Question # 1

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

In the short run no firm operates with a loss unless

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Variable cost equals fixed cost

Variable cost falls short of fixed cost

Total revenue covers variable costs

Total revenue covers fixed cost

Which of the following is not likely to be a government objective.

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Increasing employment

Increasing economic growth

Increasing government spending

Increasing the level of exports

An increase in government spending 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 ; LM ;Left

fall ; IS ; Left

rise ; IS ;right

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.

Women and non whiles on average receive lower comes than white men because.

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They tend to work in relatively unskilled jobs

Educational disadvantage

Firms are reluctant to invest in training

All of the above

Industries that are extremely sensitive to the business cycle are the.

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Durable goods and service sectors

Nondurable goods and service sectors.

Capital goods and nondurable goods sectors.

Capital goods and durable goods sectors.

A purely monetary explanation of the business cycle is proposed by

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Hawtrey

Schumpeter

Hansen

None of these

How much will a speculator invest now if he expects to earn Rs. 144 two years from now assuming the nominal rate of interest is 20%

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Rs.1654.29

Rs.100.00

Rs.94.00

Rs.68.00

General agreement on Tariffs and Trade was established in.

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1948

1949

1950

None of these

Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase this increase in the price of the good results in.

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A rightward shift of the supply curve

An increase in quantity supplied

A leftward shift of the supply curve

A leftward movement along the supply curve

More trade and more and is the demand made by the

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Developing countries

Developed countries

More developed countries

Non developing countries

When planned saving equals Rs.40+0.20 Yd and planned investment is rs. 60, the equilibrium level of income in.

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Rs. 100

Rs. 400

Rs.500

Rs.1000

Given the data above, the empirical equation for the IS curve is.

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Y = 275 + 10 i

Y = 225 + 50 i

Y = 250 - 10 i

Y = 275 - 501

The level of the equilibrium exchange rate offsets international difference in.

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Comparative advantage

Absolute advantage

Opportunity cost

Relative costs

What does statistics of distribution indicates.

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Consumer preference

Strength of the desire of people

Wealth of nation

Economics conditions of people

change in quantity demanded

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Downward shift of demand curve

Movement on the same demand curve

Downward shift

None of these

A firm's long run average total cost lineis

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Identical to its long run marginal cost line

Also its long run supply curve

In fact the average total cost curve of the optimal plant

Tangent to all the curve of short run average total cost

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

Inferential statistics is the branch of statistics which helps in inferring.

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Sample value

Population value

Botha a and b

None of these

A change in the money supply has a greater effect upon equilibrium income.

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The more interest sensitive private sector spending is.

The less interest sensitive private sector spending is.

The smaller the expenditure multiplier is

The more interest sensitive money holdings are to the rate of interest.

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

In the Keynesian cross diagram, an increase in autonomous consumer function to shift _______ the equilibrium level of aggregate output to rise and the IS curve to shift to the.

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up ; left

up ; right

down ; left

down ; right

The estimated regression coefficient for good Y indicates

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Goods X and Y are independent goods

Good Y is relatively elastic

Good Y is a luxury good

Goods X and Y are complementary goods

The agricultural price support program is an example of.

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A price celling

A price floor

Equilibrium pricing

None of these

Information collected by the researcher for the purposes of the project immediately

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Secondary data

Qualitative data

Primary data

Quantitative data

The world trade organization is sometimes criticized for all of the following reasons except.

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If reduces the sovereignty of member countries.

Favors free trade over the quality of the environment

It has no way to solve trade disputes among member countries.

It is a "puppet" of multinational corporations

Which of the following is not included in gorses investment.

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Business and residential constrcution.

Expenditures on consumer goods

Additions to business inventory

Expenditures on machinery

To help developing nations strengthen their international competitive rises many industrial nations have granted non nations udder the .

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International commodity engravement's program

Multilateral contract program

Generalized system of preferences program

Export led growth program

A supply curve that starts at the origin has

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A price elasticity of supply greater than one

A price elasticity of supply equal to one

A price elasticity of supply less than one

A positive price elasticity of supply

Economic transition involves high inflation because ______ and _____

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High monetary growth, high wages.

High budget deficits, devaluation

High monetary growth, devaluation

Prices surge from an artificially low level to their equilibrium level the inflation tax is required as source of government revenue.

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