Question # 1

The opportunity cost of holding currency decreases when.

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Income decreases

The interest rate on bonds decrease

Buying newly issued government bonds directly from the central bank

Buying newly issued government bonds directly to the central bank.

The firm under monopolistic competition is likely to produce less and set a higher price than under perfect competition because.

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The firm faces decreasing returns to scale

The firm faces increasing costs

The firm must incur selling expenses including advertising.

The firm faces a downward sloping demand curve

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves slopes downward.

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SRAS

AD

LRAS

None of the above

The asset market approach a more helpful in explaning.

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why excahnge rates remain quite stable

Why governments change their money supplies.

Long term exchange rate movement.

Short term exchange rate movement.

According to Keynesians the primary source of business cycle fluctuation is.

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Aggregate demand shocks

Productivity shocks

Oil price shocks

Consumer confidence shocks

A Horizontal demand curve for a good could arise because consumers.

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Are irrational

Are not sensitive to price changes

View this good as identical to another good

Have no equivalent substitutes for this good

Which of the following are function of inferential statistic.

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Estimation

Testing of hypothesis

both a and b

None of these

During the early years of the Great depression there was a significant decrees n the the money supply that causes. the ______ to shift____

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IS ; Leftward

IS ; rightwards

LM ; Leftward

LM ; rightward

A negative definite Hessian fulfills the second order conditions for.

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Maximum

Minimum

both maximum and minimum

Mini max

"More reliable results can be obtained through sampling method" because.

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Statistical error is low

Saves time

Cost is low

None of the above

Capitalism refers to

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the use of markets

Government ownership fo capital goods

Private ownership of capital goods

Private ownership of homes and cars

Which of the following would qualify as an aggregate demand shocks.

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An unexpected increase in oil prices

A seasonally expected increase in oil prices

An unexpected reduction in consumer confidence

an anticipated tax cut

Horizontal integration may lead to internal economics of scale. Which of the following is not a type of internal economy of scale.

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Purchasing

Technical

Financial

Safety

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

The prisoners Dilemma Game demonstrates that.

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Players are better off to act independently

Monopoly is better than competition

People will always cheat

Players are better off if they con operate

If tastes are identical between countries than 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.

Who own the random number table which comprising of 15,000 digits arranged in twos.

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Kendall and B,B. Smith

L.H.C. Tippet

British Census report

Fisher and Yates

The arc elasticity formula is used to estimate elasticity when

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The product is thought to be inelastic

The product is thought to be elastic

The demand function is known

There are two observations of price and quantity

In the Keynesian corss diagram, and cline 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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up ; left

up ; right

down ; left

down ; right

Keynes suggested that ________ income households consume a ____ proportion of their income than ____ income households.

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Low ; smaller ; high

Low ; larger ; high

low ; smaller ; middle

High ; larger ; low

"A monetary rule need not mean a single baid number If the central bank fears velocity shifts rules could be adopted for adjusting the target in the face of a trends change in velocity "If velocity were trending upward the target money growth rate would be adjusted.

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Upward

Down ward

To be zero

To match inflation

The single European Act committed_ governments to a ___ in 1992

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European union, single market

Western European, single currency area

European union, single currency area

Western European, single market

When the demand curve is a straight line the elasticity of demand at the center point will be.

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Equal to zero

infinite

More than one

Equal to one

A model of game theory of oligopoly is known as the

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Prisoner's dilemma

Monopoly cell

Jailhouse sentence

Jury box

Increases in minimum wage

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Helps in controlling unemploymentr

Increases unemploymentr

Reduce wage bill

None of these

If a firm not operating at the output necessary to achieve al scale economies it has not achieved its.

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Efficient scale

Average efficient scale

Maximum efficient scale

Minimum efficient scale

Devaluation of rupee would result into

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Expensive exports

Expensive imports

Expensive labour

Overvalues Rupee

In perfect competition.

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the products firm offer are very similar

Products are heavily differentiated

A few firms dominate the market

Consumers have limited information

A shift in supply will have a bigger effect on price than output if demand is.

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Income elastic

Income inelastic

Price elastic

Price inelastic

The primary function of a bank is to.

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Control the money supply

Provide notes and coins for trade

Make a profit

Provide a chequeen clearing system.

If the autarky price of S were lower in country A than in country B, then if trade were allowed.

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A would likely exports s to B

A would likely import s from B

Neither country would want to trade

None of the above

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