Question # 1

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

LDC's often have a comparative advantage in the production of.

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Primary products

Intermediate products

Manufactured products

Financial services.

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

What happens to the money supply if the deficit is financed by selling bonds to the central bank.

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The money supply increases

The money supply decreases

The money supply is unaffected

We cannot tell what will happen to the money supply

The law of inertia of large numbers means.

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Opposite of the law od statistical regularity.

Same to the law of statistical Regularity

Sample in large numbers create big variations in results.

opposite to the mathematical theory of probability

Modern Technique can be applied on

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Economic land holding

Uneconomic land holding

any land holding

None of these

In an open economy leakages to imports ______ the value of the multiplier.

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Reduce

Increase

do not change

None of these

The Harrod -Domar models are based on the restrictive assumption of.

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Increasing saving income ratio

Decreasing saving income ratio

Low saving income ratio

Constant saving income ratio

Alfred Marshall formalized and then popularized the analytical technique known as

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General equilibrium analysis

Felicific calculus

Partial equilibrium analysis

Differential equations

Economics assumes that people consume goods and services to achieve.

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Status

Prestige

Utility

Self esteem

Those who argue in favor of import protection generally give the impression that such restricted trade will.

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Decrease the level of national security

Provide benefits to some particular industry

Provide benefits to the entire nation

Not yield welfare losses for the nation

"No two elements of a set are identical" this statements is.

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Always true

Sometimes true

Not true

All of the above is possible

Skills that cna be transferred to other employers are called.

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General skills

Specific skills

Non pecuniary skills

All of the above

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

___________ are quotas that lead to a complete abolishment of trade.

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Nontariff barriers

Embargoes

Voluntary export restraints

Orderly marketing agreements

Empirical research may given a new focus to the exiting theory means.

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Research clarifies theory

Researh intitiate theory

Reach refocuses theory

Psychoanalytic theory

To adjust GDP from market prices to factor cost.

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Add indirect taxes

Subtract subsidies

Deduct indirect taxes and subsides

Deduct indirect taxes and add subsides

In 1960s following policy was adopted regarding development

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Port substitution

Agriculture development

Export promotion

All of these

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

Marginal utility is equal to average utility at that time when average utility is.

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Increasing

Maximum

Falling

Minimum

Which of the following is a NOT component of M-2.

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Small time deposited

Money market mutual funds

Stocks

Checkable deposits

Cash crops cover nearly ____________ of the cropped areas

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25%

55%

15%

35%

If people are made unemployed because of a fall in aggregate demand this is known as.

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Frictional unemployment

Seasonal unemployment

Cyclical unemployment

Structural unemployment

The exchange rate system that best characterizes the present international monetary arrangement used by industrialized countries is.

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Freely fluctuating exchange rates

Adjustable pegged exchange rates

Managed floating exchange rate.

Pegged or fixed exchange rates

According to the balances growth theory

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UDCs can be developed by foreign aid

UDCs can be developed by national saving

UDCs have to start from beginning

DCS are responsible for the development of UDCs

If import licenses are auctioned off to domestic importers in a competitive market their scarcity value accurse to.

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Foreign corporations

Foreign workers

Domestic corporations

The domestic government

If a few firms dominate an industry the market is known as.

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Monopolistic competition

Competitively monopolistic

Duopoly

Oligopoly

A shift in supply will have a bigger effect on price than output if demand is.

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Income elastic

Income inelastic

Price elastic

Price inelastic

The impact of contractionary fiscal policy, according to new classical theory is that.

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Real interest rates do not change

Aggregate demand increase

Current real output substantially decreases

The price level substantially increases.

In a model in which there is no government new investment capital replacement or international trade the market value of final output equals.

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Aggregate consumption

The sum of the receipts of economic resources

The sum of wages rent interest and profit

All of the above

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