Question # 1

A fixed exchange rate, plus perfect capital mobility _______ the scope for monetary policy.

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Enhances

Undermines

Encourages

Facilitates

An example of discretionary fiscal policy would be.

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The operation of the welfare sate

The operation of the processive federal income tax

A tax cut adopted to stimulate consumption

An interest rate out in plummeted to stimulate consumption

Firm A's annual profit is.

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Rs.10,000

Rs.20,000

Rs.30,000

Rs.60,000

Productivity can grow.

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If capital per hour of labor increases.

If there are no technological advances.

If capital per hour of labor decreases

If real GDP per hour labor decrease and capital per hour of labor increases.

The equilibrium level of Y and I derived from the LM and IS equations above is.

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Y = 130 and I = 10%

Y = 200 and I = 30%

Y = 180 and I = 7%

Y = 250 and I = 2%

All of the following are parts of the business cycle except.

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Boom

slump

Recovery

Acceleration

The standard of living is often measured by

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Real GDP per capita

Real GDP

Real GDP * Population

Real GDP Plus depreciation

The signed minor of the matrass A is called.

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Adjoin

Co factor

Minor

Rank

When the S/L exchange rate rises the pounds______ and whent he S/L rate falls the pounds.

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depreciates, appreciates

revalues, devalues

appreciates, deprecates

becomes more expensive, becomes cheaper

Keynes owes the concept of multiplier to

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Pigou

Marshall

R.F.Khan

MARX

Sales taxes are generally considered to be.

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Proportional taxes

Regressive taxes

Progressive taxes

Indirect taxes

In monopoly the firm can

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Price

Output

Either price or output

Both a and b

The primary function of a bank is to.

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Control the money supply

Provide notes and coins for trade

Make a profit

Provide a chequeen clearing system.

in the keynesian model in the short run the amount of employment is determined by the effective labor demand curve and the level of.

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Prices

Output

The real interest rate

The supply of labor

If the expected inflation rate is unchanged a fall in the natural rate of unemployment would.

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shift the Phillips curve to the right

Not Shift the phillips curve

Shift the Phillips curve to the left

shift the Phillips curve to the left shift the long -run Philips curve to the right

facts are empirically verifiable

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Research

Obserevations

theory

Data

Those who argue in favor of import protection generally give the impression that such restricted trade will

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Decrease the level of national security

Provide benefits to some particular industry

Provides benefits to the entire nation

Not yield welfare losses for the nation

Except for taxes to offset ___ taxes are.

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Imperfect competition , popular

Extremality's, distortionary

Inequality, a first best option

Poor health, unnecessary

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

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

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Panel b

Panel c

Panel a

Panel d

The marginal rate of substitution of two goods can be obtain from

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Slope of budget line

Slope of demand curve

Slope of indifference curve

None of these

International trade forces domestic firms to become more competitive in terms of.

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The introduction of new products

Product design and quantity

Product price

All of the above

Under system fixed exchange rates which of the following policies promotes internal balance for a nation.

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Fiscal policy

Monetary policy

Both fiscal policy and monetary policy

Neither fiscal policy nor monetary policy

The idea that the natural rate of unemployment rises when the acual rate of unemployment rise is known s.

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Stabilization

Insider outsider theory

Hysteresis

an efficiency wage model

___________ are quotas that lead to a complete abolishment of trade.

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Nontariff barriers

Embargoes

Voluntary export restraints

Orderly marketing agreements

Dynamic multipliers occur when

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the assumption of ceteris paribus is dropped

The economy is not in equilibrium

Consumption is unrelated to disposable income

there is lagged response between consumption and disposable income

Social welfare is maximized when a hedonistic calculus regulates all human action according to the interventionist liberal

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John Stuart Mill

Thorstein veblen

Milton Frideman

Jeremy Bentham

The are price elasticity of demand is approximately

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0.3

3.3

6.0

0.2

A firm that breaks even after all economic costs are paid is earning.

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Economic profit

Accounting profit

Normal profit

Supernormal profit

Saving means

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Part of income for investment

Income for boarding

Non consumption of income in the current period

None of the above

Last land reforms made in 1977 by

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Z.A.Bhutto

Zia ul Haq

Nawaz Sharif

None of these

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