Question # 1

The ratio of the change in the equilibrium level of income to a change in some automats increase in spending is the

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Elasticity coefficient

Multiplier

Automatic stabilizer

Marginal propensity of the autonomous variable

Country A 's GNP is increasing by 3% a year in contrast to its population growth of 2.4% The rate of growth of per capita GNP is.

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3%

0.85

0.6%

2.4%

Which of the following macro economic variables is the most seasonally pro cyclical.

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Expenditure on services

The unemployment rate

Expenditure on durable goods

The real wage

An economic variable that moves in the opposite direction as aggregate economic activity up in is called.

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Pro cyclical

Countercyclical

A cyclical

A leading variable

When the economy goes into are cession there's an increase in.

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Frictional unemployment

structural unemployment

Cyclical unemployment

Voluntary unemployment

A decrease in wealth 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 in poeple face borrowing constraints.

An import function is 100+0.1 Y and exports are exogenous. If income (Y) is 500, and there is a trade deficit of 50, then exports are.

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0

25

75

100

The valued of expenditure multiplier relates.

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The change in autonomous spending to the change in income

the change in consumption to change in income

The change in come to the change is consumption

The change in income to the change in autonomous spending.

When equilibrium in the money and goods markets occurs at a rate of interest below the BP schedule internal and external equilibrium for the United States can he achieved by.

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Expanding the U.S. money supply

Increasing government spending

Increasing taxes

Lowering interest rates in the united states.

According to Okun's law an increase in the unemployment rate will cause_______ in the level of empolyment and __ in the level of output.

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An increase ; an increase

An increase; a decrease

A decrease ; an increase

a decrease ; a decrease

The fact that the long run Phillips curve is vertical implies that

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Monetary policy can't effect unemployment

Money is neutral in the long run

There is a natural rate of inflation

Money can't affect inflation in the long run

Equilibrium occurs in a two sector model when

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Saving equals investment.

Consumption plys investment equals the value of putput

Planned saving equals planned investment.

Aggregate spending equals the revenues of the business sector

When GNP is Rs.500 billion and consumption expenditures are Rs.300 billion.

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the MPC is 6

The MPS is 4

The Multiplier is 2.5

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 regression equation for consumption as a function of disposable income is C = -60 + 0.90Y .the standard error of Y is 30 and the standard error of estimate is 9.5 What is the 95% confidence interval for C when Y is Rs. 1000 billion.

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Rs.941 to Rs. 979

Rs.900 to Rs. 1,020

Rs.821 to Rs.859

Rs.780 to Rs.900

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

The nominal interest rate minus the inflation rate is the

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Depreciation rate

Discount rate

Forward rate

Real interest rate

The appropriate expenditure switching policy to correct a balance of payment surplus is.

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Currency revaluation

Currency devaluation

Expansionary monetary policy

Contractionary fiscal policy

The value of a producer's output minus the value of the inputs if purchases from other producers is called the producer's

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Surplus

Profit

Gross product

Value added

An adverse supply shock that is permanent shifts which curve in addition to the curves shifted by.

One that is temporary.

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The LM curve

The IS curve

The FE line

The labor demand curve

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