude as part of a cartel

Firms consider the actions of others before deciding what to do.

The concept of "Interdependence of markets" can refer to the interdependence between.

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Two or more factor markets

Goods and factor markets

Goods markets

All of the above

In Islamic economic system following means of gaining wealth are permitted

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smuggling

Hoarding

Gambling

None of these

Medieval scholastics, early Islamic thinkers, and Aristotie all agreed that.

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Payments of interest should be prohibited.

Commerce was modeled on a circular flow

Surpluses are enhanced throgh skilled management.

All of the above

A demand curve that is an equilateral hyperbola is.

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Perfectly elastic

Relatively elastic

Unit elastic

Relatively inelastic

Which of the following statements abut the relationship between marginal cost and average cost is correct.

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When MC is falling AC is falling

AC equals MC and MC'S lowest point

When MC exceeds Ac, Ac must be rising

When Ac exceed MC, MC must be rising

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

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Fiscal policy

Monetary policy

Both fiscal policy and monetary policy

Neither fiscal policy nor monetary policy

An entrepreneur who collects profits in the short run for a new invention is collecting.

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The competitive rate of return on capital

Temporary monopoly profit

Rent

A Ramsey surplus

Suppose there is full employment and a neoclassical aggregate supply schedule A 105 increases in the nominal money supply.

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Has no effect upon the price level

Increase the rate of interest

Increase the nominal wage 10%

Increase the real money supply 10%

Given the IS equation Y = Ke a - Ke Bn the IS slope decreases when

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Ke increase and b increases

Ke decreases and b increases

Ke increases and b decreases

Ke decreas4es and b decreases

A set of systematically related propositions specifying causal relationships among variables.

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Research

Concept

Theory

Hypothesis

a contractionary monetary policy

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Reduces interest rtes

Reduces real output

shifts the LM curve to the right

All of the above

The purpose of fiscal policy is to

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Alter the direction of the economy

Change people's attitudes toward governemnt

Educate people as to the importance of economics

Offer insight into the way thing work

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