Question # 1

"The quantity demanded increases as its price increases and falls as its price falls" is called given goods, is presented by.

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Allen

Marshall

Adam smith

Robert griffin

The term of trade in Pakistan remained unfavorable regarding.

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Industrial sector

Services sector

Agricultural sector

All of these

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

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inflationary expectations

Unemployment

The inflation rate

Wage rates

Those who favor setting the target rate of inflation at about 3% believe.

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The cost of moderate inflation can be minimized by indexing the tax system and bonds

that the cost of going to 0% is very low

That moderate inflation increases money illusion

Believe that moderate inflation aggravates the time inconsistency problem

The point at which the graph cuts the x axis is called.

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x- intercept

y - intercept

slope

None of these

If the price of factor A is Rs.8.00 per hour, and its marginal product is 10 units, and the price of factor B is Rs. 5.00 and its marginal product is 9, is the producer is likely to.

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Hire more of A and less of B

Hire more of B and less of A

Start paying factor A more

Try to use factor B more productively

If the Bank of Pakistan wished to pursue a tight monetary policy is would.

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Sell government securities on the open market.

Reduce the minimum reserve asset ratio

Buy government securities on the open market.

Lower interest rates

When there is a surplus in a market

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There is downward pressure on price

There is upward pressure on price

The market could still be in equilibrium

There are too many buyers chasing too few goods.

The equilibrium level of Y and I derived from the LM and IS equations above is.

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Y = 130 and I = 10%

Y = 200 and I = 30%

Y = 180 and I = 7%

Y = 250 and I = 2%

The impossibility of negative gross investment provides a______ to fluctuations in.

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Celling, stock building

Celling, capital prices

floor , output

floor , the capital output ratio

In economics, the term 'scarcity' refers to the fact that

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Everything worthwhile costs money

No society is able to produce enough to fully satisfy the desires of people for goods.

Even in wealthy societies, like the united states, some people are poor

sometimes shortages of product result if its price is set too low.

In any urban are there are people who have had healed wounds

Who defined research is an organized enquiry.

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Kerlinger

Emory

Mony

Redman

Profit is measured by

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Revenue - Fixed costs

Fixed cost + revenue

Revenue - sales

Revenues - total costs

Which of the following statements is true about platykurtic curve as compared to normal curve.

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Flatter

Broader central position

Lower tails

All of the above

Less demand in the economy may increase unemployment this may lead to less spending which may reduce demand further This is called.

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The upward accelerator

The downward multiplier

The upward PPF

The downward MPC

The near term effect of an unexpected sale of bonds by the central bank is.

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An increase in interest rates, a risen investment and a rise in GDP

An increase in interest rates a drop in investment and a drop in GDP

A decrease in interest rtes a rise in investment and a rise in GDP

A decrease in interesr rates a drop in investment and a drop in GDP

All of the following are recognized as arms of agricultural price program except.

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Dampening the fluctuations agricultural commodity price.

Maintaining some purchasing power of agricultural households

Shifting the elastic demand for agricultural commodities.

Appeasing some politically powerful special interest grops

There are three fundamental questions every society must answer Which of the following is one of these questions.

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What goods and services are to be produced.

How are the good and services to be produced.

Who will get the goods and services what are produced.

All of the above

A public good

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Is provided by the government

Is free

Has the properties of being non excludable and non diminishable

Has external costs

The reduction or covering of foreign exchange risk is called.

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Hedging

Speculation

Intervention

Arbitrage

If the fprice in a market is fixed by the government below equilibrium.

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There is excess equilibrium

There is excess supply

There is excess demand

There is equilibrium

Projects A,B,C,D,E cost Rs. 100, Rs, 200, Rs. 300, Rs. 400, and Rs. 500 with MEC's of 0.07, 0.06,0.09 ,0.10 and 0.11 respectively. The market rate of interest is 8% Total investment spending is

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Rs. 1500

Rs.1300

Rs.1200

Rs.300

What makes economics scientific.

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It tests theories against observations and modifies the theories if needed.

It uses numbers to measure things

It involves the use of experiments

It is a description of how thing work

The Schumpeterian growth model is based upon

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Inveslors

Capital formation

entrepreneurs

all of these

Given the cost data indicated in the table above the average variable cost of producing 7 units of output is

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Rs.37

Rs.29

Rs.31

Greater than Rs.37

An increase income will

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Lead to a movement along the demand curve

Shift the supply curve

Shift the demand curve

Lead to an extension of demand

import substitution is the replacement of ________ by domestic production under the protection of.

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exports, subsidies

Exports, patents

imports, high tariffs or import quotes

Imports, subsidies

When the price of an inferior goods falls ceteris paribus the substitution effect leads to ________ in the quantity purchased and the income effect leads to _______ in the quantity purchased.

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An increase an increase

An increase, a decrease

A decrease, an increase

A decrease, a decrease

A change in the full employment quantity of labor_________ the short run aggregate supply curve and ______ the long run aggregate supply curve.

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shifts ; shifts

shifts ; does not shift

does not shift ; shift

does not shift ; does not shift

a x2 + bx + c = 0

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Linear equation

Quadratic equation

Polynomial of degree five

None of these

The increase in base money divided by the corresponding induced increasing commercial bank deposits is the.

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Bank's line of credit

Reserve ratio

Current ratio

Money multipiler

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