Question # 1

According to M.P Todaro model of ruler -urban migraton the migrationis assumed to be a.

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Social phenomenon

Cultural phenomenon

Uneconomic phenomenon

Economic phenomenon

If the rate of growth of a full employment labor forc eis 1.55 and 2.55 then the celling rate of growth of real GNP, according to Hick's theory of a constrained business cycle,is.

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1.5 %

2.55

4.0%

1.7%

In the long run an increase in consumer spending would cause output to ________ and the price level to.___________

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rise;rise

rise; stay; constant

stay constant ; stay constant

Stay constant ; rise

Lower interest rates are likely to.

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Decrease consumption

Increase cost of borrowing

Encourage saving

Increase spending

If saving rate is 12.0% , ICOR value is 3% and population Rate is 2.0% then the Growth Rate would be.

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2.0%

3.65

4.0%

6.0%

Consider the five panels of the figure on the previous page in which panel would fiscal policy be the strongest.

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Panel b

Panel c

Panel a

Panel d

Should international transpiration costs decrease, the effect on international trade would include a.

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Increase in the volume of trade

smaller gain from trade

Decline in the income of home producers

Decrease in the level of specialization production.

Which of the following is a normative statement in economics.

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More spending by the government reduces poverty

Higher taxes lead to less desire to work

the UK Economy is growing fast relative to other European Union members

The Government should concentrate on reducing unemployment

In pure competition.

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Strong rivaled exist

Cartels are formed

Both a and b

None of thes

Suppose velocity is constant and the real income elasticity of the demand for money is less than one then estimating inflation as money growth rate minus real growth rate.

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Overestimates inflation

Underestimates inflation

Is an erratic estimate of inflation

Remain an accurate estimate of inflation.

If desired spending in the economy exceeds income we would expect.

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House hold to save more

Firm to produce less

Firms is produce more

the MPC to change

Where there is an equal increase in net tax revenue and government spending, ceteris paribus.

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(C+I+G) is shifting upward

(C+I+G) is shifting downward

(C+I+G) does not shift

All of these

Industrial polices intended to foster comparative advantage for domestic industries could result in the implementation of.

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Research and development subsidies

Loan guarantees

Low interest rate loans

All of the above

GDP difference between GNP because.

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GDP = GNP - net factor payments from abroad

GNP = GDP -net factor payments from abroad

GDP = GNP -capital consumption allowances

GNP = GDP -capital consumption allowances.

The term of trade in Pakistan remained unfavorable regarding.

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Industrial sector

Services sector

Agricultural sector

All of these

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

In order of practice price discrimination which of the following is needed.

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Some degree of monopoly power

An ability to separate the market

An ability to prevent reselling

All of the above

Which of the following is a NOT component of M-2.

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Small time deposited

Money market mutual funds

Stocks

Checkable deposits

Cross -elasticity following commodities is very high

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Compliments

Normal

Goods substitutes

Good compliments

Women and non whiles on average receive lower comes than white men because.

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They tend to work in relatively unskilled jobs

Educational disadvantage

Firms are reluctant to invest in training

All of the above

In perfect competition there is.

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Many buyers

Many sellers

Homogeneous product

All of these

The MPS = 0.4 and government spending increases by 20 billion. The LM curve

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Shifts to the right by 20 billion

Shifts to the right by 50 billion

Does not shift

shifts to the left by 30 billion

The estimated regression coefficient for good Y indicates

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Goods X and Y are independent goods

Good Y is relatively elastic

Good Y is a luxury good

Goods X and Y are complementary goods

The impact and incidence of sales tax is

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On the consumer

On the seller

On the producer

None of these

Comparing a monopoly and a competitive firm the monopolist will.

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Produce less at a lower price

Produce more at a lower price

Produce less at a higher price

Produce less at a lower price

In Islamic economic system following means of gaining wealth are permitted

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smuggling

Hoarding

Gambling

None of these

The term of trade is given by theprices.

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Paid to all goods exported by the home country

Received for all goods exported by the home country

Received for exports and paid for imports.

Of primary products as opposed to manufactured products.

The nominal interest rate is 5% and the inflation rate is 2% the real interest rate is.

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2%

3%

7%

4%

The fact that the Production function relating output to capital becomes flatter as we move from left to right means that.

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The marginal product of labor is positive

The marginal product of capital is positive

There is diminishing marginal productivity of labor

There is diminishing marginal productivity of capital

A matrix with all elements zero other than all the diagonals is called.

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Diagonal matrix

Orthogonal matrix

Unit matrix

Column vector

Which of the following is a component of M1.

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Saving deposit

Credit card

Checkable deposit

Gold

The purpose of making assumptions in economic model building is to.

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Force the model to yield the correct answer

Minimize the amount of work an economist must do

simplify the model while keeping important details.

Express the relationship mathematically.

Demand for a normal product may shift outwards if.

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Price decreases

The price fo a substitute falls

the price of a complement rises

Income falls

When the marginal propensity to consume is 0.75 the multiplier has a value of.

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4

5

3

2

Extremality's arise because there is a divergence between ____ and _

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Private costs, private benefits

Private costs, social costs of benefits

Social cost, social benefit

Insiders, outsiders

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