Question # 1

Characteristics of economic laws are

Choose an answer

Mere statement of economic tenduencies

Less certain

Hypothetical

All of the above

Full- employment output is the level of output that firms in the economy supply when

Choose an answer

Taxes are zero

Wages and prices have fully adjusted

The unemployment rate in zero

All capital is fully utilized

Expansionary monetary policy

Choose an answer

Tends to lead to an appreciation of nation's currency

Usually has no effect on a currency's exchange value

Tends to lea dto a depreciation of the currencies of other nations

Tends to lead to a depreciation of a nation's currency.

Which of the following changes shifts the AD curve up and to the right.

Choose an answer

A rise in the nominal money supply

An increase in income taxes

An increase in the risk on nonmonetary assets

A decreasing the future marginal productivity of capital.

An increase in the expected real interest rate tends to.

Choose an answer

Raise desired saving only

Raise desired investment only

Raise both desired savings and desired investment

Raise desired savings, but lower desired investment.

In a mixed economy the economic decisions of what to produce how to produce, and who will receive products are made by

Choose an answer

The government

Consumers and firms

Banks and stock markets

Firms, consumers, and government.

Marginal utility is equal to average utility at that time when average utility is.

Choose an answer

Increasing

Maximum

Falling

Minimum

Which of the following macro economic variables doesn't vary much ove the seasons.

Choose an answer

The nominal money stock

The unemployment rate

The real wage

Average labor productivity

What is the average money balance according to the square root rute if income is Rs.1500, each transaction cost is Rs.4, and the opportunity cost of holding money is.2%

Choose an answer

387

50

175

203

The short run aggregate supply curve the absence of misperceptions.

Choose an answer

Is vertical

Slopes upward

Is horizontal

Slopes downward

In the Keynesian model in the long run a decrease in the money supply will cause ___ in the interest rate and _____ in the price level.

Choose an answer

An increase ; an increase

A decrease ; a decrees

No change ; an increase

No change ; a decrease

Firms hire labor at the point where the

Choose an answer

Nominal wage rate equals the marginal product of labor

Real wage rate equals the marginal revenue product of capital

Nominal wage rate equals the marginal revenue product of labor

Real wage rate equals the marginal revenue product of capital

Hyperinflation occurs when

Choose an answer

The inflation rate rises

The inflation Tate declines

The inflation rate is extremely high

The inflation rate is extremely low

The aggregate demand curve shows the combinations of output and the price level that put the economy on.

Choose an answer

The FE line and the IS curve

The FE line The IS curve and the LM curve

The IS curve

The IS curve and the LM curve

You are gold the level of savings in the economy is Rs.25 billion of equilibrium Using the consumption function C =20 + .9 Y, find equilibrium income .

Choose an answer

250

900

450

350

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

Choose an answer

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

According to Keynesian macro economics price adjust _____ to shocks, so the government should.

Choose an answer

Slowly ; do little

Rapidly ; do little

Rapidly ; fight recessions

Slowly ; fight recessions

The MPS = 0.4 and government spending increases by 20 billion. The LM curve

Choose an answer

Shifts to the right by 20 billion

Shifts to the right by 50 billion

Does not shift

shifts to the left by 30 billion

An expenditure increasing policy would consist of an increase in

Choose an answer

Import tariffs

Import quotas

Governmental taxes

The money supply

A beneficial supply shock would cause.

Choose an answer

A movement up the short run Phillips

a movement down the short run Phillips curve

The short run Phillips curve to shift upward and to the rights

The short run Phillips curve to shift down ward and to the left

In which of the following situations will an increase in the money supply have no effect upon equilibrium income.

Choose an answer

LM is steeply sloped and IS is relatively flat

LM is vertical and IS si steeply sloped

LM is steeply sloped and IS is vertical

LM is relatively flat as is IS

More Classes

Other Links

PPSC Economics Chapter 3 Macro Economics MCQs With Answers

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer