Question # 1

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

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Entrepreneurs

Labour

Consumers

Producers

An increase in productivity should.

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Lead to a contraction of supply

Lead to an expansion of supply

Lead to a shift in supply outwards

Lead to higher equilibrium and lower equilibrium quantity.

Which of the following explains why demand curves slope downward.

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Prices and income

substitutes and complements

Resources and technology

Substitution effect and income effect

A price cross elasticity of 0.81 between X and Y shows that.

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They are complementary goods

They are competitive substitutes

They are not substitutes

a reduction in the price of one would cause an increase in the consumption of the other.

Policy of nationalization was adopted in the period of.

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Z.A. Bhutto

Nawaz Sharif

Zia ul Haq

All of them

The equation for a givne production function is Q = K2 + KL, initially K = 2 and L = 1 if the value of both inputs is doubted the production function exhibite.

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Increasing returns to scale

Diseconomies of scale

Constant returns to scale

Economies of scale

A beneficial supply shock would cause.

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A movement up the short run Phillips

a movement down the short run Phillips curve

The short run Phillips curve to shift upward and to the rights

The short run Phillips curve to shift down ward and to the left

In 1950's subsidies given to.

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Agriculture sector

Export sector

industrial sector

Services sector

The quantity of money demanded increases with income Thus if income increases the opportunity cost of holding money demand and re establish equilibrium in the money market This relation is captured by.

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An upward stopping LM curve

A downward sloping L curve

A downward sloping IS curve

The circular flow of money in the economy.

Given a proportional income tax and a government budget that is currently in balance, an increase in autonomous investment ceteris paribus, Increases equilibrium income and the budget.

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Remains is balance

Has a surplus

Has a deficit

None of these

In the circular flow we would expect leakages to __________ injections.

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equal

be less than

by greater than

Be less or greater than

Appreciation of the U.S. dollar results in.

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U.S. tourists traveling abroad being worse off

U.S. imports increasing.

Foreign currency buying more U.S. goods and services.

No change iin foreign pucchases or sales.

If inflationary expectations increase, the short run Phillip's curve will

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Become vertical

Become up warding sloping

Shift to the right

Shift to the left

The variable that stands alone on the left hand side of the equation such as y = 2x + 1 is known as.

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Dependent variable

Independent variable

Endogenous variable

Explained variable

A firm can fund an investment from its own sources, the opportunity cost of its investment is

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Less than zero

Zero

More than zero

Neither

The situation in which the imports are greater than exports is termed as.

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Trade surplus

Trade deficit

Budget surplus

None

Find the change in revenue to the industry due to the taxs.

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Rs. 40 billion

Rs. 34 million

Rs.25 million

Rs.36 Million.

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the ___ curve to the __________

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rise ; LM ;right

rise ; IS ; right

Fall ; LM ; left

rise ;IS; Left

A tariff that probibits imports ahs only

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A revenue effect and redislnbution effect

Revenue effect and protection effect

Consumption effect and production effect

Redistribution effect and consumption effect

Kharif crops include.

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Cotton and rice

Maize and Sugarcane

Jawar and Bajra

all of the them

That the division of labor is limited by the size of th market best applies to which explanation of trade.

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Factor endowment theory

Product like cycle theory

Economics of scale theory

Over lapping demand theory

In Balance of payments accounting tourism and travel are classified in the

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Merchandise trade account

Services account

Unilateral transfers account

Capital account

A change that increase real money demand relative to the real money supply causes.

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The LM curve to shift down and to the right

The LM curve to shift up and to the left

The IS curve to shift down and to the left

The IS curve to shift up and to the right

Which of the following is an example of a normative statement.

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Since this good is bad for you, you should not consume it.

this good is bad for you

If you consume this good you will get sick

People usually get sick after consuming this good

Supply is likely to be more price elastic.

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In the short run rather than the long run

If factors of production are relatively immobile between industries.

If there are very few producers

If it is easy to expand output

A movement along the demand curve may be caused by

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A change in income

A change en the number of buyers

A change in advertising

A shift in supply

In which of the following situations will an increase in the money supply have no effect upon equilibrium iincome.

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LM is steeply sloped and IS is relatively that

LM is vertical and IS is stopped

LM is steeply sotped and IS is vertical

LM is relatively flat as is IS

The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the.

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Sun spect theory

Multiplier accelerator model

Solow theory

New classical theory

Advocates of industrial policy maintain that government should.

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Purse free trade as a policy that leads to maximum global efficiency

Grant subsides to firms offering potential comparative advantage.

Provide loans to domestic workers in exporting industries.

Increase interest rates on loans made to firms in import competing industries.

Which of the policies in the table above an increase in social welfare according to pareto efficiency.

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Policy A

Polies A and B

Policies A and D

Policies C a, -d D

An increase in price all other, things unchanged leads to.

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Shift demand outwards

Shift demand inward

A contraction of demand

An extension of demand

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