Question # 1

The equilibrium price clears the market it is the price at which.

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Everything is sold

Buyers spend all their money

Excess demand is zero

c and d

Devaluation leads to.

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Increase in imports

Increase in exports

Decline in imports

None of the above

a demand curve can shift because of changing.

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Incomes

Prices of related goods

Testes

All of the above

Depreciation is.

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A decrease in the stock of capital

Gross investment

Net investment

An increases in the stock of capital

Indifference curve has following characteristics except.

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Convex to origin

Intersect each other

Not necessary to be parallel

None of these

Non tariff trade barriers could include all of the following except

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Domestic content laws

Government procurement policies.

Health , safety and environmental standards

Autidumpiing /countervailing duties applied to imports

Which of the following events would lead to an increase in the marginal product lf labor for every equantity labor.

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An increase in the real wage

A decrease in the real wage

A favorable supply shock such as a fall in the price of oil

an adverse supply shock such as a reduced supply of raw materials.

In the efficiency wage model if the real wage is higher than the market clearing wage so that there in an excess supply of labor.

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Firms will hire new workers at lower wages

Firms will replace high paid workers with low paid formerly unemployed workers

Employers will not hire workers who are willing to work for a lower wage.

Firms will demand a higher level of effort from existing employees

A situation in which expansionary in monetary policy has no effect on the economy is known as.

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Macro economic stabilization

A liquidity trap

A depression

Capital flight

In monopoly the firm can

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Price

Output

Either price or output

Both a and b

Suppose velocity is constant and the real income elasticity of the demand for money is less than one then estimating inflation as money growth rate minus real growth rate.

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Overestimates inflation

Underestimates inflation

Is an erratic estimate of inflation

Remain an accurate estimate of inflation.

An increase in national income is.

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Likely to increase exports

Likely to decrease savings

Likely to decrease investment

Likely to increase spending on imports

R.M. Solow in his model assumes that the prices and wages are.

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Flexible

Non flexible

Rigid

None of these

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

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Panel b

Panel c

Panel a

Panel d

Economists tend to judge a model based upon

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the realty of its assumptions

The accuracy of its predications

Its simplicity

Its complexity

Based on the data above , the increase in potential MI would be

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Rs.50 billion

Rs.300 billion

Rs.60 billion

Rs.100 billion

A linear homogenous production function would reveal.

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Constant returns to scale

Increasing returns to scale

Decreasing return to scale

Doubling all inputs would more than double output

What happens to the money supply if the deficit is financed by selling bonds to the general public.

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The money supply increaes

The money supply decreases

The money supply is unaffected

We cannot tell what will happen to the money supply

Why would corporations want to achieve zero balances in their checking accounts.

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To earn more interest

To avoid paying taxes

to keep a low profile

To circumvent banking regulations

In perfect competition a firm is.

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Price taker

Price setter

Independent

Dependent

Which device is good to measure variation in open end distribution.

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Quartile deviation

Range

Mean deviation

Variance

An asset with zero carrying costs and a present value of Rs.50,000 will return continuous annual yield of Rs.5000 if the current and future rate of inters is.

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5%

8%

10%

3%

Similar to import tariffs import quotas tend to result in.

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Higher prices ad reduced imports

Increased government revenue

Increases consumer surplus

Decreased producer surplus

All of the following are trade problems of developing countries except.

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Unstable export markets

improving terms of trade

Limited access to the markets of industrial countries

Highly elastic demand curves for their products.

Import substitution is an example of.

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The principle of comparative advantage

The principle of absolute advantage

An outward looking growth strategy

An inward looking growth strategy

Those who argue in favor of import protection generally give the impression that such restricted trade will.

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Decrease the level of national security

Provide benefits to some particular industry

Provide benefits to the entire nation

Not yield welfare losses for the nation

Price controls are

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Necessary for consumer's welfares

A must to check inflation

Doomed to fall

None of these

Kharif crops include

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Rice and sugarcane

Cotton and maze

Bajra and Jawar

All of them

When economists say that a per son is economizing they mean that the person is.

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making choices to gain benefits at lowest possible cost

Making a lot of money

Purchasing goods that are generic cheap or of low quality

Learning how to run a business more effecitively

Pakistan's public debt a

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LarGer than GNP

Approximately equal to GNP

Small than GNP

Smaller than our exports

At point of satiety marginal utilityis.

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Positive

Negative

Maximum

Zero

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