Question # 1

The nominal interest rate minus the inflation rate is the

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Depreciation rate

Discount rate

Forward rate

Real interest rate

Industries that are extremely sensitive to the business cycle are the.

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Durable goods and service sectors

Nondurable goods and service sectors.

Capital goods and nondurable goods sectors.

Capital goods and durable goods sectors.

Which of the following changes shifts the SRAS curve down.

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An increase in the labor force

An increase in the money supply

A decrease in government purchases

A decrease in firms costs

Given the Is -LM construction of the figure above an unexpected increase in the price level, in the absence of any policy adjustment will.

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Increase both interest rates and GNP

Reduce both interest rates and GNP

Increase GNP but cause interest rates to tall

Increase interest but cause GNP to fall.

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

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

The long run foreign exchange rate between the U.S. and Japan is 200 Yen =Rs. 1 under a floating exchange rate Which of the following does 112 t occur if the Federal Reserve reduce the money supply in order to prevent the occurrence of inflation.

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Foreign capital flows to the U.S.

The U.S. dollar appreciates

Real net exports decline

American real GNP experience a slower rate of growth

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

The origin of the idea of a trae off between inflation and unemployment was a 1958 article by

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A.W Philips

Edmund phelps

Milton Friedman

Robert Gordon

A rise in the price of bond causes the yield of the bond to.

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Rise

Fall

Remain unchanged

Rise uf ut's a short term bond, fall if it's a long term bond

The Root Mean square Error for the actual sales and sales forecast for 1985 and 1986 is.

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20.2

19.9

14.7

17.2

The hypothesis would the tested with

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A two tailed test

A one tailed test with the rejection region in the left tail

a one tailed test with the rejection region on the right tail

The normal distiribution

At point of satiety marginal utilityis.

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Positive

Negative

Maximum

Zero

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

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Increasing

Maximum

Falling

Minimum

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

In the long run an increase in consumer spending would cause output to ________ and the price level to.___________

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rise;rise

rise; stay; constant

stay constant ; stay constant

Stay constant ; rise

For a borrower an increase in the real interest rate will lead to.

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Higher current consumption and less borrowing

Higher current consumption and less saving

Lower current consumption and less borrowing

Lower current consumption and less saving

"Economics is a science " the basis of this statement is.

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Relation between causes and effect

Use of deductive method and inductive method for the formations of laws

experiments

All of the above

According to Keynesians the primary source of business cycle fluctuation is.

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Aggregate demand shocks

Productivity shocks

Oil price shocks

Consumer confidence shocks

The IS curve shows the combinations of output and the real interest rate for which.

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The goods market is in equilibrium

The labor market is in equilibrium.

The financial assets market is in equilibrium

An increase in output will cause the market clearing interest rate to be bid up.

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

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