Question # 1

In closed economic model aggregate demand is not sensitive to.

Choose an answer

Interest rates

Exchange rates

Price level

Tax policy

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

Choose an answer

Rs.4,500

Rs. 575

Rs.500

Rs. 4,575

The IS curve shows the combinations of output and the real interest rate for which.

Choose an answer

The goods market is in equilibrium

The labor market is in equilibrium.

The financial assets market is in equilibrium

An increase in output will cause the market clearing interest rate to be bid up.

A nation experience external balance if it achieves.

Choose an answer

No net changes in its international gold stocks

Productivity levels equal to those of its trading partners

An increases in its money supply equal to increases overseas

Equilibrium in its balance of payments

Classical economics believe that in the short run.

Choose an answer

Money neutrality exists and prices adjust rapidly

Money neutrality does not exist and prices adjust rapidly

Money neutrality exists and prices do not adjust rapidly.

A decrease in the effective tax rate on capital would cause the IS curve to.

Choose an answer

Shift up and to the right

shift down and to the left

Remain unchanged

Remain unchanged if taxes are fully deducible from income otherwise, shift up and to the right

An efficient economy is an economy

Choose an answer

In which output is steady or growing and there is low inflation

That produces what consumers demand and does so at the least possible cost.

that distributes output equally among all consumers

In which there is a fair distribution of wealth.

Suppose nominal GNP is Rs.500 in year 1, the base year If the GNP deflator doubles by year 6 while real output has increased 40% nominal output in year 6 equals.

Choose an answer

Rs.2000

Rs.1400

Rs.1000

Rs.750

Fiscal policy output to change demand for output is.

Choose an answer

Completely effective in region KL

Partially effective in region JK

Elasticity is infinite for region LT

Completely ineffective in region LT

The equilibrium level of income of the open economic model is.

Choose an answer

200

400

300

500

The short run impact of unanticipated expansionary monetary policy is that.

Choose an answer

Real output decrease

Employment decreases

Real interest rates decrease

Profit margins decrease

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

Choose an answer

Rs.90

Rs.400

Rs.500

Rs.900

If an individual has a money income M of Rs. 999 , the price of X is rs.7.00 per unit and ithe price of Y is Rs. 300 per unit find the equation for the budget lines.

Choose an answer

Y = 333 - (7/3) x

Y = 142 - (7/3) x

Y = 142- (3/7) x

Y = 323 - (7/3) x

According to classical economists the economy.

Choose an answer

Requires fine tuning to reach full employment

Should not be left to market forces

Will never be at full employment

Is self correction

The aggregate supply of labor is the

Choose an answer

Total amount of time a person works over his or her lifetime

Total amount of time a person spend in the labor force over his or her life time

Unemployment rate

Sum of the labor supplied by everyone in the economy

The long term demand for real money balance will rise when

Choose an answer

the income elasticity of the demand for money is less than unity.

There is a long term increase in the price level

There is a relative increase in the stock of government securities.

Long term market interest rates are falling.

If the foreign interest rate is 12% while the domestic interest rate in 95 then the forward premium will be.

Choose an answer

1.3 %

12%

9%

3%

In the long run, an increase in productivity would cause output to _________ and the aggregate price level to

Choose an answer

fall ; rise

fall ; fall

rise ; fall

rise ; rise

Net National product equals.

Choose an answer

Gross national product minus indirect business taxes

Gross national product minus depreciation

National income minus indirect business taxes

National income pluses depreciation

If the federal reserve whishes to increase the money supply, it should

Choose an answer

Raise the reserve requirement

Raise the discount rate

Buy Treasury securities in the open the market

All of the above

The efficiency wage model can be modified to allow real wages to vary over the business cycle by assuming that.

Choose an answer

Workers effort may depend on the unemployment rate and the real wage

During a recession labor supply will decrease reducing the efficiency wage

During a recession productivity wil fall causing a reduction in the efficiency wage

During a boom labor demand will increase, causing the efficiency wage to rise

More Classes

Other Links

PPSC Economics Chapter 3 Macro Economics MCQs With Answers

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer