Question # 1

A nation wishing to reduce its current account deficit would be advised to.

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Engage in more government spending.

Reduce government taxes

Increase private investment spending

Decrease domestic consumption spending

Which kind economics deals with issues such as unemployment inflation, and economic growth.

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Macro economics

Micro economics

Growth economics

Political economics

Devaluation of rupee would result into

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Expensive exports

Expensive imports

Expensive labour

Overvalues Rupee

the Zarai Taraqiati Bank Limited is the largest public sector financial development institution Pakistan it was founded in.

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1960

1961

1962

1963

In long run a reduction in labor supply would cause output to __ and the aggregate price level to.

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fall ; rise

fall ; fall

rise ; fall

rise ; rise

Through the world government tend o auction quota license to their highest bidder.

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Always

Often

Seldom

Never

A _________ is a regional trading block in which member countries eliminate intercanal trade barriers but maintain existing barriers against countries that are not members.

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Free trade area

Customs union

Common market

Monetary union

The "balance trade" is a record of.

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Exports and imports of financial assets

The current account plus capital account

The export of goods and services.

the value of merchandise exports minus imports

Equilibrium price is a price at which

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Quantity demanded is equal to quantity suppled

Quantity demanded minus quantity supplied is zero

quantity demanded = quantity supplied

All of these

If the Central Bank wanted to decrease the quantity of money held by the public it would.

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Sell government securities

Buy government securities

Lower the legal reserve requirement

Raise taxes

A production function for a firm which produces a product with two or more inputs.

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Represents a physical relationship between outputs for a specified set of inputs

Indicates the least cost combinations of inputs for a given output

Relates revenues and costs

Indicates the dollar cost for each level of ouput.

The government performs its redistribution function mainly through.

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Trade practice legislation against anticipative behavior

The provision of public goods

Taxes and transfer payments

Tariffs on imports

In the circular flow diagram firms.

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Receive revenue and supply resources in the resource market

Incur costs and demand resources in the resource market.

Receive revenue and demand resources in the product market.

Incur costs and supply goods and services in the product market.

International difference in opportunity costs lead to countries acquiring.

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Comparative advantage

High exchange rates

Trade exchange rates

Trade barriers

An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.

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Revenue from value added tax

Level of company profits

Level of unemployment

Average level of wages

The conjecture that inequality first increases with development then decreases with further development has been

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Strongly supported by most studies

Supported mainly by cross section not time series studies.

Supported mainly by time sereis not cross section studies

Generally repudiated by empirical studies.

The regression results indicate that the standard error of estimate is.

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135.94

16.06

28.98

4.27

Projects A,B,C,D,E cost Rs. 100, Rs, 200, Rs. 300, Rs. 400, and Rs. 500 with MEC's of 0.07, 0.06,0.09 ,0.10 and 0.11 respectively. The market rate of interest is 8% Total investment spending is

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Rs. 1500

Rs.1300

Rs.1200

Rs.300

Keynes and Say's macroeconomic theory of employment were diametrically opposed Say state that.

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Supply creates demand

Demand creates supply

Unemployment is a most likely state of affairs

Full employment can only be achieved by government interference.

If the intercept of the consumption function is 75, and MPS is 0.10 the value of consumption expenditures at Yd = Rs. 5,000 is

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Rs.4,500

Rs. 575

Rs.500

Rs. 4,575

The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve.

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At their lowest points

When they are declining

When they are increasing.

When marginal revenue is zero

Which of the following taxes is regressive

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The federal income tax

The state income tax

The sales tax

The Medicare tax

Quotas are government imposed limits on the ________ of goods trade between countries.

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Prices

Quantity

Revenue

Costs

The equation for a givne production function is Q = K2 + KL, initially K = 2 and L = 1 if the value of both inputs is doubted the production function exhibite.

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Increasing returns to scale

Diseconomies of scale

Constant returns to scale

Economies of scale

In a typical cartel agreement the cartel maximizes profit when it.

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Behaves like a monopoly

Behaves like a perfectly competitive firm

Behaves like a duopoly

Is flexible in enforcing production targets

In the short term a firm will produce provided the revenue

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Covers fixed costs

Covers variable costs

Covers total costs

Covers revenue

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.

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

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To eliminate seignior age

To allow open market operations

To enhance the credibility of monetary policy.

None of the above

Extension and contraction of demand mean

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Movement on the same demand curve

Movement to high demand curve

Movement to lower demand curve

Movement to another demand curve

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

All of the following are credit items in the balance of payments except.

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Investment inflows

Merchandise exports

Payment for American service's to foreigners

Private give to foreign residents

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