Question # 1

If the demand for money increase relative to the supply of money

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Interest rates will trend upward

Interest rates will trend downward

Interest rates are not affected by increases in money demand

Interest rates will behave randomly

From a Keynesian perspective business investment will de cline as a result of.

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A fall in the interest rate

A decrease in business taxes

A decline in business expectations

Acceleration of business depreciation

Ordered Pairs of two sets are called.

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Elements

Function

Cartesian product

None of the above

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

The most widely traded currency in the foreign exchange market is the.

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Euro

Chinses yuan

British pound

U.S. Dollar

Theory is a set of systematically related propositions specifying casual relationship among variables is defined by

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Black James and Champaign

P.V. Young

Emory

Gibbes

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

Division of labor is made according to the size of market is the view of

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M.P.Todaro

Leibstein

Rostow

Adam smith

Depreciation is.

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A decrease in the stock of capital

Gross investment

Net investment

An increases in the stock of capital

An Engel curve is based on which one of the following assumptions.

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Constant prices, very incomes

Constant price, constant income

Constant incomes, varying prices

None of these

In a Boom

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Surpluses are likely to occur

Prices are likely to fall

supply will increase immediately to match demand

Shortages may occur

Economics given can be shown by

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An inward shift of the production possibility frontier

A movement down the production possibility frontier

An outward shift of the production possibility frontier

A movement up the production possibility frontier

Relation between two numbers or variables are called.

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Function

Binary relation

Inverse relation

None of the above

Public utilities tend to be

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Inefficient

Natural monopolies

subject to increasing costs

None of these

An autonomous rise in the value of the Rupee makes Pakistan goods _____ expensive relative to foresight goods which ______ net exports

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Less ; decreases

Less ; increases

More ; decreases

more ; increases

International trade is based on the idea that

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Exports should exceed imports

Imports should exceed exports

Resources are more mobile internationally than are goods

Resources are less mobile internationally than are goods

In monopolistic competition

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Demand is perfectly elastic

Products are homogeneous

Marginal revenue = pirce

The marginal revenue is below the demand curve and diverges

Unemployment Rate is a percentage relation with reference is.

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Total population

Civilian labour force

Employed persons

Unemployed persons

In perfect competition there is.

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Many buyers

Many sellers

Homogeneous product

All of these

Average fixed cost

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Is U shaped

Declines over the entire output range.

Is a long run concept only

Is influenced by diminishing returns to production

Which of the following is an automatic stabilizer.

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Unemployment benefits

Spending on education

Defense spending

Net interest

in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _____the equilibrium level of aggregate output to fall and the IS curve to shift to the.

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up ; left

up ; right

down ; left

down ; right

In the Keynesian cross diagram, a decline in autonomous consumer expenditure causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to.

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up ; rise

up ; fall

down ; rise

down ; fall

The effect of the most favored nation clause is to

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Eliminate at tariffs between countries.

Increase all tariff rates between countries

Maintain a nondiscriminatory structure of tariffs

Marlein a discriminatory structure of tariffs.

The equation for the IS curve is.

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Y = 55 - 50 i

Y = 175 - 75 i

Y = 300 - 100 i

Y = 275 - 25 i

In a simple Keynesian world assume the economy is opiating at a full employment noninflationary level worsening world conditions necessitate additional government spending of Rs.50 billion. What should be the direction of change in taxes and magnitude of change to maintain stable price and full employment equilibrium.

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Increase by Rs.50 billion

Increase by more than Rs. 50 billion

Increase by less than Rs.50 billion.

Decrease by more than Rs.50 billion.

When the central Bank ________ the money supply the LM curve shifts to the _______ interest rates ____________ and equilibrium aggregate output.

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Increase ; right ; fall; increase

increases ; left ; rise ; decrease

decreases ; left ;rise ; increases

decreases ; left ; fall ; increases

In Kaldor model saving income ratio in the growth process is considered.

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Constant

Positive

Variable

Negative

Green revolution was in the following sector

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Agricultural sector

Import sector

Services sector

Industrial sector

The MPS = 0.4 and government spending increases by 20 billion. The LM curve

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Shifts to the right by 20 billion

Shifts to the right by 50 billion

Does not shift

shifts to the left by 30 billion

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

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