Question # 1

The law of demand states that

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As the quantity demanded rises, the price rises

As the price rustiest he quantity demined rises

As the price rises, the quantity demanded falls

As supply rise, the demand rises

A decrease in lump sum taxes is an examples of.

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Contractionary fiscal policy

Expansionary fiscal policy

A change in induced taxes

A and c

According the Keynes when the great depression started , the government should have.

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Done nothing

Decreased the money supply

Had a large increase in government spending.

Enacted high tariffs, such as the smoot Hawley tariff

A politician proposes reducing business taxes, a move she says will encourage risk taking entrepreneurship This proposed cut in business taxes is intended to stimulate the economy mainly though.

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An increase in aggregate supply

A decrease in aggregate supply

A decrease in aggregate demand

An increase in aggregate demand

The effect of the most favored nation clause is to

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Eliminate at tariffs between countries.

Increase all tariff rates between countries

Maintain a nondiscriminatory structure of tariffs

Marlein a discriminatory structure of tariffs.

The overall Budget Deficit is financed from

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External borrowing

Non bank borrowing domestically

Bank borrowing plus the above two at a and b

None of the above

If tastes are identical between countries than comparative advantage is determined by

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Supply conditions only

Demand conditions only

Supply and demand conditions

Can't tell without more information.

During the last eight years the per capita income in Pakistan has been

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Increasing substantially because of decline in population growth

Decreasing

increasing only marginally

Constant

If the Federal Reserve wishes to increase the money supply it should.

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Raise the reserve requirement

Raise the discount rate

Buy Treasury securities in the open market

All of the above

Price controls are

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Necessary for consumer's welfares

A must to check inflation

Doomed to fall

None of these

If a country has linear production possibilities frontier than production is said to be subject to.

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constant opportunity costs

Decreasing opportunity costs

First increasing and the decreasing opportunity costs

Increasing opportunity costs.

Public utilities tend to be

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Inefficient

Natural monopolies

subject to increasing costs

None of these

A tax of 20 cents per unit of imported cheese would be an example of a

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Compound tariff

Effective traiff

Ad valorem tariff

Specific tariff

A straight line downward sloping demand curve implies that as price falls the elasticity of demand.

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Increases

Decreases

Remain the same

None of these

Which of the following organization primely provides long term loans to developing countries to help them develop the infrastructure such as schools hospitals and roads.

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World Bank

International Monetary fund

Council on Foreign Relations

Organization of petroleum Exporting countries.

The impact and incidence of sales tax is

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On the consumer

On the seller

On the producer

None of these

Why is the law of diminishing marginal returns ture.

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Specialization and division of labor

Spreading the average fixed cost

Limited capital

All factors being variable in the long run

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

Most commonly referred indicator of inflation is

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Wholesale price index

Retail price index

Consumer price index

Sensitivity price index

A specification of a maximum amount of a foreign produced good that will be allowed to enter the country over a given time period is referred to as a

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Domestic subsidy

Export subsidy

Import quota

Export quota

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

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