Question # 1

Starting from a balanced budget, for a given tax rate an increase in income will cause the government budget to.

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Move into surplus

Move into deficit

Remain unchanged

None of these

A stable equilibrium requires that the marginal propensity to consume is.

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Less than zero

Zero

One

None of these

The relation ship between the exchange rate and the prices of tradable goods is known as the.

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Purchasing power parity theory

Asset markets theory

Monetary theory

Balance of payments theory

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

Monetary policy can affect output.

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this statement is always true

This statements always false

This statement is true only in the short run

This statement is true only in the medium run and the long run

An increase in autonomous consumer expenditure causes the equilibrium levelof 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

In the long run a reduction in labor supply would cause output to _______ and the aggregate price level to.

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fall; rise

fall ; fall

rise ; fall

rise; rise

Short run equilibrium output means that aggregate demand _ actual output

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is less than

equals

is greater than

fluctuates around

The method most commonly used to test the overall significance of a regression is.

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The t test

The F -test

Chi square test

R

Utility means.

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Power to satisfy a want

Usefulness

Willingness of a person

Hamfulness

Application of Modern technology to increase the yield is due to

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Subsistence farming

Mechanization

Green revolution

None of these

The multiplier is the reciprocal of A

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Marginal propensity to consume

Both MPF and MPS

Marginal propensity to save

None of these

Economic theory assumes that people

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Act in greedy and selfish ways, without regard for the welfare of others.

Act without regard for their own interests.

Are not motivated by self interest

Are motivated by self interest but still might be concerned for the welfare of others.

If there is a price celling which of the following is NOT likely to occur.

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Rationing by first come first served

Black markets

Gray markets

Sellers providing goods for free that were formerly not free

Possible causes of involuntary unemployment are

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Minimum wage agreements

Trade unions

Scale economies

All of the abvoe

The statement that marginal cost = marginal revenue leads to profit maximization of loss minimization is true.

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All the time

Only in the long run

Only if "marginal cost is rising at the point of equality.

Only if average total cost is falling at the point of equality

If a long average cost rises, output rises from left to right this is an example of.

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Increasing returns to scale

Decreasing returns to scale.

Constant returns to scale

the minimum efficient scale

An increase in aggregate demand is more likely to lead to demand pull inflation if.

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Aggregate supply is perfectly elastic

Aggregate supply is perfectly inelastic

Aggregate supply is unit elastic

Aggregate supply is relatively elastic

Aggregate demand in an economy trading internationally with a government sector can be written s.

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AD = C+1

AD = C + 1+ G

AD = C +1+G+X+Z

AD+C+1+G+X-Z

Extension and contraction of demand mean

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Movement on the same demand curve

Movement to high demand curve

Movement to lower demand curve

Movement to another demand curve

Which school of economic thought suggested that one possible cause of inflation was a push from the cost side.

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New classical economists

Monetarists

Marxists

Keynesians

Full- employment output is the level of output that firms in the economy supply when

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Taxes are zero

Wages and prices have fully adjusted

The unemployment rate in zero

All capital is fully utilized

A change in autonomous spending is represented by.

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A movement along a spending line

A shift of a spending line

A change in a behavioral coefficient.

None of these

Given the demand function qo = -8p +2000 and tis inverse p = -1/8 qo + 250 ,p in the inverse function which is interpreted as the maximum price that buyers are willing to pay for the.

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Supply price

Demand price

Equilibrium price

Reserved price

If each element of a raw or column is a sum of two elements, the determinant can be expressed as the

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Sun of two determinants

Difference of two determinants

Multiplication of two determinants

Division of two determinants

Who stated statistics as 'aggregate of knowledge brought together for practical ends.

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W.I. King

A.L Bowley

Prof. H secrist

None of the above

Price discrimination is possible

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Oligopoly

Duopoly

Perfect competition

Monopoly

International trade in goods and services is sometimes used as a substitute for all of the following except.

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International movements of capital

International movement of labor

International movement of technology

Domestics production of different goods and services

Skills that can be transferred to other employers are called

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General skills

Specific skills

Non pecuniary skills

None of these

When imports from a higher cost supplier with in customs union replace imports from a lower cost supplier outside the custom union, there exists.

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Trade creation

Trade diversion

Dynamic welfare effects

Comprehensive welfare efffects

What does ceteris paribus mean.

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"Scientific method"

"Rational thinking"

"Other things remaining the same"

"There is no such thing as a free lunc"

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