Question # 1

In the ISLM framework an expansionary monetary policy causes aggregate output to _____________ and the interest rate to

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increase ; increase

Increase ; decrease

decrease ; decrease

decrease ; increase

Fiscal policy refers to the manipulation of government income and expenditure to.

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control the volume and price of money

Limit the rate of increaes in incomes

Effect the value of the dollar on world financial market.

Affect the level of total expenditure output and employment

According to classical models, the level of employment is determined primarily by

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The level of aggregate demand for goods and services

Prices and wages

Government taxation

Government spending

In a typical cartel agreement the cartel maximizes profit when it.

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Behaves like a monopoly

Behaves like a perfectly competitive firm

Behaves like a duopoly

Is flexible in enforcing production targets

In the Keynesian model which curve is vertical.

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LRAS

SRAS

AD

NS

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

Find the change in revenue to the industry due to the taxs.

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Rs. 40 billion

Rs. 34 million

Rs.25 million

Rs.36 Million.

Social science research is a systematic method o exploring, analyzing and extend, corrector or verify knowledge of human behavior and.

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Aqua life

Natural life

Social life

Envioment

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

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Adam Smith

David Ricardo

Eli Heckshcer

Berti Ohlin

A profit maximizing firm will employ labour up to the point where.

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Marginal revenue = Marginal product

Margial cost = Marginal product

Marginal revenue product = Average cost of labour

Marginal revenue product = Marginal cost of labour

Characteristics of economic laws are

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Mere statement of economic tenduencies

Less certain

Hypothetical

All of the above

An -increase the expected future price of a good.

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Increases its demand

Decreases its demand

Increases its supply

Has no effect on either its demand or its supply.

A competitive firms demand curve is.

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Horizontal

Vertical

Down ward sloping

Fairly elastic

Which exchange rate system does not require monetary reserves for official exchange rate intervention.

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Floating exchange rates

Pegged exchange rates

Managed floating exchange rates

Dual exchange rates

Satellite television subscription and television detection devices are ways in which broadcasting companies address the _____ problem.

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Externality

Market imperfection

Deadweight burden

Free rider

The cliche that "the punishment should fit the crime" originated in the writing of.

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Plato

Thomas Aquinas

Jeremy Bentham

David Hume

Investors engage in ____ when they move funds into foreign currencies in order to take advantage of interest rates abroad the are higher than domestic interest rates.

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Currency arbitrage

Interest arbitrage

Short positions

Long positions

Free trade is based on the principle of

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Comparative advantage

Comparative scale

Economics of advantage

Production possibility advantage

Economics assumes that people consume goods and services to achieve.

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Status

Prestige

Utility

Self esteem

An increasingly higher marginal income tax is

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Progressive

Regressive

Proportional

Both b and c

A Market situation where the number of buyers is very large and the number of sellers are very small is called.

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Perfect competition

Duopoly

Oligopoly

In perfect competition

The board pumps money out of the economy by

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Buying bonds

Selling bond

Creating cash

Lowering the reserve requirements.

If the % change in quantity demanded is more than % change in price coefficient of price elasticity is.

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>1

<1

=1

=zero

Horizontal integration may lead to internal economics of scale. Which of the following is not a type of internal economy of scale.

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Purchasing

Technical

Financial

Safety

For any square matrix A of order 'n' a +A is.

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Skew symmetric

Non skew symmetric

Symmetric

Non symmetric

When the quantity demanded is changed on the same price

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the demand curve shifts upward

The demand curve shifts downward

Movement on the same demand curve

None of these

Over time the price of primary products tends to fall because.

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Demand is income elastic

Supply is income elastic

Of outward shifts in supply

Demand is price elastic

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

in UDCs a potential resource of saving is

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Structural unemployment

Over employment

Domestic saving

Disguised unemployment

When total utility becomes maximum then marginal utility will be.

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Minimum

Average

Zero

Negative

A main advantage of specialization results from

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Economics of large scale production

The specializing country behaving as a monoploidy.

smaller production runs resulting in lower unit costs

High wages paid to foreign workers

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