Question # 1

Fiscal policy refers to the manipulation of government income and expenditure to.

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control the volume and price of money

Limit the rate of increaes in incomes

Effect the value of the dollar on world financial market.

Affect the level of total expenditure output and employment

A fall in interest rates is likely to

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Increase aggregate demand

Increase savings

Decrease consumption

Decrease exports

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

Finance minister tax a commodity

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having elastic demand

ignore elasticity

Having unti elastic demand

Having unit elastic demand

In monopolistic competition firm sell

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Same goods

Differential goods

Inferior goods

Superior goods

A Rs.10 increase in autonomous investment spending shifts is.

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Rightward by Rs. 10

Leftwards by Rs. 10

Rightward by Ke (Rs.10)

Leftward y Ke (Rs.10)

The normal interest rate minus the inflation rate is the

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Depreciation rate

Discount rate

Real interest rate

Forward rate

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

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Less than zero

Zero

One

None of these

A contraction in supply occurs when

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Demand shifts out wards

The supply curve shifts inwards

The quantity supplied falls when the price falls

The supply curve shifts outwards

Which skills are most likely to be paid for by the employer.

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General skills

Specific skills

Educational skills

None of these

Trade based on comparative advantage assures that.

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Only the strongest suvrive

Some people are rich and others are poor

Each item is produced using the least amount of time needed to produce it

Each item is produced at as low a cost possible in terms of other things given up

If a consumer's budget constraint is given as P, X,+ Py Y = B thent he absolute slope of the budget line is.

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B

x/y

P/Py

None of these

If any equation involving two variables, such as y -=2x + 1, the variable that appears on the right hand side of the equation is by convention called.

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Dependent variable

independent variable

Endogenous variable

Explained variable

Economics growth can be seen by an outward shift of.

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The production possibility frontier

The gross domestic barrier

The marginal consumption frontier

The Minimum Efficient scale

An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate

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right ; falls

right ; rises

left ; falls

left ; rises

In singular sense 'Statistics' is considered as.

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Statistical data

Statistical methods

Both a a and b

None of these

In Kaldor model saving income ratio in the growth process is considered.

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Constant

Positive

Variable

Negative

The through of a business cycle occurs when ______ hits its lowest point.

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Inflation

The money supply

Aggregate economic activity

The unemployment rate

Which of the following causes M1 demand to decrease.

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A fall in the tax rate

An increase in income

A fall in the interest rate

An increase in the use of credit cards

Perfect international capital mobility suggests that international funds will be responsive to _______ differentials.

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Current account

Interest rate

Tax

Price

The impossibility of negative gross investment provides a______ to fluctuations in.

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Celling, stock building

Celling, capital prices

floor , output

floor , the capital output ratio

A primary reason why nations conduct international trade is because.

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some nations prefer to produce one thing while others produce another.

Resources are not equally distributed to all trading nations

Trade enhances opportunities to accumulate profits

Interest rates are not identical in all trading nations

World trade has been increasing due to.

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Increased tariffs

Increased legal barriers

Increased embargoes

Reduced protectionism

Over time the price of primary products tends to fall because.

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Demand is income elastic

Supply is income elastic

Of outward shifts in supply

Demand is price elastic

The fact that the long run Phillips curve is vertical implies that

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Monetary policy can't effect unemployment

Money is neutral in the long run

There is a natural rate of inflation

Money can't affect inflation in the long run

Which of the following macroeconomic variables is procyclical and lags the business cycle.

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Business fixed investment

Empolyment

Stock prices

Nominal interest rates

An increase in the money supply other thighs equal shifts the ______ curve to the

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IS ; right

Is ; left

LM ; Left

LM ; right

____________ represents the difference between what consumers have to pay for a product and what they are willing and able to pay.

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Producer surplus

Deadweight surplus

Government surplus

Consumer surplus

In perfect competition a firm is.

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Price taker

Price setter

Independent

Dependent

Positive cross elasticities suggest that goods are ______ and negative cross elasticities that goods are.

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Substitutes, interior

Normal, complements

Substitutes, complements

Normal , interior

All of the following are credit items in the balance of payments except.

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Investment inflows

Merchandise exports

Payment for American service's to foreigners

Private give to foreign residents

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