Question # 1

In the Keynesian model in the short run a decrease in government purchases causes output to _____ and the real interest rate to.

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fall ; rise

fall ; fall

rise ; rise

rise; fall

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

Ineven A occurs the payoff will be Rs.5,670.00 . the probability of event A occurring is .87 What is the expected payoff of event A.

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Rs.5,670.00 9d)

Rs.4,832.10

Rs. 4,932.90

Rs.5000.00

An increase labor supply would cause the IS curve to.

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Shift up and to the right

Shift down and to the left

Remain unchanged

Shift up and to the right only if people face borrowing constraints

If the expected rate of inflation rose at the same time the natural rate of unemployment rose the Philips curve.

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would shift down

would shift up

Would not move

Might shift up or down or not move depending on which effect was larger.

In the expenditure approach to GDP which of the following would be excluded from measurement of GDP.

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Government payments for goods produced by foreign firms

Government payments for goods produced by firms owned by state of local governemnt

Government payments for welfare

All government payments are included in GDP

To ensure that the fundamental identity of national income accounting holds changes in inventories are.

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Ignored

Counted as consumption

Treated as part of saving

Treated as part of expenditure

The regression results indicate that the standard error of estimate is.

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135.94

16.06

28.98

4.27

The value of a household's assets minus the value of its liabilities is called.

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Income

Debt

Stock

Wealth

Which of the following changes shifts the long run aggregate supply curve to the right.

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A demographic change that increases the labor supply

A decrease in the demand for labor

An increase in consumer confidence

A decrease in taxes

A temporary decline in productivity would cause the IS curve to.

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Shift up and to the right

Shift down and to the left

Remain unchanged

Shift up and to right only if people face borrowing constraints

The reduction of the inflation rate is called

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Deflation

Disinflation

Inflation

Reflation

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.

A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the.

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Real interest rate

Productivity relation

Production function

Marginal product

An expenditure reducing policy would consist of a decrease in

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The par value of a currency

Government expenditures

Import duties

Business or household taxes

Which theory is generally included under micro economics.

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Price theory

Income theory

Employment theory

None of the above

If the reserve deposit ratio is 0.25 and the ratio of currency in circulation to deposits is 0.3, the potential money multiplier will have a value of.

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2.36

0.42

1.20

0.96

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.

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

The value of real GDP in the current year equals.

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The value of current year output in prices of the base year

The value of current year output in pries of the current year

The value of base year output in prices of the base year

The value of base year output in prices of the current year

Desired national saving would increase unambiguously if there were

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An increase in current output and expected future output

An increase in expected future output and government purchases

An increase in expected future output and the expected real interest rate

A fall in both government purchases and expected future output

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