Question # 1

The multiplier is calculated as.

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1(1-MPC)

1/MPS

1/MPC

a or b

The value of an asset depends upon

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Its scrap value

Its depreciation

The present value of the failure stream of income it can earn.

the cost of loans

An advocate of the classical model of the economy would claim that unemployment a created when the ___________ is above its equilibrium level in the.

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Price level, agregate economy

Tax rate, government ebudget

Wage rate, labour market

Interest rate, market for loanable funds

Market failure may arise because of.

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Imperfect competition

Taxation

Externalities

All of the above

Real GNP is a crude measure of national welfare because it excludes.

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Consumption

Investment

Export's

work in the home

The retail price index is used to.

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Construct price lists

Compare shop prices

Measure changes in the cost of living

None of the above

Output fell sharply in the transition economies because.

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Banks were undoable to function

There was little corporate control

Vital infrastructure was missing

All of the above

For a competitive firm its short run supply curve is ________ and its long run supply curve is.

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SMC , LMC

SMC above SAVC, LMC above LAC

SMC below SAVC, LMC above LAC

SMC Below SAVC, LMC below LAC

The extra utility from consuming one more unit of a good is called.

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Marginal utility

Additional utility

surplus utility

Bonus utility

A tariff causes domestic firms to __________ and consumers to

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Overproduced, under consume

overproduce , overconsume

Underproduce, under consume

underproduce, overconsume

In an open economy leakages to imports ______ the value of the multiplier.

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Reduce

Increase

do not change

None of these

Economic growth may depend upon __________ and_________

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Population size , x -efficiency

Population age distribution, education

Population growth, education

Population growth, technical progress

The prisoners Dilemma Game demonstrates that.

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Players are better off to act independently

Monopoly is better than competition

People will always cheat

Players are better off if they con operate

A market can accuretaly be described as

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A place to buy things

a place to sell things

The process by which prices adjust to reconcile the allocation of resources

a place where buyers and sellers meet.

Fiscal policy is weak under floating exchange rates as fiscal expansion.

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Crowds out imports

Crowds out public consumption

Crowds out exports

Reduces the budget deficit

The AD schedule indicates that______ inflation is associated with______ output.

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higher , lower

Higher , higher

Lower , lower

zero ,zero

The real value can be derived from a nominal value by

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Adjusting changes over time

Adjusting for data collection errors

Adjusting for population changes

Adjusting for changes in prices

A natural monopoly has a declining ________ over a large range of output.

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Long run marginal cost

Short run marginal cost

Long run average cost

Long run marginal cost

When real income increases, other things equal we fan expect the demand for real money holdings to.

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Fall

Not change

Increase

Decrease

The business cycle is not transmitted from one country to another through.

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Private sector imports and exports

Economic policy

The duration of compulsory education

Labour supply changes

If the diagram of a line shows that lower values on the vertical scale are associated with higher values on the horizontal scale this is an example of.

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a nonlinear relationship

A positive linear relationship

A scatter diagram

A negative linear relationship

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