Question # 1

Given a proportional income tax and a government budget that is currently in balance, an increase in autonomous investment ceteris paribus, Increases equilibrium income and the budget.

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Remains is balance

Has a surplus

Has a deficit

None of these

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

Which of the following is an example of government policy that could reduce inflation.

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Increasing bank lending

increasing import duties

Reducing government expenditure

Reducing direct taxation

The imposition of a tariff causes consumption to _______ and imports to.

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rise , rise

fall , rise

fall , fall

rise , fall

Prohibiting a trade between two people

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Will promote economic efficiency

Probably Will inhibit productive efficiency

Might be necessary if resources are to be put to their most highly valued uses

Will have no effect on other persons.

Moral Hazard means that the act of insuring __________ that the desired outcome will occur.

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Reduces the likelihood

Increase the likelihood

Guarantees

None of the above

An injection of funds into a less developed country might set off the

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Multiplier

Marginal propensity to save

Average propensity to consume

The Laffer effect

As a result of the increase in government expenditures disposable income increases by.

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Rs.10 billion

Rs.9 billion

Rs.20 billion

Rs.5 billion

During the financial year 1999-2000 the tax yielding the largest revenue for the Federal Government was.

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Income tax

Value added tax

Excise duty

Customs duty

Expansionary fiscal policy in the classical model will cause aggregate demand to ______ potential output.

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Exceed

Fall below

Fluclaute around

Remain equal to.

Any combination of products inside the production possibility frontier is

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Allocatively inefficient

X inefficient

Consumer inefficient

Productively inefficient

in 1950s following sector was ignored

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Agriculture sector

industrial sector

import sector

Services sector

an asset that can easily be exchanged for goods and services is called a.

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Financial asset

Barter like asset

Illegitimate asset

Liquid asset

Loss must be shared according to ratio of respective investment in case of.

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Musharika

Hire purchase

Mudaraba

All of these

A competitive equilibrium is described by

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A price only

A quantity only

The excess supply minus the exceess demand.

A price and a quantity

For commodities, X and Y, the possibilities are X is preferred to Y , Y is preferred to X or X and Y are equally preferred, In indifference curve analysis, this is known as the.

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Comparability assumption

Transitivity assumption

Non seriation assumption

Reflexivity assumption

The matrix A multiplies by its inverse will b e a.

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Identity matrix

Skew symmetric matrix

Idempotent matrix

Adjoin of a matrix

Globalization is made more difficult by

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The actions of the World Trade Organization

The removal of protectionist measures

Exchange rate instability

More free trade agreements

Objectivity means basing conclusion on facts wit out any

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Bias and value prediction

Bias and value judgment

Verifiability and value judgment

Prediction

A reflationary policy

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Increases aggregate supply

Increases aggregate demand

Decreases the price level

Increase full employment

The contractionary effect on private investment spending due to financing requirements of government deficit pushing up interest rates is known by this term.

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Crowding out

Recognition lag

Public sector borrowing requirement

Fiscal drag

Labour has the following characteristics accept one.

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It cannot be separated form labourer

It cannot be stored

Its supply cannot be increase at once

Bargaining power of laborer is very strong

The marginal rate of substitution for two goods can be obtained from

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The slope of the demand curve

The slope of the indifference curve

The ration of first derivative of the total utility functions

B and D both

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

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

Employment tends to _______ whwn aggregate output.

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rise, falls

rise ; rises

falls; rises

Not change ; falls

Local correspondent's method can be applied only where a high degree of precision is not.

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Case

Necessary

Interview

Nalied

Market some times fall to exist because of.

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Externalities

the free rider problem

Poor transport

a an b

Research design indicate a plan of action to be carried out in connection with a proposed.

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Research proposal

Research methodology

Research abstract

Research work

A rise in the exchange rate value of the rupee will most likely cause.

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A dollar to be worth less in learns of other currencies.

Imports to decrease

Exports to increase

The balance of payments curve to shift to the left

The equilibrium level of employment achieved after the complete adjustment of wages and prices, is known as the.

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Zero unemployment level of employment

Natural state

Invisible handshake

Full employment level of employment

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