Question # 1

In the case of an expansionary ___ policy the interest rate rise while in the case of an expansionary _______ policy the interest rate falls.

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monetary ; monetary

monetary ; fiscal

fiscal ; monetary

fiscal ; fiscal

A reduction 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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fall ;LM; right

fall ;IS; Left

fall ;LM; Left

rise ;LM; Rifht

In the short run the level of floating exchange rates is determined mainly by.

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Interest rates

Competitiveness

Trade

Speculation

The overall Budget Deficit is financed from

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External borrowing

Non bank borrowing domestically

Bank borrowing plus the above two at a and b

None of the above

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.

If banks and the private sector decide to hold less cash the money multiplier will be.

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Unchanged

Larger

Smaller

unstable

A decrease iin money demand other thing equal shifts the _____ curve to the

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IS ; right

Is ; Left

LM ; Left

LM ; Rfight

Environmentalist speak of wilderness as a.

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Animal hertage

Moralists heritage

Environmental heritage

World heritage

According to Islamic economic system the producers can earn.

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Normal loss only

Normal profit only

Abnormal loss

Abnormal profit

If the marginal revenue is positive

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Selling another unit will increase total revenue

Selling another unit will increase profits

Selling another unit will increase cost

Selling another unit will increase average revenue

If the demand curve for a good is horizontal and the price is positive then a leftward shift of the supply curve results in.

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a price of zero

An increase in price

A decrease in price

No change in price

In monopolistic competition firms profit maximize where

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Marginal revenue = average revenue

Marginal revenue= Marginal cost

Marginal revenue= Average cost

Marginal revenue = Total cost

Debit entries on the balance of payments are the entries that would.

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Mean a loss of foreign exchange

Bring foreign exchange into the country

Indicate a surplus exists

Exist at the bottom line a after all accounts are totaled.

Given the IS equation Y = Ke a - Ke Bn the IS slope decreases when

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Ke increase and b increases

Ke decreases and b increases

Ke increases and b decreases

Ke decreas4es and b decreases

The abolition of income tax would probably ________ the number of workers in employment and____________ the equilibrium. rate of unemployment.

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increase ; decrease

increase ; increase

reduce ; increase

reduce ; reduce

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

A change that increases the real money supply relative to real money demand 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.

The marginal propensity to consume is equal to.

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Total spending /total consumption

total consumption/total income

Change in consumption/change in income

Change in consumption/change in savings

In developed countries tariffs on raw materials tend to be.

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Highest of all

Higher than on manufactured goods

Equal to tariffs on manufactured goods

Lower than on manufactured goods

It essentially states that there is no relation between the variables of the problem.

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Hypothesis

Refines hypothesis

Crude hypothesis

Working

In a competitive industry each buyer and seller.

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Is a price taker

Produce different products

Believes that can influence price

Prevents the entry of competitors

If there is a price floor there will be

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Shortages

Surpluses

Equilibrium

None of these

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

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To eliminate seignior age

To allow open market operations

To enhance the credibility of monetary policy.

None of the above

Shifting cultivation is found in

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Tropical zone

Sub tropical zone

Both a and b

None of these

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

AB = BA = 1 , then B is said to

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Ad joint of matrix of A

Inverse matrix of A

Determinant of A

Cofactor of a

Which policies are expenditure changing policies.

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Currency devaluation and revaluation

Import quotas and tariffs

Monetary and fiscal policy

Wage and price controls

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

The current account includes

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The value of trade in merchandise

Services

Unilateral transfers

All of the above

The opportunity cost of acquiring education is.

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Course fees

Course fees and living expenses

The earning foregone

Course fees, living expenses and textbooks

Disposable incomes is equal to.

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National income Minus taxes

Real GDP

National income Minus taxes

National income Minus Taxes plus transfers

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