Question # 1

A decrease in the legal reserve ratio from 25% to 20% will

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Result in light money

Be contractionary

Increases excess reserves and the potential money multiplier

Decrease excess reserves and the potential money multiplier

A vertical demand curve for a particular good implies that consumers are.

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Sensitive to changes in the price of that good

Not sensitive to changes in the price of that good.

Irrational

Not interested in that good

Holding all other factors constant consumers demand more of a good the

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Higher its price

Lower its price

Steeper the downward slope of the demand curve

Steeper the upward slope of the demand curve

Foreign direct investment is made on

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Friendly basis

social basis

Commercial basis

Humanitarian basis

The largest source of tax revenue for the federal government is

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The prerenal income tax

The social security tax

the property tax

The sales tax

If there are 50 firms in a industry each selling 2% of the total sales the concentration ratio is.

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50%

2%

8%

100%

In the Harrod - Domar equation g = s/v , v is defined as.

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the value of the country a capital stock

The ratio of the country's capital stock to its output.

The change in the country's capital stock

None of the above

The concept of carbon credit originated from which one of the following.

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Earth summit rio de jeneiro

Kyoto protocol

Montreal protocol

G-8 summit Helligendamm

in The Liquidity trap region

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Fiscal policy is not effective

Monetary policy is completely ineffective

Monetary policy is completely effective

Fiscal policy and monetary policy are equally effective

The role of _________ is to direct one nation's savings into investments of another nation

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Merchandise trade flows

Service flows

Current account flows

Capital flows

A reduction in the money supply is likely to

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Reduce interest rates

Increase the interest rate

Increase inflation

Decrease deflation

in the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift _____the equilibrium level of aggregate output to ______l and the IS curve Curve to shift to the.

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rise ; left

rise ; right

fall ; left

fall ; right

In monopolistic competition, firms desire to sell more output at equilibrium because.

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Price is greater than average cost

Price is greater than average variable cost

Price is greater than marginal cost

Price is equal to marginal revenue

A study of how increase in the minimum wage rate will effect the national unemployment rate is an example of.

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Descriptive economics

Normative economics

Macro economics

Micro economics

For a competitive firm the demand curve

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A horizontal

Coincides with the marginal revenue curve

Coincides with the average revenue curve

All of the above

In the UK mergers can be referred to the competition commission of they create a firm with _______ of the market.

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15%

20%

25%

30%

A competitive equilibrium is described by

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A price only

A quantity only

The excess supply minus the exceess demand.

A price and a quantity

Net National product equals.

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Gross national product minus indirect business taxes

Gross national product minus depreciation

National income minus indirect business taxes

National income pluses depreciation

A specific tax on sellers will

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shift the demand curve to the right

Shift the demand curve the left

Shift the supply curve to the right

Shift the supply curve to the left

Short run is a time frame where a firm can change its.,

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Total cost

Total production

Plant size

None of these

Last week, Martha spend one day cleaning a house for this she was paid $50 The rest of the week, she spend looking for a job Martha would be callsified as.

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Employed

Unemployed

Not in the labor force

None of these

If tastes are identical between countries than comparative advantage is determined by

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Supply conditions only

Demand conditions only

Supply and demand conditions

Can't tell without more information.

A production possibilities curve indicates that when resources are being used efficiently

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More of one good cna be produced only if less of another good is produced

More of one good can be produced only if its price is lowered

Producing more of one good result in greater production of other goods

More of one good can be product without producing less of other goods

Time lags which often erode effectiveness of monetary and fiscal policy measures represent.

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The change in export and import price.

Delays in the response of the economy to stabilization policy.

The foreign response to price changes

The change in exchang erates

Resources in an economy

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Are always fixed

Can never decrease

Always increase over time

Are limited at any moment in time

The price elasticity of demand is teh same thing as the negative of the

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Slope

Reciprocal of slope

The first derivative of the demand function

Reciprocal of slope times the ratio of price to quantity

The main monetary tool in Islamic economic system regarding circulation of wealth is zakat it is for.

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Poor and needy

consumers

Producers

Banks

If the demand for coffee decreases as income decreases, coffee is a

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Normal good

Inferior good

Substitute good

Complementary good

The parable of Riding a Switchback suggests that stabilizing policy.

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Is not sufficiently stimulating or contra citing the economy at any time

Is desirable

Is effective

Is stimulating or contracting the economy at the wrong times.

In the ISLM frame work a contractionary fiscal policy causes aggregate output to ___________ and the interest rate to

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Increase ; increase

Increase ; decrease

decrees ; decrease

decrease ;Increase

Commercial banks

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Are financial intermediaries that offer demand deposits.

Are owned by the Federal Reserve

Are non profit banking institutions

Are overseen by the Federal savings and loan insurance corporation.

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