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PPSC Economics Chapter 3 Macro Economics MCQs With Answers
Question # 1
An adverse supply shock that is permanent shifts which curve in addition to the curves shifted by.
One that is temporary.
Choose an answer
The LM curve
The IS curve
The FE line
The labor demand curve
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Question # 2
If government spending of Rs. 10 and a lump sum tax of Rs.10 is added, the empirical equation for the new IS curve becomes.
Choose an answer
Y = 285 + 20 I
Y = 270 - 10 i
Y = 285 - 50 i
Y = 210 - o.5 i
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Question # 3
The measured of GDP includes
Choose an answer
Non market goods such as home making and child rearing
The benefits of clean air and water
Estimated values of activity in the underground economy
Purchases and sales of goods produced in previous periods
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Question # 4
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
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Question # 5
When the Central Bank initiates actions which will lead to an increase in the supply of money IS -LM models tell us to expect that.
Choose an answer
The interest rate will rise
The interest rate will decline
The price level will not change
Investment will decline
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Question # 6
Keynesian economists think general equilibrium is not attained quickly because.
Choose an answer
The real interest rate adjusts slowly
The level of output adjusts slowly
The real wage rate adjusts slowly
The price level adjusts quickly
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Question # 7
A technological improvement will
Choose an answer
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.
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Question # 8
The yield curve shows
Choose an answer
The yields on stocks of different maturities
The interest rates on bonds of different maturities.
The yields on stocks with differing default risk
The yields on bonds with differing default risk
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Question # 9
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
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Question # 10
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
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Question # 11
When GNP is Rs.500 billion and consumption expenditures are Rs.300 billion.
Choose an answer
the MPC is 6
The MPS is 4
The Multiplier is 2.5
None of the above
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Question # 12
Which of the following changes shifts the SRAS curve up.
Choose an answer
Ani increases in the labor force
A decrease in government purchases
An increase in firms costs
An increase in the money supply
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Question # 13
An increase labor supply would cause the IS curve to.
Choose an answer
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
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Question # 14
GDP difference between GNP because.
Choose an answer
GDP = GNP - net factor payments from abroad
GNP = GDP -net factor payments from abroad
GDP = GNP -capital consumption allowances
GNP = GDP -capital consumption allowances.
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Question # 15
The data indicates that country A in billions of rupees is experiencing a
Choose an answer
A deficit of Rs.60
A surplus of Rs. 300
Deficit of Rs.900
A deficit of Rs. 500
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Question # 16
An economic variable that moves in the opposite direction as aggregate economic activity up in is called.
Choose an answer
Pro cyclical
Countercyclical
A cyclical
A leading variable
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Question # 17
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
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Question # 18
Two independent variables are not independent of each other in a multiple regression problem The analyst most likely will be confronted with.
Choose an answer
The problem of autocorrelation
A type 1 error
The problem of multicollinear rarity.
a type II error
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Question # 19
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
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Question # 20
An efficient economy is an economy
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In which output is steady or growing and there is low inflation
That produces what consumers demand and does so at the least possible cost.
that distributes output equally among all consumers
In which there is a fair distribution of wealth.
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Question # 21
As the economy nears full capacity the short run aggregate supply curve
Choose an answer
Stagflation
Structural inflation
Demand side inflation
Supply side inflation
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