Question # 1

The costs of inflation are

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Shoe leather costs

Menu costs

Income redistribution

All of the above

In the Keynesian corss diagram, and cline in autonomous consumer expenditure causes the aggregate demand function to shift down the equilibrium level of aggregate output to___________ and the IS curve to shift to the.

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up ; left

up ; right

down ; left

down ; right

Which trade policy results in the government levying both a specific tariff and an advalorem tariff on imported goods.

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Compound tariff

Nominals tariff

Effective tariff

Revenue tariff

As the interest sensitivity of money demand increases

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The multiplier term increases

Fiscal policy has a greater effect on output

Monetary policy has a smaller effect on output

All of the above

Budget 2012 -2013 total volume is Rs. _______ billion.

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2,560

2.960

2.760

Noe of these

Which of the following will not result in an increase in the level of income.

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An increase in autonomous spending

A decrease in autonomous taxes

An increase in autonomous transfers

an increased in net tax revenues

Foundation of law of demand is.

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Law of diminishing marginal utility

Law of substitution

Law of increasing return to scale

Law of diminishing marginal rate of substitution.

Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a ____ shift of the _____ curve.

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Left ward ; LM

Right ; LM

Left ward ; IS

Left ward ; AD

You know that all taxes are distortionary under what conditions will this knowledge lead you to appose the imposition of every single tax in the economy.

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If you live in a 1st best world.

If you live in a 2nd best world

If the tax rates on some of the items are prohibitively high

Either of the above

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

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Euro

Chinses yuan

British pound

U.S. Dollar

The movement to free international trade is most likely to generate short term unemployment in which industries'.

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Industries in which there are neither imports nor exports

Import competing industries.

Industries that sell to domestic and foreign buyers

Industries that sell to only foreign buyers

When real income increases, other things equal we fan expect the demand for real money holdings to.

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Fall

Not change

Increase

Decrease

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

Given fixed exchange rates assume Pakistan initiates contractionary monetary ad fiscal policies to combat inflation. these policies will also.

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Reduce a balance of payments surplus

Reduce a balance of payments deficit

Increases both imports and exports

Decrease both imports and exports

The multiplier which specifically refers to an equal increase in government spending and taxes, giving rise to that same equal increase in national income is called.

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the Keynesian multiplier

The balanced budget multiplier

the deficit multiplier

None of the above

The very word statistics refers to.

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State craft

Science of state

Political state

Political craft

Micro economics studies such topics as

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The factors that determine inflation

The forces that influence the price of shoes

The determinants of total output

Whether the unemployment rate will rise or fall

Objectivity means basing conclusions on facts without any bias and.

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Pilot study

Paradigm

Value judgment

Concept

If as result of householder wish to save more there is a change in equilibrium income and no change in equilibrium saving this as an example of.

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Market imperfection

The law of diminishing returns

The paradox of thriff

Market failure

Monetary expansion can still be effective in getting out of liquidity trap if it's combined with.

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Restrictions on bank loans

Increased taxes

Contractionary fiscal policy

Expansionary fiscal policy

"Treating an individual as typical of a group" in the definition of.

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Pure discrimination human capital

Statistical discrimination

Human capital

Specific skills

Firm A's margin of safety is.

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0.10

0.40

0.20

0.30

Following banks were again privatized by Nawaz Sharif

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Allied Bank

Muslim Commerciale bank

None of these

Both a and b

The World Bank gives

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Long term

Short term and long term credits

Both long term credits

None of these

With no government and foreign trade sectors savings always equals.

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Intended investment

Realized investment

Botha a and b

None of these

The "Law of demand" most directly means that consumers buy

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More of a good the higher their incomes, ceteris paribus.

Less of good the higher its price ceteris paribus

Buy more of a good the less is its supply ceteris paribus

Buy less of a good the greater is its supply ceteris paribus

The retail price index is used to.

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Construct price lists

Compare shop prices

Measure changes in the cost of living

None of the above

A business cycle refers to.

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Fluctuations in the general price level

changes in the long term growth pattern of the CPI

The ups and downs of real GDP

Fluctuations in the level of corporate.

In perfect competition a firm is.

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Price taker

Price setter

Independent

Dependent

The larger the required reserve ratio the.

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Smaller is the deposit multiplier

Larger is the deposit multitier

Larger is the amount of total deposits that can created from a new deposit

Larger is the amount of total money that can be created from a withdrawal

In the Keynesian model which curve is vertical.

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LRAS

SRAS

AD

NS

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