Question # 1

The asset market approach is most helpful in explaining.

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Why exchange rate remain quite stable

Why government change their money supplies

Long term exchange rate movements

Short term exchange rate movements

Developing countries that concentrate production in agricultural products or raw materials may face a long run decline in their international terms of trade because of.

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Inelastic demand for these products in advanced countries.

Large increase in the supplies of these products on world markets because of export expansion polices

sluggish demand for these products in advanced countries

All of the above

Real GNP is a crude measure of national welfare because it excludes.

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Consumption

Investment

Export's

work in the home

Depreciation is.

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A decrease in the stock of capital

Gross investment

Net investment

An increases in the stock of capital

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

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fall ; leftward

rise ; leftward

fall ; rightward

rise ; rightward

Given the cost data indicated in the table above the average variable cost of producing 7 units of output is

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Rs.37

Rs.29

Rs.31

Greater than Rs.37

Historically countries at early stages of rapid economics development have tended to experience.

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Trade deficits and an excess of investment over domestic saving.

Trade surpluses and an excess of investment over domestic saving

Trade deficits and an increase of domestic saving over investment.

Trade surpluses and an excess of domestic saving over investment.

A fall in interest rates is likely to

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Increase aggregate demand

Increase savings

Decrease consumption

Decrease exports

A nation with a current account deficit will be

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Lending more money to other nations

Experiencing a surplus in exports of goods and services

Reducing its indebtedness to other nations

Going further into debt with other nations

Human wants are

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Always fixed

Limited

Unlimited

Likely to decrease over time

To reduce cyclical unemployment the government might.

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Increase the budget surplus

Increase the balance of payments deficit

Reduce interest rates

Reduce government expenditure

The agricultural price support program is an example of.

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A price celling

A price floor

Equilibrium pricing

None of these

A change that increase real money demand relative to the real money supply causes.

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The LM curve to shift down and to the right

The LM curve to shift up and to the left

The IS curve to shift down and to the left

The IS curve to shift up and to the right

In the short run no firm operates with a loss unless

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Variable cost equals fixed cost

Variable cost falls short of fixed cost

Total revenue covers variable costs

Total revenue covers fixed cost

Research adopted by

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Scientific method

Political method

Invidia method

Public method

To be allocatively efficient ta firm must produce where

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the total cost equals demand

the average revenue equals the marginal revenue

The price equals the average cost

The price equals the marginal cost

A tax increase __________ disposable income ____ consumption expenditure and shifts the IS curve to the.

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Increase; increases ; right

Increase ; decreases ; left

decreases ; increases ; left

decreases ; decreases ; left

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

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the long run aggregate supply curve.

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slopes upward

Sloped downward

Is vertical

Is horizontal

The substitution effect of a decrease in real interest rates is to cause a consumer to.

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Increase future consumption and decrease current consumption

Decrease future consumption and increase current consumption

Increase current consumption and increase saving

Decrease current consumption and increase saving.

The first census in Pakistan was held in

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1948

1951

1959

1961

Real business cycle theorists think that most business cycle fluctuations are caused by shocks to.

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The production function

The size of the labor force

The real quantity of government purchases

The spending and saving decisions of consumers

The Ad, SRAS ,and LRAS curve each show a relationship between which two economic variables.

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The aggregate price level and output

The aggregate price level and the interest rate

Output and unemployment

Output and the interest rate.

The idea that the money supply should change to accommodate changes in aggregate demand is associated with the ideas of.

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Milton Friedman

Ronald reagan

Margaret Thatcher

John Maynard Keynes

Qualitative research focuses primarily on the meaning of.

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Subjective attributes of individuals groups

Objective attributes of individuals or groups

Facts of Indi duals or groups

Descriptive attributes of individuals or groups

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.

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.

In the period of Zia ul Haq the nationalized enterprises went on.

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Loss

Profit

Developing

None of these

Observation ,t he observer have been old specifically what is to be observed.

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Structured

Discussed

Controlled

Participated

The firm under monopolistic competition is likely to produce less and set a higher price than under perfect competition because.

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The firm faces decreasing returns to scale

The firm faces increasing costs

The firm must incur selling expenses including advertising.

The firm faces a downward sloping demand curve

Which of the following procedures is included in the process that produces a value for disposable personal income

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subtracting excies and sales taxes

Subtracting nonbusiness interest

Subtracting transfer payment from government.

subtracting income taxes

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