Question # 1

In a simple Keynesian world assume the economy is opiating at a full employment noninflationary level worsening world conditions necessitate additional government spending of Rs.50 billion. What should be the direction of change in taxes and magnitude of change to maintain stable price and full employment equilibrium.

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Increase by Rs.50 billion

Increase by more than Rs. 50 billion

Increase by less than Rs.50 billion.

Decrease by more than Rs.50 billion.

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

The determinant of a matrix and that of its transpose are

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Equal

Zero

One

Negatively related

Which of the following is a NOT component of M-2.

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Small time deposited

Money market mutual funds

Stocks

Checkable deposits

If the price of automobiles were to increase substantially the demand curve for gasoline would most likely

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Shift leftward

Shift right ward

Become flatter

Become steeper

When investment spending is negatively related to the rate of interest, equilibrium income in the goods market.

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Is unrelated to the rate of interest

Is positively related to the rate or interest

Inversely related to the rate of interest

Falls as the rate of interest decreases

According to classical models the level of employment is determined primarily by

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Interest rates

The level of prices

The level of aggregate supply in the economy

The level of aggregate demand for goods and services

When planned consumption equals Rs. 40 + 0.90 Yd and planned investment is Rs.50, the equilibrium level of income is.

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Rs.90

Rs.400

Rs.500

Rs.900

Case study may be a source of hypothesis of.

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Future research

Research design

Content analysis

Intensive study

Which of the following factors will cause the demand curve for labor to shift to the right.

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The demand for the product produced by labor declines.

The prices of substitute imputes falls

The productivity of labor increases

None of the above

Who among the following is concerned with deep acology.

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Arne Naes

Warwick fox

Kant

None of these

In order of practice price discrimination which of the following is needed.

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Some degree of monopoly power

An ability to separate the market

An ability to prevent reselling

All of the above

Which market adjusts the quickest in response to shocks to the economy.

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The asset market

The labor market

The goods market

In the macro economy

Lower interest rates are likely to.

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Decrease consumption

Increase cost of borrowing

Encourage saving

Increase spending

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

When planned saving equals Rs.40+0.20 Yd and planned investment is rs. 60, the equilibrium level of income in.

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Rs. 100

Rs. 400

Rs.500

Rs.1000

The movement to free international trade is most likely to generate short term unemployment in which industries'.

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Industries in which there are neither imports nor exports

Import competing industries.

Industries that sell to domestic and foreign buyers

Industries that sell to only foreign buyers

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

The rate of inflation in 1985 was

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3.67%

8.5%

9.77%

3.2%

An allocation is Pareto efficient if no reallocation of resources would make some people_______ whiteout making others

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Worse off, worse off

better off, better off

better off, worse off

equal , unequal

The gain from international trade are closely related to.

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the labor theory of value

How much the autarky price differs from international terms of trade change.

The fact that a country must lose from trade

All of the above

R.M. Solow in his model assumes that the prices and wages are.

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Flexible

Non flexible

Rigid

None of these

Which of the following is a possible government objective as opposed to a policy.

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Lower interest rates

Lower taxation rates

Lower government spending

Lower inflection

A decrease in the quantity of money supplied shifts the money supply curve to the________ and the equilibrium interest rate

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right ; fall

right ; rises

left ; falls

left ; rises

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

Exchange rate overshooting often occur because.

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Domestic prices adjust slowly to shifts in demand

Military spending increases during military's confects

Elasticities are smaller in the long run than the short run

Elasticities are smaller in the short run than the long run.

Classical economics think general equilibrium is attained relatively quickly because.

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The real interest rate adjusts quickly

The level of output adjusts quickly.

The real wage rate adjusts quickly

The price level adjusts quickly.

Which of the following methods is used for internalizaing positive externalities

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Positive taxes

Government exchange of property rights

Effluent fees

Corrective substidies

The IMF gives

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Short term credits

Short term and long term creditors

Both long term credits

None of these

With fixed exchange rates and no private currency flow, when the central bank buys domestic currency the domestic money supply is.

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Increased

Unaffected

Reduced

All of the above

Believers in the monetarist rule assert that

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Lags are long and variable

the economy cna be stabilized by automatic mechanisms

The central bank should keep the money supply growth constant

All of the above

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