Question # 1

Disposable income is.

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Income less taxes

Income less direct taxes

income less indirect taxes

All of these

Equilibrium in the money markets can be expressed by the equation i = 9k/h) Y -M/h. The slope of LM decrease when

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k increases and h increase

k increases and h decrease

k decrease and h increase

k decrease and h decrease

Mercantilism.

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Is the philosophy of free international trade.

Was a system of export promotion and barriers to imports practiced by government .

Was praised by Adam Smith in the Wealth of Nations

Both a and c

The short run impact of unanticipated expansionary monetary policy is that.

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Real output decrease

Employment decreases

Real interest rates decrease

Profit margins decrease

Economists use the phrase ceteris paribus to express the assumption.

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All else equal

Everything affects everything else.

Scarcity is a fact of life

There is no such thing as a free lunch

In the ISLM framework the decreasing investment spending believed by Keynes to be the cause of the Great Depression would be illustrated by a shift of the ____ curve to the.

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IS ;right

IS ;Left

LM ; Left

LM ; Right

The use of micro economics policies to smooth or moderate the business cycle is known as.

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Aggregate demand management.

Aggregate supply management

Automatic stabilization

Discretionary policy

The largest trading partner of Pakistan is

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Italy

US

USA

None of these

The price of Ketchup at a market increases by 12.5% per can, which results in a decrease in quantity purchased by 40% per week, the demand is.

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Relatively elastic

Relatively inelastic

Perfectly elastic

Perfectly iinelastic

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up 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 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

Expansionary monetary policy

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Tends to lead to an appreciation of nation's currency

Usually has no effect on a currency's exchange value

Tends to lea dto a depreciation of the currencies of other nations

Tends to lead to a depreciation of a nation's currency.

The use of money is more efficient than barter because the introduction of money

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Reduces the need for economic specialization

Reduces the need to exchange goods

Reduce the need for other stores of value

Reduces transaction costs

The simplest form of rectangular hyperbola is

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y = 1/x

y = x2

y = x-2

y = x3

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 risk free rate of interest would not be affected by.

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Changes in real output

Change in the money supply

Term to maturity

None of the above

A single value that represent the average characteristics of tis frequency distribution.

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quarterlies

Grouped data

Central tendency

Range

Perfect competition implies

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Homogeneous goods

Inferior goods

Superiors goods

Differential goods

The costs of disinflation would be low if

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Expected inflation falls as inflation falls

Wages and price controls were used

The Phillips curve were nearly horizontal

The Phillips curve adjusted slowly to changes in inflation

Law of demand is not applicable on

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Daily goods

Scarce goods

Consumer goods

Producer goods

Which of the following is NOT characteristics of underdeveloped nations.

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Low per capita income

Low growth rate of GNP

General needs for substantive investment in the infrastructure

Low population growth rates

A market is in equilibrium when

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Ac = P

MC = MR

AC =AR

TC =TR

On a graph a positive linear relation ship.

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Moves down to the right

Moves up to the left

Moves up to the right

Modes down to the left

What is the process of summarizing raw data and displaying them on compact statistical tables for further analysis.

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Statistical analysis

Data processing

Tabulation

Table construction

Personal inocme is obtained by adding which items to national income

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Govt. transfer payments

Business transfer payments

Both a and b

None of these

The reason that only final sales are counted in GDP is

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To avoid double counting good that are sold so as to be resold

To not count production in other countries

Because the government can't get records on intermediate sales.

To simplify the computation and no other reason

Bank create money by

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Printing it

Issuing debit cards

Accepting chequeens

Lending out part of their deposits

Which of the following is an example of a normative statement.

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Since this good is bad for you, you should not consume it.

this good is bad for you

If you consume this good you will get sick

People usually get sick after consuming this good

Union of A with B is same as union of B with A, that is AUB = BUA is termed as

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Associative law of union

Cumulative law of union

Reflective law

All the above

Rachel Carson wrote the book

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Silent spring

Transpersonal ecology

Deep ecology

None of these

If the Nominal GNP of an economy rose from Rs. 5000 to 5500 between 1985 and 1986 while the price index rose from 100 to 110 during the same period real GNP

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Fell by 10% from 1985 to 1986

Rose by 10% from 1985 to 1986

Remained constant from 1985 to 1986

Fell by 1% from 1985 to 1986

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