Question # 1

The conjecture that inequality first increases with development then decreases with further development has been

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Strongly supported by most studies

Supported mainly by cross section not time series studies.

Supported mainly by time sereis not cross section studies

Generally repudiated by empirical studies.

Fiscal defect in the budget means.

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Revenue Deficit plus the net borrowings of the government.

Budgetary deficit plus the net borrowings of the government

Capital deficit plus revenue deficit

Primacy deficit minus capital deficit

The econometric problem of errors in variables leads to

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Ballasted estimates of regression coefficients.

Autocorrelation

Unbiased estimates of regression coefficients but non minimum variance of estimated coefficients.

None of the above

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

If all the elements of a matrix of any order are zero, it is called.

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Identity matrix

Null matrix

Zero matrix

Both b and c

Weighted monetary aggregates

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Ignore the fact that some assets are more money like than others.

Are constructed by simply adding up the outstanding amounts of various types of asssets

Give greater weight to currency than to savings deposits

Value coins more than currency.

Equilibrium price is a price at which

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Quantity demanded is equal to quantity suppled

Quantity demanded minus quantity supplied is zero

quantity demanded = quantity supplied

All of these

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

Full- employment output is the level of output that firms in the economy supply when

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Taxes are zero

Wages and prices have fully adjusted

The unemployment rate in zero

All capital is fully utilized

Which of the following is true.

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If the marginal cost is greater than the average cost the average cost fallls.

If the marginal cost is greater than the average cost the average cost increases.

If the marginal cost is positive total costs are maximized

If the marginal cost is negatives total costs increase at a decreasing rate if output increases

The market demand for a product is found by

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Horizontally summing the individual demand curves

Vertically summing the induvial demand curves

Both horizontally and vertically summing the individual demand curve.

None of the above

If government regulations prohibit the production of a particular good the demand curve for that good will most likely.

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Shift leftward

Shift rightward

Remain unchanged

Disappear

The IS curve shifts to the left when

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Taxes increase

Government spending increase

The money supply increases

All of the above occur

That the division of labor is limited by the size of th market best applies to which explanation of trade.

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Factor endowment theory

Product like cycle theory

Economics of scale theory

Over lapping demand theory

If an increase in the price of gasoline increases the demand for gas hybrid cars, then

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Hybrid cars are an inferior good

Gasoline and hybrid cars are complements in consumption

Gasoline is an inferior good

Gasoline and hybrid cars are substitutes in consumption

All of the following are benefits of the single market except.

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It allows countries to exploit their comparative advantage, more fully

Firms could more readily exploit economies of scale

It intensified competition

It is easier book holidays in member countries.

The theory of overlapping demands predicts that trade in manufactured goods is unimportant for countries with very different.

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Tastes and preferenes

Expectations of future interest rate levels

Per capita income levels

Labor productivities

Disposable incomes is equal to.

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National income Minus taxes

Real GDP

National income Minus taxes

National income Minus Taxes plus transfers

Can economic theories be tested.

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No since individuals will seldom respond in predictable ways

Yes, since all individuals respond int he same ways to the same situation.

No , since the general behavior of a large numebr of individuals cannot be predicated

Yes , since people will, on average, respond in predictable ways to changes in costs and benefits.

Which of the following does not characterize monopolistic competition.

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Product differentiation

Many producers

Absence of advertising

Some control over price

By definition, the marginal propensity to consumes.

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Equals OC/A Yd

Is the behavioral coefficient c in the equation C = C + cYd

Is the slops of the consumption function.

All of the above

National sample survey scheme is an example for

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Government policy

Planning

Population analysis

Business

The multiplier is calculated as.

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1(1-MPC)

1/MPS

1/MPC

a or b

Intra industry trade therory.

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Explains why the United States might export autos and import clothing

Explains why the united states might export and import differentiated versions of the same product such as different type of autos.

Assumes that transport costs are very low or do not exist

Ignores seasonal considerations for agricultural goods

A long-run total cost curve can be constructed from

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An income consumption curve

A price consumption curve

Isoquant is cost expansion path diagram

An Engel curve

If the fprice in a market is fixed by the government below equilibrium.

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There is excess equilibrium

There is excess supply

There is excess demand

There is equilibrium

The view that human beings are above of outside of nature as a source of value to known as.

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Eco cetrism

Authropocentrum

Holism

Bio centrisim

In perfect competition there is.

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Many buyers

Many sellers

Homogeneous product

All of these

Projects A,B,C,D,E cost Rs. 100, Rs, 200, Rs. 300, Rs. 400, and Rs. 500 with MEC's of 0.07, 0.06,0.09 ,0.10 and 0.11 respectively. The market rate of interest is 8% Total investment spending is

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Rs. 1500

Rs.1300

Rs.1200

Rs.300

An increase in costs will

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Shift aggregate demand

Shift aggregate supply

Reduce the natural rate of unemployment

Increases the productivity of employees

The Marginal cost of product W exhibiting positive externalities is McW = 25 + 5 Qs, the competitive price for each unit of W (Pw) is Rs. 175 and the positive externality is worth Rs. 100 to society for each unit produced. Society considers product W under produced by how many units.

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10 Units

15 Units

20 Units

5 units

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