Question # 1

Which of the following is necessary for a natural monopoly.

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Economies of scale

A high proportion of the total cost is the cost of capital goods

The market is very small

All of the above

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

The set of subsets of a set A is called.

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Power set of A

Complement of A

Both a and b

None of these

"Although he didn't say so, this may ultimately compet the central bank to resort increasingly to managing the money supply by managing banks excess cash reserves the stuff from which the banks create loans". How would the central bank manages these excess reserves.

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By buying bonds

By selling bonds

By changing reserve requirements

All of the above

One of money's primary roles in the economy comes from the use of money to transfer purchasing power to the future This role of money is called.

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store of value

Unit of account

Medium of exchange

Standard of deferred payment

When IMF was established.

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1944

1945

1946

1947

The multiplier tells us how much __________ chagnes after a shift in.

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Consumption, income

Investment , output

Savings, investment

output, aggregate demand

Any combination of products inside the production possibility frontier is

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Allocatively inefficient

X inefficient

Consumer inefficient

Productively inefficient

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 the international terms of trade settle at a level that is between each country's opportunity cost.

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There is no basis for gainful trade for either country

Both countries gain from trade

Only one country gains from trade

One country gains and the other country loses from trade

When the supply of money increases.

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The LM curve will shift in

The LM curve will shit out

The demand for money will decrease

The demand for money will increase

Relation with other aspect of research creates.

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Values related problem

Ethical problem

Personal prejudice and bias

Moral dilemmas

Macro economics deals with

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Only the decisions made by individuals and their results.

Only the decisions made by businesses and their results.

Mostly large scale decisions made by countries and governments, and their results.

Only the decisions made by individuals but not the results.

A welfare less occurs in monopoly where

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The price in greater than the marginal cost

The price is greater than the marginal benefit

The price is greater than the average revenue

Has the right to investigate monopolies and will assess each one on its own mertis

The short run impact of unanticipated expansionary monetary policy is that.

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Real output decrease

Employment decreases

Real interest rates decrease

Profit margins decrease

Mudaraba business is administered by the Mudaraba companies and Mudaraba rules .

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1990

1980

1981

1978

In Islamic economic system business is allowed in the field of.

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Halal goods only

beneficial goods

Consumer goods

All of these

Government policies that focus on increasing production rather than demand are called.

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Fiscal policies

Monetary policies

Incomes policies

Supply side policies

A decrease in the legal reserve ratio from 25% to 20% will

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Result in light money

Be contractionary

Increases excess reserves and the potential money multiplier

Decrease excess reserves and the potential money multiplier

The ratio of debt to GDP will be larger

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The lower the real interest rate

The lower the growth rate of output

The lower the in initial debt ratio

The lower the ratio of the primary deficit to GDP

If every elements of a raw or column of a square matrix A is zero, then the value of the determinant .

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Equal

Zero

One

Negative related

The resources in an economy are

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Constantly increasing

Fixed at any moment

Constant decreasing

Able to be transferred easily between industries

In pure monopoly what is the relation between the price and teh marginal revenue.

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The price is greater than the marginal revenue

The price is les than the marginal revenue

There is no relation

They are equal

Fractional unemployment arises when

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Unskilled or low skilled workers find it difficult to obtain desirable long term jobs

Labor must be reallocated from industries that are shrinking to areas that are growing.

Workers must search for suitable jobs and firms must search for suitable workers.

Output and employment are below full employment levels

Other things equal a decrease in autonomous consumption shifts the _____ curve to the

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IS ; RIGHT

IS ; Left

LM ; Left

LF ; Right

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

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

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Increasing

Maximum

Falling

Minimum

During period of inflation

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Those people who have fixed incomes benefit

Every one's real income falls

those people who enter long term wage agreements benefit

Those people whose real income rises faster than the general price level benefit

A tax cut __ disposable income _____ consumption expenditure and shifts the IS curve to the.

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Increases ; increases ; right

Increases ; decreases ; left

decreases ; increases ; left

decreases ; decreases ; right

In perfect competition there is.

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Many buyers

Many sellers

Homogeneous product

All of these

A positive definite Hessian fulfills the second order conditions for

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Maximum

Minimum

Both maximum and minimum

Mini max

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