Question # 1

The free market involves

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The free provision of products

The subsidizing of products by the government

Market forces of supply and demand

All trade via barter

An increase in autonomous consumer expenditure causes the equilibrium levelof aggregate output to _______ at any given interest rate and shifts the ____ curve to the

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rise ; LM ;right

rise ; IS ; right

fall ; LM, Left

rise ; IS ; Left

If any equation involving two variables, such as y -=2x + 1, the variable that appears on the right hand side of the equation is by convention called.

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Dependent variable

independent variable

Endogenous variable

Explained variable

An increase in the number of workers hired by a firm could result from

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a decrease in the marginal product of labor

a decrease in the marginal revenue product of labor

An increase in the real wage

A decrease in the real wage

Price controls are

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Necessary for consumer's welfares

A must to check inflation

Doomed to fall

None of these

Price discrimination is possible

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Oligopoly

Duopoly

Perfect competition

Monopoly

A activates which do not promote human welfare cannot be encouraged.

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Western estate

Police state

Islamic estate

None Islamic estate

At any given level of the interest rate expectations are likely to be___________ optimistic and planned investment is likely to be ______ when _________ is growing rapidly than when it is growing slowly or falling.

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Less ; higher ; output.

more ; higher ; output

less ; lower ; unplanned investment

more ; lower ; unplanned investment

An increases in the demand curve for orange juice would be illustrated as a.

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Leftward shift of the demand curve

Right ward shift of the demand curve

Movement up along the demand curve

Movement down along the demand curve

In the money market a condition of excess supply of money cna be eliminated by a _________ in aggregate output or a __ in the interest rate , both of which increase the quantity of money demanded.

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rise ; rise

rise ; fall

fall ; rise

fall ; fall

The long run aggregate supply curve.

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Is vertical

Slopes upward

Is horizontal

Slopes downward

An advocate of the classical model of the economy would claim that unemployment a created when the ___________ is above its equilibrium level in the.

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Price level, agregate economy

Tax rate, government ebudget

Wage rate, labour market

Interest rate, market for loanable funds

Headquarter of the Planning commission of Pakistan is located in.

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Karachi

Lahore

Islamabad

None of these

The opportunity cost of holding currency decrease when

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Income decreases

The interest rate on bonds decreases

The interest rate on money decrease wealth decrease

Wealth decreases

If your income during one year is L 10,000 ad the following year it is L,12,000 then it has grown by

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20%

2%

12%

15%

industrial growth rate projected to__ this year against 3.1 percent last year

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2.4%

3.4%

4.4%

5.4%

In the labor market if the government imposes a minimum wage that is below the equilibrium wage then.

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Workers who wish to work at the minimum wage will have a difficult time finding jobs.

Firms will hire fewer workers than without the minimum wage law.

Some workers may lose their jobs as a result

Nothing will happen to the wage rate or employment

When planned consumption equals Rs. 40 + 0.90 Yd and planned investment is Rs.50, the equilibrium level of income is.

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Rs.90

Rs.400

Rs.500

Rs.900

If an economy is productively efficient.

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Everyone is wealthy

Resources are unemployed

More of one product can only be produced if less of another product is produced.

The distribution of income is equal

In Production of goods and services tradeoffs exist becasue.

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Buyers and sellers often negotiate prices

Society has only a limited amount of productive resources

Not all production is efficient

Human wants and needs are limited at a particular point in time

When a person received an increase in wealth, what is likely to happen to consumption and saving.

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Consumption increase and saving increases.

Consumption increases and saving decreases

Consumption decreases and saving increases

Consumption decreases and saving decreases

Which of the following statements abut the relationship between marginal cost and average cost is correct.

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When MC is falling AC is falling

AC equals MC and MC'S lowest point

When MC exceeds Ac, Ac must be rising

When Ac exceed MC, MC must be rising

The business cycle is not transmitted from one country to another through.

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Private sector imports and exports

Economic policy

The duration of compulsory education

Labour supply changes

In the product market of the circular flow model.

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Firms buy finished products from households.

Consumers buy factors of production from firms

Firms Sell factors of production to the government

Consumers buy finished products from firms

Research based on empirical evidences and.

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scientific experience

Political experience

Rational experience

Observable experience

In the long run a profit maximizing monopoly produces an output volume that

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Equates long run marginal cost with marginal revenue

Equates long run average revenue

Assures permanent positive profit

Is correctly described by both a and c

To determine the total demand for all consumers sum the quantity each consumer demands.

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At a given price

At all prices and then sum this amount across all consumers

Both a and b will generate the same total demand

None of the above

A tax of 18 cents per unit of imported cheese would be an example of a.

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Compound tariff

Effective tariff

Ad valorem tariff

Specific tariff

If firms paying employees monthly began paying them weakly then the demand for money would.

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Rise and income would rise

Rise and income would fall

Fall and income would rise

Fall and income would fall

General agreement on Tariffs and Trade was established in.

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1948

1949

1950

None of these

According to the permanent income hypothesis all increases in .

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Permanent income are saved

Permanent income are consumed

transitory income are saved

Transitory income are consumed

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