Question # 1

A decrease iin money demand other thing equal shifts the _____ curve to the

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IS ; right

Is ; Left

LM ; Left

LM ; Rfight

The concept of a jus pric that condemned market forces for yielding unjust results was developed in the writings of.

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Antoine Augustin coumot

Febius Maximus

Karl Marx

Thomas Aquinas

In perfect price discrimination

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Consumer surplus is maximized

Produce surplus is zero

Community surplus is maximized

Consumer surplus is zero

If firm earn normal profits.

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They will aim to leave the industry

Other firms will join the industry

The revenue equals total costs

No profit is made in accounting terms

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.

When supply increases in an agricultural market famer's earnings might fall because.

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Supply is price elastic

Demand is price inelastic

the government buys up all the excess production

All output must be sold at a maximum price

Using the Keynesian model the effect of an increase in the effective tax rate on capital would be to cause _________ in the real interest rate and ______ in output in the short run.

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A decrease ; a decrease

A decrease ; no change

No change ; a decrease

An increase ; an increase

If two sets contain the same distinct elements, then they are called.

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Equal sets

Unequal sets

Equivalent sets

All of the above

What is the possible cause for a falling real GNP over a period of time.

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A general fall in the value of output though changes in quantities producted.

A general increase in prices

An increase in the value of output produced and a general increase in prices

A, B and C

A tariff can ___________ raise a country's welfare

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Never

Sometimes

always

None of the above

If sales are forecasted using an adaptive expectations model where the coefficient of adjustment .2, the sales forecast for 1986 is.

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Rs.260

Rs.244.4

Rs.3.6

Rs.283.6

Under the constitution of Pakistan National Finance Commission distribute the amount from Federal taxes to provinces on the basis of.

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Equality

Area

population

Natural Resources

Export led growth strategies tend to emphasize.

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Resource allocation based on the principle of absolute advantage.

Resource allocation based on the principle of comparative advantage.

Trade protection for exporting competing firms

Trade protection for import competing firms

The search for answers to research questions is called collection of

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Facts

Evidences

Data

Reasons

Companies in the private sector are owned by

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The government

Shareholders

Employees

The community

Saving means

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Part of income for investment

Income for boarding

Non consumption of income in the current period

None of the above

If the home country government grants a subsidy on a domestically produced good domestic producers lend to.

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Capture the entire subsidy in the form of higher profits

Increases their level of production

Reduce wages paid to domestic workers

Consider the subsidy as an increase in production cost

Un employment Rate is a percentage relation with reference to.

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Total population

Civilian Labour force

employed persons

Unemployed persons

Capitalism refers to

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the use of markets

Government ownership fo capital goods

Private ownership of capital goods

Private ownership of homes and cars

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

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Purchases ; decreases

sales ; increases

purchases ; increases

sales ; decreases

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

A temporary adverse productivity shock would.

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Shift the labor supply curve upward

Decrease the level of employment

Decrease future income

Decrease the expected future marginal product of capital

Increases in government spending increase interest rates and aggregate output in the ISLM framework this is a ____ shift of the _____ curve.

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Left ward ; LM

Right ; LM

Left ward ; IS

Left ward ; AD

When the export function is Rs.100-0.2 Y , net exports are 0 when income is .

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Rs.300

Rs.400

Rs.500

Rs.600

The long run foreign exchange rate between the U.S. and Japan is 200 Yen =Rs. 1 under a floating exchange rate Which of the following does 112 t occur if the Federal Reserve reduce the money supply in order to prevent the occurrence of inflation.

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Foreign capital flows to the U.S.

The U.S. dollar appreciates

Real net exports decline

American real GNP experience a slower rate of growth

An entrepreneur who collects profits in the short run for a new invention is collecting.

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The competitive rate of return on capital

Temporary monopoly profit

Rent

A Ramsey surplus

Investment depend mainly on.

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Past levels of income

Future expected profits

Present national income levels

Historic data

International specialization takes place because of.

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Differences in technology

Differences in factor endowments

Scale economies

All of the above

The firms average variable cost of the 150th unit is.

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Rs.15

Rs.17

Rs.20

Rs.9

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.

Union of A and the universal set is

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A

A'

Universal set

None of these

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