Question # 1

Currency speculations is_________ if speculators bet against market forces that cause exchange functions, thus moderating such fluclutions.

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Destabilizing

Stabilizing

Inflationary

Deflationary

The central bank of a country plays a significant role in her macroeconomics performance by regulating the.

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Money supply

Supply credit

Interest rate

All of these

The agricultural price support program is an example of.

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A price celling

A price floor

Equilibrium pricing

None of these

According to factor price equalization theorem the ______ factor should oppose free trade policies in any given country.

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Abundant

Scarce

Neither

Can't tell without more information

The production function will be affected by changes in the prices of.

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Inputs

Outputs

Neither

All of the above

If a country an imposes an import tariff its welfare can improve if

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The country is a small country's than a larger country.

Its terms of trade improve enough

The tariff enhances the welfare of its trading partners

Its government's tax revenue increase because of the tariff

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

Which trade theory contents that a country that initially develops and exports a new product may eventually become an importer of if ,a nd may no longer manufacture the product.

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Theory of factor endowments

Theory of overlapping demands

Economies of scale theory

Product life cycle theory.

If the % change in quantity demanded is more than % change in price coefficient of price elasticity is.

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>1

<1

=1

=zero

Compared to the case of perfect competition.

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Monopolist is more likely to

Charge a higher price

Produce a lower quantity of the product

All of the above

All economic model ae based on

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Realistic assumptions

Assumptions which can never be perfectly realistic

Unrealistic assumptions

None of the above

A purely monetary explanation of the business cycle is proposed by

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Hawtrey

Schumpeter

Hansen

None of these

Health of a country's economy is indicated by

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Number of doctors per 1,000 population

Per capital income

Literacy rate

None of the above

In oligopoly market seller are.

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Few

Four

Some

A large number

Productivity can grow.

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If capital per hour of labor increases.

If there are no technological advances.

If capital per hour of labor decreases

If real GDP per hour labor decrease and capital per hour of labor increases.

In the home country government grants a subsidy of a domestically produced good domestic producers tend to.

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Capture the entire subsidy in the form of higher profits

Increase their level of production

Reduce wages paid to domestic workers

Consider the subsidy as an increase in production cost

Import substitution is an example of.

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The principle of comparative advantage

The principle of absolute advantage

An outward looking growth strategy

An inward looking growth strategy

Expansion in money supply stems from.

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Increasing the cost of bank credit

Reducing availability of bank credit

Reducing the financial cost of bank credit

None of above

The warfare effect of a quota depend to a considerable extent upon.

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Who has the quota license

The size of the quota

Elasticities of domestic demand and supply

All of the above

All economic model ae based on

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Realistic assumptions

Assumptions which can never be perfectly realistic

Unrealistic assumptions

None of the above

A change in the full employment quantity of labor_________ the short run aggregate supply curve and ______ the long run aggregate supply curve.

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shifts ; shifts

shifts ; does not shift

does not shift ; shift

does not shift ; does not shift

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