Question # 1

Which of the following events will lead to a decrease in the demand for money.

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An increase in the level of aggregate output.

A decrease in the supply of money

A decrease in the interest rate

a decrease in the price level

A decrease in lump sum taxes is an examples of.

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Contractionary fiscal policy

Expansionary fiscal policy

A change in induced taxes

A and c

International dumping may involve.

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Selling goods to foreigners at a price below that charged domestic consumers

Selling goods to foreigners at a price below the cost of production

antidumping duties being levied on the imported dumped goods

All of the above

According to the crowding out effect, a there is a government deficit, the real interest rate will.__________ and investment will_________

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rise ; rise

fall ; rise

rise ; fall

fall ; fall

When supply increases in an agricultural market famer's earnings might fall because.

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Supply is price elastic

Demand is price inelastic

the government buys up all the excess production

All output must be sold at a maximum price

The term of trade is given by theprices.

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Paid to all goods exported by the home country

Received for all goods exported by the home country

Received for exports and paid for imports.

Of primary products as opposed to manufactured products.

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

Multinational corporations

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Always produce primary goods

Always produce manufactured goods

Products primary goods or manufactured goods

None of the above

When economists say that a per son is economizing they mean that the person is.

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making choices to gain benefits at lowest possible cost

Making a lot of money

Purchasing goods that are generic cheap or of low quality

Learning how to run a business more effecitively

The short run Philips curve can shift in response to changes in

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inflationary expectations

Unemployment

The inflation rate

Wage rates

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

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Monopolistic competition

Competitively monopolistic

Duopoly

Oligopoly

Economics assumes that people consume goods and services to achieve.

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Status

Prestige

Utility

Self esteem

If in market the seller is changing different prices for the same commodity from different consumers it is known as.

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Price discrimination

efficient selling

Profit maxi miser in Monopoly

all of these

Marginalize and the idea that pricing reflects marginal utility and demand was a movement way from

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the quantity theory of money

The labor theory of value

Mercantilism

None of these

A demand curve that is an equilateral hyperbola is.

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Perfectly elastic

Relatively elastic

Unit elastic

Relatively inelastic

An advocate of the classical model of the economy would claim that unemployment a created when the ___________ is above its equilibrium level in the.

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Price level, agregate economy

Tax rate, government ebudget

Wage rate, labour market

Interest rate, market for loanable funds

An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate

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right ; falls

right ; rises

left ; falls

left ; rises

Real business cycle theorists argue that ___________ can explain short and long term fluctuations in output.

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Imperfect labour markets

Rational expectations

Intertemporal decisions of households firms and government.

Sun spot cycles

Because a monopoly hires workers up to the point where their marginal revenue product equals the wage rate the monopoly will.

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Pay less than the going wage rate

Pay a wage equal to the value of the marginal product of labor

Pay less than the value of the marginal product of labor

Pay workers what they are worth to society

The price mechanism cannot.

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Act as a signal

Act as an incentive

Act as a rationing device

Shift the demand curve

The demand curve for labor for a monopolist when other inputs are fixed is equal to its

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Marginal value product curve

Marginal revenue product curve

Horizontal summation of the firms demand curve at different output prices

Marginal physical product curve

Developing countries that concentrate production in agricultural products or raw materials may face a long run decline in their international terms of trade because of.

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Inelastic demand for these products in advanced countries.

Large increase in the supplies of these products on world markets because of export expansion polices

sluggish demand for these products in advanced countries

All of the above

In Islamic economic system holding is considered against the right of.

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Entrepreneurs

Labour

Consumers

Producers

The long run aggregate supply curve.

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Is vertical

Slopes upward

Is horizontal

Slopes downward

Environmentalist speak of wilderness as a.

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Animal hertage

Moralists heritage

Environmental heritage

World heritage

An important feature of a___ is that the holder has the right , but not the obligation, to buy or sell currency

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Swap

Foreign exchange arbitrage

Foreign exchange option

Futures market contract

During inflation.

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Lenders lose borrowers gain.

Borrowers lose , lenders gain

The real interest rate rises

Borrowers and lenders both lose.

If a tax of Rs. 6 per units is imposed upon the suppliers, then.

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Tax revenue will equal Rs. 108

Price increases by Rs. 4

Quantity decreases by 4 units

Producers pay Rs. 36

Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.

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Money demand rises proportionately to the rise in wealth.

Money demand rises, but less than proportionately to the rise in wealth.

The overall effect in ambiguous

Money demand declines

The income elasticity of demand

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Is negative for normal goods

Is positive for normal goods

Equals the relative change in demand for a good divided by the relative change in the iincome of consumers all else being equal

Is correctly described by all of the above

"Economics is a science " the basis of this statement is.

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Relation between causes and effect

Use of deductive method and inductive method for the formations of laws

experiments

All of the above

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