Question # 1

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

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Panel b

Panel c

Panel a

Panel d

Identify the three motives of money demand.

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Accumulative

Speculative precautionary

Speculative transaction precautionary

Precautionary special trisection

Firms hire labor at the point where the

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Nominal wage rate equals the marginal product of labor

Real wage rate equals the marginal revenue product of capital

Nominal wage rate equals the marginal revenue product of labor

Real wage rate equals the marginal revenue product of capital

What is the characteristic of the sample which is selected randomly.

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It is not average of the whole

It would be representative

It would not be equal to the population

All of the above

If the price is less than the average cost but higher than the average variable costs.

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The firm is making a loss and will should own in the short term.

The firm is making a profit.

The firm is making a loss but will continue to produce in the short term

The firm is making a loss and is making a negative contribution to fixed costs

The movement of disguised unemployment is.

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integrating factor

Social factor

push and pull factor

All of these

An autonomous rise in __________ note causes by a change in the price level aggregate output of the interest shifts the _________ curve to the

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Net exports LM right

Net exports LM left

Money demand IS right

Money demand LM left

A monopolistically competitive firm differs from a perfectly competitive firming that unlike the perfectly competitive firm it.

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Faces a downward sloping demand curve

Can change the characteristics of its product.

Can vary the price of its product.

All of the above

The total utility of the third unit of product x is.

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10

5

23

38

Finding a partner to work with abroad is called a.

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Takeover

Merger

Acquisition

Joint venture

A firm charges Rs. 800 for its unique word processor. If total revenue is Rs. 56,000 in July, how many word processor were sold that month.

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70

95

700

800

While resources and products flow in one direction of the circular flow model what flow the other direction.

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Services

Public goods

Money

Imported goods

In 1950's liberal policy was adopted regarding.

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Export

Imports

Both

Non

Currency speculations is_________ if speculators bet against market forces that cause exchange functions, thus moderating such fluclutions.

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Destabilizing

Stabilizing

Inflationary

Deflationary

As long as the principle of diminishing marginal utility is operating any increased consumption of good.

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Lowers total utility

Produces negative total utility

Lower marginal utility and therefore total utility

Lowers marginal utility, but may raise total utility.

Aggregate demand in an economy trading internationally with a government sector can be written s.

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AD = C+1

AD = C + 1+ G

AD = C +1+G+X+Z

AD+C+1+G+X-Z

An increase in price all other things unchanged leads to.

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A shift in supply out wards

A shift in supply in wards

A contraction of supply

An extension of supply

When all of the debit or credit items in the balance of payments are combined

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Merchandise imports equal merchandise exports

Capital imports equal capital exports

Services exports equal service imports

the total surplus or deficit equals zero

When GNP is Rs.500 billion and consumption expenditures are Rs.300 billion.

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the MPC is 6

The MPS is 4

The Multiplier is 2.5

None of the above

Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are.

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Market prices

Sticky prices

Fixed prices

Regulatory prices

In singular sense 'Statistics' is considered as.

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Statistical data

Statistical methods

Both a a and b

None of these

Which trade theory contends that a country that initially develops and exports a new product may eventually become an importer of it and may no lorger manufacture the product.

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Theory of factor endearments

Theory of overlapping demands

Economies of scale theory

Product life cycle theory.

The% change in quantity demanded due to % change in incomes.

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Price elasticity

Prices cross elasticity

Income elasticity

All of these

In the home country government grants a subsidy of a domestically produced good domestic producers tend to.

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Capture the entire subsidy in the form of higher profits

Increase their level of production

Reduce wages paid to domestic workers

Consider the subsidy as an increase in production cost

Which of the following is not a macro economic issue.

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Unempolyment

Inflaction

The wages paid to footballers

Economic growth

A disadvantage of the barter system is that

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No trade occurs

People must produce all their own food clothing and shelter

The opportunity to specialize is greatly reduced.

Gold is the only unit of account

Ad valorem tariffs are collected as

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Fixed amounts of money per unit traded

A percentage of the price of the product

A percentage of the quantity of imports

All of the above

When total utility becomes maximum then marginal utility will be.

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Minimum

Average

Zero

Negative

If there is a financial panic and increased uncertainty about the return in the stock market and bond market what is the likely effect on money demand.

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Money demand declines first then rises when inflation increases

Money demand rises

The overall effect its ambiguous

Money demand declines

According to the quantity theory of money an increase in the money supply is most likely to lead ot inflation if

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The velocity of circulation decreases

The number of transactions decreases

There is deflation

The velocity of circulation and the number of transactions is constant

Bank and other corporations were nationalized by

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Z.A. Bhutto

Nawaz sharif

Zia ul Haq

None of these

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