Question # 1

If the federal reserve whishes 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 the market

All of the above

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%

Utility means.

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Power to satisfy a want

Usefulness

Willingness of a person

Hamfulness

From a Keynesian perspective business investment will de cline as a result of.

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A fall in the interest rate

A decrease in business taxes

A decline in business expectations

Acceleration of business depreciation

Which of the following is the second law of gossen.

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Law of equal marginal utility.

Law of equi product

Theory of indifference curve

Law of diminishing marginal utility.

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

Company X sells Rs.75 million dollars of 9.5% first mortgage bonds at par The company's marginal tax rate to 30% The after tax cost of debt is.

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2.85%

3.175

6.68%

7.55

Given the data above, the empirical equation for the IS curve is.

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Y = 275 + 10 i

Y = 225 + 50 i

Y = 250 - 10 i

Y = 275 - 501

The appropriate expenditure switching policy to correct a balance of payments deficit is.

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Contractionary monetary policy

expansionary fiscal policy

Currency devolution

Currency revaluation

A change in autonomous spending is represented by.

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A movement along a spending line

A shift of a spending line

A change in a behavioral coefficient.

None of these

Which of the following will not result in an increase in the level of income.

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An increase in autonomous spending

A decrease in autonomous taxes

An increase in autonomous transfers

an increased in net tax revenues

Peaks and trough of the business cycle are known collectively as.

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Volatility

Turning points

Equilibrium point

Real business cycle events

When an increase in government spending is matched by an equal decrease in government transfers, the income level will.

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Stay the same

Increase

Decrease

All of the above

While resources and products flow in one direction of the circular flow model what flow the other direction.

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Services

Public goods

Money

Imported goods

Which of the following solutions does the economist suggest to cost inflation in higher education.

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Cutting professor salaries

Make students live at home

Reduce college from four to three years

B and C

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

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

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The nominal money stock

The unemployment rate

The real wage

Average labor productivity

Which of the following methods is used for internalizaing positive externalities

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Positive taxes

Government exchange of property rights

Effluent fees

Corrective substidies

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

Which of the following is not included in gorses investment.

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Business and residential constrcution.

Expenditures on consumer goods

Additions to business inventory

Expenditures on machinery

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

Production function

Productivity relation

Marginal product

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