Question # 1

Which of the followings is NOT component of M-2

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Small time deposits

Money market mutual funds

Stocks

Checkable deposits

Price controls are

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Necessary for consumer's welfares

A must to check inflation

Doomed to fall

None of these

The goal of a pure market economy is to best meet the desires of

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Consumers

Companies

Workers

The government

In a pure market economy which of the following is a function of the price.

i - provide information to sellers and buyers

ii- Provide incentives to sellers and buyers

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I only

ii Only

both i and ii

Neither i nor ii

Absolute advantage is determined by.,

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Actual difference in labor productivity between countries.

Relative difference in labor productivity between countries.

Both a and b

neither a and b

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

Which of the following is automatic stabilizer.

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Unemployment benefits

Spending on education

Defense spending

Net interest

Disposable incomes is equal to.

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National income Minus taxes

Real GDP

National income Minus taxes

National income Minus Taxes plus transfers

A firm can fund an investment from its own sources, the opportunity cost of its investment is

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Less than zero

Zero

More than zero

Neither

A market is in equilibrium when

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Ac = P

MC = MR

AC =AR

TC =TR

_________ are quotas that lead to a complete abolishment of trade.

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Embargoes

Voluntary export restraints

Nontariff beamers

Orderly marketing agreements

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

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

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

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

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.

In the balcne of payments, travel and tourism are included int he category of.

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Unilateral transfers

Capital account

Merchandise account

Services account

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% change in quantity demanded due to % change in incomes.

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Price elasticity

Prices cross elasticity

Income elasticity

All of these

Which of the following the most elastic demand the extra revenue a firm receives from the services of an additional unit of a factor of production.

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Total revenue

Marginal physical product

Marginal revenues product

Marginal revenue.

The largest trading partner of Pakistan is

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Italy

US

USA

None of these

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