Question # 1

The Root Mean square Error for the actual sales and sales forecast for 1985 and 1986 is.

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20.2

19.9

14.7

17.2

If the sampi is accepted as coming from a universe with a mean of Rs.500 or greater when if doesn't.

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A Type II error is made

A type I error is mad

The alternative hypothesis is correct.

A and C are correct

Where there is an equal increase in net tax revenue and government spending, ceteris paribus.

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(C+I+G) is shifting upward

(C+I+G) is shifting downward

(C+I+G) does not shift

All of these

Given the saving equation S = - 50 + 0, 20 Y, where s is saving and Y is income.

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The break even level of income is 240

Dissaving takes place if income is 300

Consumption expenditures and saving are equal at an income level of 500

The MPS is constant for all levels of income

To avoid double counting when the GNP is estimated, economists

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Price all goods and services bought and sold in all markets

Use the GNP deflator

Price only intermediate goods

Calculate value added at each stage of production.

The long run aggregate supply curve

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Is vertical

slopes upward

Is horizontal

Slopes downward

The costs of disinflation would be low if

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Expected inflation falls as inflation falls

Wages and price controls were used

The Phillips curve were nearly horizontal

The Phillips curve adjusted slowly to changes in inflation

When all markets in the economy are simultaneously in equilibrium we say.

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Markets are complete

Markets are perfect

There is disequilibrium

There is general equilibrium.

A change that increases the real money supply relative to real money demand causes.

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The LM curve to shift down and to the right.

The LM curve to shift up and to the left

The IS curve to shift down and to the left

The IS curve to shift up and to the right.

At point of satiety marginal utilityis.

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Positive

Negative

Maximum

Zero

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis which of the following curves is vertical.

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SRAS

AD

LRAS

None of the above

When aggregate economic activity is declining , the economy is said to be in.

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A contraction

An expansion

A trough

A turning point

To ensure that the fundamental identity of national income accounting holds changes in inventories are.

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Ignored

Counted as consumption

Treated as part of saving

Treated as part of expenditure

The long term demand for real money balance will rise when

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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.

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

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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

Peaks and trough of the business cycle are known collectively as.

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Volatility

Turning points

Equilibrium point

Real business cycle events

"Economics is what economists do " It has been supported by.

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Richard jones

Comte

Gunnar Myrdal

All of the above

The idea that the natural rate of unemployment rises when the acual rate of unemployment rise is known s.

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Stabilization

Insider outsider theory

Hysteresis

an efficiency wage model

Suppose your company is in equilibrium with its capital stock at the desired level A permanent decline in the expected real interest rate now has what effect on your desired capital stock

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Raises it because the future marginal productivity of capital is higher

Lowers it because the future marginal productivity of capital is lower

Raises it because the user cost of capital is now lower

Lowers it because the user cost of capital is now higher

Whose opinions have revolutionized the scope of macro economics.

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Adam Smith

J.B. Say

J.M. Keynes

All of the above

In the monetary base is increased by $1,000 and the reserve requirement is 10% by how much will the money supply be increased.

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$100

$1,000

$5,000

$10,000

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