Question # 1

The nominal interest rate minus the inflation rate is the

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Depreciation rate

Discount rate

Forward rate

Real interest rate

In the long run an increase in government purchases of military equipment would cause output to _________ and the aggregate price level to

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Stay constant fall

fall ; fall

fall ; stay constant

stay constant ; rise

In the short run the competitive firm will produce if.

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Price is equal to marginal cost

Price is equal to marginal revenue

Price is equal to total cost

Price is equal to are greater than average variable cost.

When a person received an increase in wealth, what is likely to happen to consumption and saving.

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Consumption increase and saving increases.

Consumption increases and saving decreases

Consumption decreases and saving increases

Consumption decreases and saving decreases

Which of the following groups is most hurt by unexpected inflation.

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Workers with cost of living adjustments in their labor contracts

Home owners

People with large debts to pay for their homes and cars

People with large retirement savings held in savings accounts.

While resources and products flow in one direction of the circular flow model what flow the other direction.

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Services

Public goods

Money

Imported goods

Applied research is problem oriented and

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Analytical directed

Scientific procedure

Scientific research

Action directed

If Supply and demand both decrease simultaneously. Which of the following will happen.

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Price will rise

Quantity sold will rise

Price will fall

Quantity sold will decrease

Headquarter of the Planning commission of Pakistan is located in.

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Karachi

Lahore

Islamabad

None of these

The average total cost of a wedge increases from Rs. 0.79 ro Rs. 0.83 Evidently

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AFC exceeds AVC

MC is between Rs. 0.79 and Rs. 0.83

AVC is Rs. 0.83

MC is greater than Rs. 0.83

Credit (+) items in the balance of payments correspond to anything that.

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Involves receipts from foreigners

Involves payments to foreigners

Increases the domestic money supply

Decrease the demand for foreign exchange

Last land reforms made in 1977 by

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Z.A.Bhutto

Zia ul Haq

Nawaz Sharif

None of these

Earning from primary products are often unstable because.

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Demand is price elastic

Supply is price elastic

Supply conditions are relatively stable

Supply conditions are unstable

Why do people keep currency in their pockets when bank deposits pay interest.

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Because banks might steal your money

Because currency is more liquid

Because bank deposits lose value due to inflation

Because bank deposits lose value due to exchange in interest rates.

Research design indicate a plan of action to be carried out in connection with a proposed.

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Research proposal

Research methodology

Research abstract

Research work

Which of the following macroeconomic variables is procyclical and lags the business cycle.

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Business fixed investment

Empolyment

Stock prices

Nominal interest rates

The natural rate of unemployment is likely to tall if

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Unemployment benefits increase

Income tax increases

More training is available for the unemployed

Geographical immobility increases

Suppose the intersection of the IS and LM curves is to the left of the FE line A decrease in the price level would most likely. eliminate a disequilibrium among the asset labor and goods markets by.

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Shifting the LM curve down and to the right

Shifting the IS curve up and to the right

Shifting the IS curve down and to the left

Shifting the FE curve to the left

An autonomous increase in money demand.

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Shift the IS curve to the right

Shifts the IS curve to the left

Shift the LM curve to the right

Shift the LM curve to the left

To reduce cyclical unemployment the government might.

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Increase the budget surplus

Increase the balance of payments deficit

Reduce interest rates

Reduce government expenditure

Firm in oligopoly are likely to.

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Invest heavily in branding

Act independently of other firms

Try to differentiate its products

Try to be a price maker

Nontariff trade barriers could include all of the following except.

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Domestic content laws

Government procurement polices

Health , safety, and environmental standards

Antidumping counter/vialling duties applied to imports.

A group of modern economists who believe that price and wage rigidities do not provide the only rationale for macroeconomic policy activism are called.

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New Keynesians

Keynesians

Monetarists

The Classical shool

If there is a price celling, there will be.

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Shortages

surpluses

Equilibrium

None of these

Money must fulfill all of the following functions except.

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Be a medium of exchange

Be a store of value

Be generally accepted as a means of purchasing commodities

The above are all functions of money

Friend man's theory of consumption focuses on

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Past income

Current income

Disposable income

Permanent income

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

If the intercept of the consumption function is 75, and MPS is 0.10 the value of consumption expenditures at Yd = Rs. 5,000 is

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Rs.4,500

Rs. 575

Rs.500

Rs. 4,575

An increasingly higher marginal income tax is

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Progressive

Regressive

Proportional

Both b and c

Since 1960 the rage of economic growth in the country has been

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On the decline continuously

Increasing continuously

increasing occasionally.

Static in real terms

In the efficiency wage model with the efficiency wage above the market clearing wage when employment is at its full employment level.

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Labor supply equals labor demand

There is an excess supply of labor

there is an excess demand for labor

There could be either an excess demand for or an excess supply of labor

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