Question # 1

Monetary expansion can still be effective in getting out of liquidity trap if it's combined with.

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Restrictions on bank loans

Increased taxes

Contractionary fiscal policy

Expansionary fiscal policy

If the MPC is 0.5 the multiplier is

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2

1/2

0.2

20

An upward shift in marginal cost ___________ output and an upward shift in _____ marginal revenue __ output.

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Reduce , reduce

Reduce , increase

Increased, increased

Increases, reduces

Which of the following is not an element of the redistribution with growth policy approach.

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Minimum wage legislation

Land refrom

Progressive taxation

Increased access to education

Short run average total costs are equal to the sum of _______ and______

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Short run opportunity costs, profit

Short run average variable costs, profit

short run average variable costs, profit.

Short run average variable costs short run average fixed costs

Money or paper currency serves at least _______ functions.

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Three

Four

Five

Seven

Food crops cover about __________ of cropped areas

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75%

85%

15%

35%

The quantity of money demanded varies.

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Directly with both prices and output

Inversely with both prices and output

Directly with prices and inversely with output

Inversely with prices and directly with output

A change in autonomous spending is represented by.

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A movement along a spending line

A shift of a spending line

A change in a behavioral coefficient.

None of these

Small nations whose trade and financial relationships are mainly with a single partner tend to utilize.

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Pegged exchange rates

Freely floating exchanged rates

Managed floating exchange rates

Crewing exchange rates.

The business cycle is not transmitted from one country to another through.

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Private sector imports and exports

Economic policy

The duration of compulsory education

Labour supply changes

In Production of goods and services tradeoffs exist becasue.

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Buyers and sellers often negotiate prices

Society has only a limited amount of productive resources

Not all production is efficient

Human wants and needs are limited at a particular point in time

The yield curve shows

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The yields on stocks of different maturities

The interest rates on bonds of different maturities.

The yields on stocks with differing default risk

The yields on bonds with differing default risk

A Rs.10 increase in autonomous investment spending shifts IS

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Rightward by Rs.10

Leftward Rs.10

Rightward by Ke (Rs.10)

Leftward by Ke (Rs.10)

An increase in the discount rate at the FED generally has the following effect on bond prices.

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There is no demonstrated effect

Such an increase tends to lower bond prices.

Such an increase tends to raise bond prices

Bond prices are related to the government purchase and sale of bonds.

The quantity theory of money says that changes in ______ lead to equivalent changes in ______ but have no effect on.

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Prices, wages, output and employment.

Output, prices, employment

Nominal money, the price level output and employment.

Nominal money output prices

The function of money do not include.

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an exchange of purchasing power

A unit of account

A medium of exchange

A store of value

Which stage guides from the planning stage to the stag of drawing of final conclusions.

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Numerical facts

Statistical methods

Data

None of the above

If input price adjusted very slowly to output prices, the Phillip's curve would be.

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Downward sloping

Vertical or nearly vertical

Upward sloping

Horizontal or nearly horizontal

In market economics the incentive that draws entrepreneurs into industry is.

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Government bonuses for meeting production quotas

Profit

Government assumption of the risk of failure

Government assistance with making output and pricing decisions

If a good is normal then the demand curve for that good must be.

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Downward sloping

Upward sloping

Perfectly elastic

Completely inelastic

If both supply and demand for a good increase at the same time which of the following must also increase

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The equilibrium price

The use of substitutes

The equilibrium quantity

All of the above

Similar to import tariffs, import quotas tend to result in.

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Higher prices and reduced imports

Increasesed government revenue

Increased consumer surplus

Decrease producer surplus

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

The equation for the LM curve is.

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Y = 100 -50 i

Y = 50 + 50 i

Y = 50 - 80 i

Y = 80 + 50 i

When we refer to the hidden economy we mean unrecorded income owing to.

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Tax evasion

Poor statistics

The lags between statistical collection and publication .

Smuggling

An increase in the quantity of money supplied shifts the money supply curve to the_______ and the equilibrium interest rate

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right ; falls

right ; rises

left ; falls

left ; rises

If injection are less than with drawls at the full employment level of national income there is.

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an inflationary gap

Equilibrium

A deflationary gap

Hyperinflation

Which of the following measures is the best measure of money as a medium of exchange.

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M1

M2

M3

None of the above

Who among the following is a pantheist

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Warwick fox

Spinoza

Kant

None of these

Normal profit occurs when

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Average revenue equals average variable cost

Marginal revenue equals marginal cost

Average revenue equals marginal cost

Average revenue equals average cost

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