Question # 1

Despite an expansionary monetary policy an economy experiences a recession the recession could occur in spite of the right ward shift of the LM curve if

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The IS curve shifts left ward

The IS curve shifts right ward

The money supply increase

Taxes are cut

A disadvantage of the barter system is that

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No trade occurs

People must produce all their own food clothing and shelter

The opportunity to specialize is greatly reduced.

Gold is the only unit of account

When marginal revenue equals marginal cost

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Total revenue equal total cost

There is the biggest positive difference between total revenue and total cost

there is the biggest negative difference between total revenue and total cost.

Profits are zero

If a country has a bowed out production possibility frontier then production is said to be subject to.

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Constant opportunity costs

Decreasing opportunity costs

First increasing and than decreasing opportunity costs

Increasing opportunity costs

Primary producers maybe labeled as.

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White coliar workers

Pink collar workers

Red collar workers

None of these

A tariff can ___________ raise a country's welfare

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Never

Sometimes

always

None of the above

Ad valorem tariffs are collected as

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Fixed amounts of money per unit traded

A percentage of the price of the product

A percentage of the quantity of imports

All of the above

A monopolistically competitive firm differs from a perfectly competitive firming that unlike the perfectly competitive firm it.

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Faces a downward sloping demand curve

Can change the characteristics of its product.

Can vary the price of its product.

All of the above

Supply is likely to be more price elastic.

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In the short run rather than the long run

If factors of production are relatively immobile between industries.

If there are very few producers

If it is easy to expand output

The supply of foreign currency tends to be

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upward sloping

down ward sloping

Vertical

any of the above

The law of demand states that.

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As the quantity demanded rises, the price rises.

As the price rises the quantity demanded rises

As the price rises, the quantity demanded falls.

As supply rises, the demand rises.

The costs of inflation are

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Shoe leather costs

Menu costs

Income redistribution

All of the above

Arne Naes is a

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French philosopher

American philosopher

Norwegian Philosopher

Pakistani Philosopher

In perfect competition price is settled by

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Sellers

Buyers

Producers

Both a and b

A temporary decrease in government purchases would cause.

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A rightward shift in the saving curve and a leftward shift in the investment curve

A rightward shift in the saving curve and a rightwards shift in the investment curve.

A right ward shift in the saving curve but no shift in the investment curve

No shift in the saving curve but a left ward shift in the investment curve.

The long run is a time period that is.

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Five years or longer

Long enough to change the level of labor hired

Long enough to change the size of the firm's plant

Ten years or longer

Environmentalist speak of wilderness as a.

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Animal hertage

Moralists heritage

Environmental heritage

World heritage

Which of the following are functions of inferential statistics.

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Estimation

Testing of hypothesis

Both a and b

None of these

The slope of a horizontal line is.

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One

Zero

Three

two

Which of the following is the agro based industry.

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Carpets

Iron work

Dairy farms

Woodwork

the difference between actual and planned expenditure is equal to.

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X -M

M- X

Unplanned inventory change

Excess reserves of depository institutions.

In the 1930s, when Keynes was alive a expansionary fiscal policy taking everything else constant would have led to.

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A relative large increase in Y, a smaller increate n P

A relative large increase in P, a smaller increase in Y

Both Y and P increasing with an percentage

Only Y increase

In 1950's liberal policy was adopted regarding.

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Export

Imports

Both

Non

If government spending of Rs. 10 and a lump sum tax of Rs.10 is added, the empirical equation for the new IS curve becomes.

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Y = 285 + 20 I

Y = 270 - 10 i

Y = 285 - 50 i

Y = 210 - o.5 i

The expected real interest rate minus expected inflation rate.

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Nominal interest rate minus inflation rate

Nominal interest rate minus expected inflation rate.

Expected nominal interest rate minus inflation rate

Nominal interest rate plus expected inflation rate.

When due to change in price of commodity x demand of commodity y is charged it is called.

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Income elasticity

Price elasticity

More elastic

Cross elasticity

Scientific method in the application of valid and reliable research methods.

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Experimental

Survey

Methods

Enquiry

If tastes are identical between countries then comparative advantage is determined by

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Supply conditions only

Demand conditions only

Supply and demand conditions

Can't tell without more information.

In the long run an increase in government purchases of military equipment would cause output to _________ and the aggregate price level to

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Stay constant fall

fall ; fall

fall ; stay constant

stay constant ; rise

Indifference curve is alwyas.

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Vertical

Horizontal

Concave

Convex

_____________ represent the most widely used tool in international finance for measuring the average value of a currency relative to a number of other currencies

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Nominal exchange rates

Real exchange rates

Cross exchange rates

Exchange rate indexes

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