Question # 1

When the Central Bank initiates actions which will lead to an increase in the supply of money IS -LM models tell us to expect that.

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The interest rate will rise

The interest rate will decline

The price level will not change

Investment will decline

Government may contribute to inflationary pressure on account of building up large.

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Numbers of employees

Welfare plans

Budget deficits

Expenditure.

If for the output of worth 1 million the stock of capital worth 4 million is required this will be.

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capital profit ratio

Output profit ration

Capital output ratio

Capital input ratio

in 1950's industrial development was observes only in.

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Food industry

Textile industry

Coal industry

Cement indusry

Union of A and a null set is equal is.

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Intersection of A and null set

Null set

Both a and b

A

Marginal utility is equal to average utility at that time when average utility is.

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Increasing

Maximum

Falling

Minimum

To maximize revenue, an excise tax should be imposed on a product

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That has a highly elastic demand curve

Such as St. Joseph's children's' aspirin.

Such as salt

such as Toyota automobiles

The valued of expenditure multiplier relates.

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The change in autonomous spending to the change in income

the change in consumption to change in income

The change in come to the change is consumption

The change in income to the change in autonomous spending.

The least common type of transaction in the foreign exchanges is a.

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Forward transaction

Spot transaction

Swap transaction

None of the above

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.

Real business cycle theorists argue that ___________ can explain short and long term fluctuations in output.

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Imperfect labour markets

Rational expectations

Intertemporal decisions of households firms and government.

Sun spot cycles

When investment spending is negatively related to the rate of interest, equilibrium income in the goods market.

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Is unrelated to the rate of interest

Is positively related to the rate or interest

Inversely related to the rate of interest

Falls as the rate of interest decreases

Which of the following rights be a scarce good.

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Love

faith

Self control

All of above

Economic growth is shown on the production possibility frontier as.

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The curvature of the PPF

An inward shift in the PPF

An outward shifts in the PPF

A movement from one point on the PPF to another

The hidden momentum of population growth is caused by

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the demographic transition

Population age structure

the opportunity coast of woman's time

Children contribution to income

The agricultural price support program is an example of.

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A price celling

A price floor

Equilibrium pricing

None of these

The market demand for a product is found by

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Horizontally summing the individual demand curves

Vertically summing the induvial demand curves

Both horizontally and vertically summing the individual demand curve.

None of the above

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

When the supply of money increases.

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The LM curve will shift in

The LM curve will shit out

The demand for money will decrease

The demand for money will increase

A mathematical statement setting two algebraic expressions equal to each other is called.

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Equations

Hypothesis

Inequality

All of above

A natural monopoly has a declining ________ over a large range of output.

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Long run marginal cost

Short run marginal cost

Long run average cost

Long run marginal cost

If there is cyclical unemployment in the economy the government might.

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Increase interest rates

Encourage savings

Cut taxes

Reduce government spending

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

A decline expected future output would cause the IS curve to.

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Shift up and to the right

Shift down and to the left

Remain unchanged

shift up and to the right only if people face borrowing constratints.

A shift in tastes toward Pakistan goods ______ net exports and causes the quantity of aggregate output demanded to______

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decreases ; rise

decreases ; fall

Increases ; rise

Increase ; fall

What characteristics is likely to increase population grotwth.

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Family planning programs

Old age social security

Lack of women's empowerment

Rapid economic growth

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

If the price elasticity is -0.3 this means.

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Demand is upward sloping

Demand is price elastic

A price fall would increase revenue

Demand is price inelastic

According to Keynes, the level of employment is determined by

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Interest rates

The level of prices

The level of aggregate supply in the economy

The level of aggregate demand for goods and services.

If a price floor of Rs.15 is imposed, the governments cost is.

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Rs.150

Rs.300

Rs.750

Rs.450

Coefficient of standard deviation is.

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SD/Median

SD/Mean

SD /Mode

AM/SD

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