Question # 1

If product an inferior good.

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Demand is inversely related to income

Demand is inversely related to price

Demand is directly related to price

Demand is inversely related to the price of substitutes

The product cycle theory of trade is essentially a

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Static short run trade theory

Dynamic, long run trade theory

Zero sum theory of trade

Negative sum theory of trade

As long as all prices remain constant an increase in money income results in.

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An increase in the slope of the budget line

A decrease in the slope of the budget line

An increase in the intercept of the budget line.

a decrease in the intercept of the budget line.

The factor endearment model of international trade was developed by.

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Adam Smith

David Ricardo

John Stuart Mill

Eli Heckscher and Beril Ohlin

The earliest statement of the principle of comparative advantage is associated with.

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Adam Smith

David Ricardo

Eli Heckshcer

Berti Ohlin

In an open economy leakages to imports ______ the value of the multiplier.

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Reduce

Increase

do not change

None of these

In an economy experience high interest rates and high unemployment The ISLM frame work predicts that _________ policy has been too.

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fiscal ; expansionary

fiscal ; contractionary

monetary ; expansionary

monetary ; contractionary

The view which allows only use value ot nature is known as.

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Deep ecology

Shallow ecology

Life ecology

None of these

The marginal product of labor

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Is measured by the slope of the production function relating capital of employment

Is larger when the labor supply is relatively larger

Is smaller when the labor supply is relatively smaller

Decreases as the number of workers already employed increases

A good example of a public good is.

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Public transport

National defense

The national health service

Rail transport

In the theory of the firm profit maximization is always synonymous with.

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Profitability

Economic profit making

maximization of the sales revenue

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

Absolute advantage is determined by

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Actual difference in labor productivity between countries.

Relative difference in labor productivity between countries.

Both a and b

Neither a nor b

Extension and contraction of demand mean

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Movement on the same demand curve

Movement to high demand curve

Movement to lower demand curve

Movement to another demand curve

Which of the following is an economic activity.

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Teaching of a teacher in the school.

To teach son at home

To serve her child by mother

to play foot ball by a student

The set of all elements belonging to A but not to B is.

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B - A

A - B

A'

B'

The budget deficit tends to decrease when

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GDP increases

GDP decreases rapidly

GDP remains unchanged

GDP decreases slightly

Under the constitution of Pakistan National Finance Commission distribute the amount from Federal taxes to provinces on the basis of.

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Equality

Area

population

Natural Resources

In a Boom

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Surpluses are likely to occur

Prices are likely to fall

supply will increase immediately to match demand

Shortages may occur

In August ____ the government established a working group on private investment for the Eight Five Year plan 1993-98

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1989

1990

1991

None of these

Which of the following is a NOT component of M-2.

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Small time deposited

Money market mutual funds

Stocks

Checkable deposits

In Islamic economic system holding is considered against the right of.

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Entrepreneurs

Labour

Consumers

Producers

If banks and the private sector decide to hold less cash the money multiplier will be.

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Unchanged

Larger

Smaller

unstable

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

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

With a positive externality

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There is under consumption in the free market

There is over consumption in the free market

The government may tax to decrease production

Society could be made off if less was produced

The fall in the birth ratio will affect the process of economic growth according to

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Schumpeter

A.H.Nansen

Karl Marix

M.P. Todaro

An income demanded curve of an inferior good is.

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Same in slope

Upward is slope

Downward in slope

None of these

In economics money refers to

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Income

Wealth

Assets use and accepted an payment

Currency

A price cross elasticity of 0.81 between X and Y shows that.

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They are complementary goods

They are competitive substitutes

They are not substitutes

a reduction in the price of one would cause an increase in the consumption of the other.

If both Marginal cost and marginal revenue increase, a firm.

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Should increase output

Should reduce output

Will require further information on how to respond

should not change output

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