Question # 1

Fiscal policy is purposeful movements in _____designed to direct an economy

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Interest rate

Legal structures

Government regulations

D Government spending and taxes

In a "Lorenz curve diagram absolute equality in income distribution would appear as.

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A curved line well bowed out from the diagonal

A curved line close to the diagonal

A right angled line

A diagonal line

The 1959 land reforms fixed the celling in the private ownership of land of 500 acres irrigated and ______ acres un irrigated.

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750

800

1000

None of these

The goal of a pure market economy is to best meet the desires of.

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Consumers

Companies

Workers

The government

The long run foreign exchange rate between the U.S. and Japan is 200 Yen =Rs. 1 under a floating exchange rate Which of the following does 112 t occur if the Federal Reserve reduce the money supply in order to prevent the occurrence of inflation.

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Foreign capital flows to the U.S.

The U.S. dollar appreciates

Real net exports decline

American real GNP experience a slower rate of growth

Rapid increases in the price level during periods of recession or high unemployment are known as.

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Slump

Stagnation

Stagflation

Inflation

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

The marginal product of labor

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Is measured by the slope of the production function relating capital of employment

Is larger when the labor supply is relatively larger

Is smaller when the labor supply is relatively smaller

Decreases as the number of workers already employed increases

An autonomous decline in the value of the Pakistan Rupee makes Pakistan goods _______ relative to foreign goods and results in a ______ in net exports.

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Cheaper ; decline

Cheaper ; rise

dearer ; decline

dearer ; rise

In the cost of slugger rises and slugger is major ingredient in jelly beans then the jelly bean.

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Demand curve shifts to the left

Supply curve shifts to the left

Supply curve shifts to the right

Demand and supply curves both shift to the right

A firm that is a price taker faces a perfectly

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Elastic supply curve

Inelastic demand curve

Elastic demand curve

In elastic supply curve

According to Keynes the exogenous factors like technology increase in population and discovery of new markets are the reasons. of.

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Underemployment

Structural dualism

Low capital formation

Secular stagnation

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

In the short run the level of floating exchange rates is determined mainly by.

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Interest rates

Competitiveness

Trade

Speculation

In the ERM, each country fixed ___ against each other ERM participant collectively the group._____ against the rest of the world.

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A nominal exchange rate, floated

A real exchange rate, pegged

a purchasing power parity, pegged

a real exchange rate, floated

A nation wishing to reduce its current account deficit would be advised to.

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Engage in more government spending.

Reduce government taxes

Increase private investment spending

Decrease domestic consumption spending

A tariff that prohibits imports has only

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a revenue effect and redistribution effect

Revenue effect and protection effect

Consumption effect and protection effect

Redistribution effect and consumption effect

Which of the following factors will cause the demand curve for labor to shift to the right.

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The demand for the product produced by labor declines.

The prices of substitute imputes falls

The productivity of labor increases

None of the above

The natural rate of unemployment is generally thought of as the

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Ratio of the frictional unemployment rate to the cyclical unemployment rate.

Sum of fictional unemployment and cyclical unemployment.

Sum of frictional unemployment and structural unemployment.

sum of structural unemployment and cyclical unemployment.

In order to maximize profits a monopoly company will produce that quantity at which the.

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Marginal revenue equals average total cost

Price equals marginal revenue

Marginal revenue equals marginal cost

total revenue equals total cost

If the price of automobiles were to increase substantially the demand curve for gasoline would most likely

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Shift leftward

Shift right ward

Become flatter

Become steeper

To avoid double counting when the GNP is estimated, economists

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Price all goods and services bought and sold in all markets

Use the GNP deflator

Price only intermediate goods

Calculate value added at each stage of production.

A square matrix with 1's in its principal diagonal and zeros every where else is.

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Diagonal matrix

Identity matrix

Leading diagonal

Scalar matrix

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 ______ and the equilibrium level of aggregate output to ______

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up ; rise

up ; fall

down ;rise

down ; fall

In the monetary base is increased by $1,000 and the reserve requirement is 10% by how much will the money supply be increased.

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$100

$1,000

$5,000

$10,000

Logical rezoning process consists of induction and

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Generalization

Deduction

Verifiability

Observation

World trade has been increasing due to.

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Increased tariffs

Increased legal barriers

Increased embargoes

Reduced protectionism

Indifference curve is alwyas.

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Vertical

Horizontal

Concave

Convex

What the process of summarizing raw data and displaying them on compact statistical table for further analysis.

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Statistical analysis

Data processing

Tabulation

Table construction

An increase in the rate of inflation which is not accompanied by any change in the volume of consumer goods sold will automatically increase the.

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Revenue from value added tax

Level of company profits

Level of unemployment

Average level of wages

Which of the following is the most liquid.

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A savings account

A 6 months CD

A home

Water

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