Question # 1

All of the following are trade problems of developing countries except.

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Unstable export markets

improving terms of trade

Limited access to the markets of industrial countries

Highly elastic demand curves for their products.

Monetary policy can affect output.

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this statement is always true

This statements always false

This statement is true only in the short run

This statement is true only in the medium run and the long run

An increase in the marginal propensity to consume will

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Increase the size of the multiplier

Increase the marginal propensity to save

Decrease national income

Reduce injections into the economy

A movement along the supply curve may be caused by

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A change in technology

A change in the number of producers

A shift in demand

A change in costs

In a perfectly competitive market if firms are earning an economic profit the economic profit.

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Attracts entry by more firms, which lowers the market price

Can be earned both in the short run and long run

Is less than the normal profit

Leads to a decreases in market demand

In the Keynesian model in the long run a decrease in the money supply will cause ___ in the interest rate and _____ in the price level.

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An increase ; an increase

A decrease ; a decrees

No change ; an increase

No change ; a decrease

If injection are less than with drawls at the full employment level of national income there is.

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an inflationary gap

Equilibrium

A deflationary gap

Hyperinflation

Quantitative characteristics includes.

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Beauty

Emotion

Intelligence

Data

using money as a medium of exchange.

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Requires people to math goods wanted with goods available.

Reduces the range of feasible exchanges in the economy

Inhibits economic transactions

Reduces the need for barter in the economy.

A _________ is a regional trading block in which member countries eliminate intercanal trade barriers but maintain existing barriers against countries that are not members.

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Free trade area

Customs union

Common market

Monetary union

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

If a consumer's budget constraint is given as P, X,+ Py Y = B thent he absolute slope of the budget line is.

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B

x/y

P/Py

None of these

An upward shift in marginal cost ___________ output and an upward shift in _____ marginal revenue __ output.

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Reduce , reduce

Reduce , increase

Increased, increased

Increases, reduces

If the demand curve for a good is downward sloping then the good must be.

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Normal

Inferior

Giffen

Either a or b

The application of the trickledown effect policy in 1960s was resulted in.

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Increase income disparity

Increase income poor

Decrease income disparity

Equal distribution of income

Cross -elasticity following commodities is very high

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Compliments

Normal

Goods substitutes

Good compliments

In the UK under a _________ of the labour force belong to a trade union.

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Quarter

Third

Half

Three quarters

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.

A temporary decline in productivity would cause the IS curve to.

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Shift up and to the right

Shift down and to the left

Remain unchanged

Shift up and to right only if people face borrowing constraints

If the nominal money supply doubles while real money demand is unchanged what happens to the price level.

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The price level increases by a factor of four

The price level doubles

The price level is unchanged

The price level falls by one half.

Perfect competition implies

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Homogeneous goods

Inferior goods

Superiors goods

Differential goods

When the export function is Rs.100-0.2 Y , net exports are 0 when income is .

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Rs.300

Rs.400

Rs.500

Rs.600

If both supply and demand for a good increase at the same time which of the following must also increase

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The equilibrium price

The use of substitutes

The equilibrium quantity

All of the above

Macro economics is the study of.

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Individual building blocks in the economy

The relationship between different sectors of the economy

Household purchased decisions

The economy as a whole

Pure research is focused to collect knowledge without any intention to.

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Find it

Formulation

Observe it

apply it

management of the economy via extensive regulation and laws specified by the national government is most consistent with

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syndication

Mercantilism

Classical liberalism

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.

When supply increases in an agricultural market famer's earnings might fall because.

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Supply is price elastic

Demand is price inelastic

the government buys up all the excess production

All output must be sold at a maximum price

All of the following are credit items in the balance of payments except.

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Investment inflows

Merchandise exports

Payment for American service's to foreigners

Private give to foreign residents

A competitive firm produces a level of output at which.

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Price is greater than marginal cost

Price equals marginal cost

Price is less than marginal cost

None of the above

The price of Ketchup at a market increases by 12.5% per can, which results in a decrease in quantity purchased by 40% per week, the demand is.

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Relatively elastic

Relatively inelastic

Perfectly elastic

Perfectly iinelastic

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