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Online Tests
PPSC Economics Chapter 3 Macro Economics MCQs With Answers
Question # 1
Which market adjusts the quickest in response to shocks to the economy.
Choose an answer
The asset market
The labor market
The goods market
In the macro economy
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Question # 2
The short run aggregate supply curve the absence of misperceptions.
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Is vertical
Slopes upward
Is horizontal
Slopes downward
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Question # 3
In which of the following situations will an increase in the money supply have no effect upon equilibrium income.
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LM is steeply sloped and IS is relatively flat
LM is vertical and IS si steeply sloped
LM is steeply sloped and IS is vertical
LM is relatively flat as is IS
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Question # 4
Which of the following represents monetary policy geared to increases the supply of money.
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The purchase of bonds by the Federal Reserve Bank
The sale of bonds by the Central Bank
An increase in reserve requirement
A decrease in taxes
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Question # 5
An invention that speeds up the internet is an example of.
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An income effect
An increase in labor
A substitution effect
A supply shock
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Question # 6
Full- employment output is the level of output that firms in the economy supply when
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Taxes are zero
Wages and prices have fully adjusted
The unemployment rate in zero
All capital is fully utilized
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Question # 7
Over a two year period your income has increased 10% At the same time the consumer price index has increased 205 Your real purchasing power is.
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92% of the original value
50% of its original value
Not affected by the price change
109% of its original value
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Question # 8
The fraction of additional current income that a person consumes in the current period is known as the
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Consumption smoothing motive
Consumption deficit
Saving rate
marginal propensity to consume
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Question # 9
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.
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Question # 10
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
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Question # 11
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
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Question # 12
A variable whose value is determined witching an economic theory or model is.
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Exogenous
Independent
Deterministic
Endogenous
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Question # 13
The term household production refers to
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Output produced by forcing children to work
Output produced by workers who are telecommuting
Services provided directly to households such as lawn mowing by landscape companies.
Output produced at home
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Question # 14
A change that increase real money demand relative to the real money supply 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
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Question # 15
When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the long run aggregate supply curve.
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slopes upward
Sloped downward
Is vertical
Is horizontal
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Question # 16
An economy is in inflationary equilibrium A sustained increase in government appending shifts.
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DAD rightward for one period
DAD and DAS right ward permanently
DAD right ward and a new equilibrium
DAD right ward and a new equilibrium.
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Question # 17
When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, which of the following curves slopes downward.
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SRAS
AD
LRAS
None of the above
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Question # 18
Which of the following will cause a monetary induced change versus a fiscal induced change in equilibrium income as determined.by IS - LM analysis.
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A shift in the consumption function
A shift in government expenditures
A change in liquidity preference
A change in a government expenditures
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Question # 19
A technological improvement will
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Increases the desired capital stock
Decrease the desired capital stock
Have no effect on the desired capital stock
Have the same effect on the desired capital stock as an increase in corporate taxes.
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Question # 20
Peaks and trough of the business cycle are known collectively as.
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Volatility
Turning points
Equilibrium point
Real business cycle events
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Question # 21
The dynamic aggregate demand schedule shifts rightward when there is an increase in.
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The expected rate of inflation ceteris paribus
The growth rate of the nominal money supply ceteris paribus
The income tax rate ceteris paribus
the current inflation rate celeries paribus
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