Question # 1

A market is in equilibrium when

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Ac = P

MC = MR

AC =AR

TC =TR

Economic transition involves high inflation because ______ and _____

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High monetary growth, high wages.

High budget deficits, devaluation

High monetary growth, devaluation

Prices surge from an artificially low level to their equilibrium level the inflation tax is required as source of government revenue.

Which of the followings is NOT component of M-2

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Small time deposits

Money market mutual funds

Stocks

Checkable deposits

As income increases.

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the average propensity to consume gets nearer in value to the marginal propensity to consume

the average propensity to consume diverges in value from the marginal propensity to consume

the average propensity to consume falls

The averge propensity to consume always approaches 0

According to Keynesian macro economics price adjust _____ to shocks, so the government should.

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Slowly ; do little

Rapidly ; do little

Rapidly ; fight recessions

Slowly ; fight recessions

Islam is against

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Miseries

Luxurious spending

a and b

None of these

Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are.

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Market prices

Sticky prices

Fixed prices

Regulatory prices

A decrease in autonomous consumer expenditure causes the equilibrium level of 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

The appropriate expenditure switching policy to correct a balance of payments deficit is.

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Contractionary monetary policy

expansionary fiscal policy

Currency devolution

Currency revaluation

The notation that communism should be imposed on a nation's rulers so that they would neither be tempted by possessions nor diverted from the task of wise governance was proposed by.

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Plato

Aristotle

Xenophon

Protagoras

The "compensated" demand curve is the demand curve that.

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Shows only the income effect

Shows only the substitution effect

Shows both the income and substitution effects

Shows the Geffen good demand curve

If a few firms dominate an industry the market is known as.

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Monopolistic competition

Competitively monopolistic

Duopoly

Oligopoly

A utility contour shows all the alternative combinations of two consumption goods that.

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Can be produced with a given set of resources and technology

Yield the same total of utility

Can be purchased with a given budget at given prices

Equate the marginal utilities of these goods and therefore make the consumer indifferent between them.

In monopoly which of the following is true.

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There are many buyers and sellers

There is one main buyers

There is one main seller

The actions of one firm do not affect the market price and quantity.

The study which wants to determine the frequency of occurrence of an event of its association with something.

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Descriptive

Explorative

Formulate

Diagnostic

____________ 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

Banks can create money

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Only by illegally printing additional dollar bills

By paying interest to their depositors

By making loans that result in additional deposits

By offering financial services, such as stick market brokerage

The Marginal cost of product W exhibiting positive externalities is McW = 25 + 5 Qs, the competitive price for each unit of W (Pw) is Rs. 175 and the positive externality is worth Rs. 100 to society for each unit produced. Society considers product W under produced by how many units.

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10 Units

15 Units

20 Units

5 units

Social welfare is maximized when a hedonistic calculus regulates all human action according to the interventionist liberal

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John Stuart Mill

Thorstein veblen

Milton Frideman

Jeremy Bentham

If the government increase spending and raises taxes by just enough to finance the increase it will.

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Leave output unchagned

Increase output

Reduce output

Increase the MPC

The law of demand states that

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As the quantity demanded rises, the price rises

As the price rustiest he quantity demined rises

As the price rises, the quantity demanded falls

As supply rise, the demand rises

in 1950s following sector was ignored

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Agriculture sector

industrial sector

import sector

Services sector

Objectivity means basing conclusions on facts without any bias and.

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Pilot study

Paradigm

Value judgment

Concept

BATA's marginal utility per dollars is .8 for both shorts and running shoes,. To attain her consumer equilibrium BATA should.

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Buy an additional pair of shorts

Buy an additional pair of both items

Possibly not make any adjustment in her behavior

Sell her shorts and keep her shoes

Factors that cause the IS curve to shift include.

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Changes in autonomous consumer spending

Changes in government spending

Changes in investment spending related to business confidence

All of the above

Last land reforms made in 1977 by

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Z.A.Bhutto

Zia ul Haq

Nawaz Sharif

None of these

In the Keynesian cross diagram a decline in autonomous consumer expenditure causes the aggregate demand function to shift down The equilibrium level of aggregate output to ___________ and the IS curve to shift to the

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rise,; left

rise ;right

fall ; left

fall ; right

A mixed economy

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Has supply but not demand

Has demand but not supply

Has supply and demant

Has market forces and government intervention

Net taxes are.

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Government expenditures minus government revenues.

Taxes paid by firms and households to the government minus the transfer payments made to firms and household.

Taxes paid by firms and household to the government plus transfer payments made to firms and hose holds.

Taxes paid by firms and hose hold to the government minus the cost of collecting the taxes.

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

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Milton Friedman

Ronald reagan

Margaret Thatcher

John Maynard Keynes

In the balance of payments, travel and tourism are included in the category of

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unilateral transfers

Capital account

Merchandise account

Services account

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