Question # 1

In Vann diagram the universal set is represented by

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Points within a rectangle

Points within a circle

Both a and b

None of these

Skilled labour is relatively scarce because.

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There are too few teachers

Too few student places in higher education

It is costly to acquire human capital

Teachers salaries are too low

Real business cycle theories suggest that _____ to correct departures from the desired growth path.

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There is a role of fiscal policy

There is a role for monetary policy

There is a role for supply side policies

There is no case for stabilizing output over the business cycle.

The quantity theory of money says that changes in ______ lead to equivalent changes in ______ but have no effect on.

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Prices, wages, output and employment.

Output, prices, employment

Nominal money, the price level output and employment.

Nominal money output prices

Usury is prohibited in

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Islam only

Sikhism only

Jewism

Both a and b

As the required reserve ratio is decreased the money multiplier.

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Could either increase or decrease

Remains the same as long as banks hold no excess reserves

Increase

Decreases

The Root Mean square Error for the actual sales and sales forecast for 1985 and 1986 is.

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20.2

19.9

14.7

17.2

Debit (-) items in the balance of payments correspond to anything that.

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Involve receipts from foreigners

Involves payments to foreigners

Increase the domestic money supply

Decrease the demand for foreign exchange

The economic logic behind granting central bank's independence from governmental the conduct of monetary policy is.

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To eliminate seignior age

To allow open market operations

To enhance the credibility of monetary policy.

None of the above

A function where a variable x can only very in jumps, is often called.

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Non linear functions

Inverse function

Step function

All of above

An outward shift in the marginal efficacy of capital should.

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Decrease consumption

Increase aggregate demand

Reduce aggregate supply

Slow economic growth

Snowball sampling is used for data collection through.

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Connecting relations

Small population

Representatives

None of the above

A mathematical expression relating the amount of output produced to quantities of capital and labor utilized is the

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Real interest rate

Production function

Productivity relation

Marginal product

In the absence of international capital controls, central banks set ______ to provide the correct incentive for speculators

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Money supply targets

Income policy

Interest rates

Inflation targets

Projects A,B,C,D,E cost Rs. 100, Rs, 200, Rs. 300, Rs. 400, and Rs. 500 with MEC's of 0.07, 0.06,0.09 ,0.10 and 0.11 respectively. The market rate of interest is 8% Total investment spending is

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Rs. 1500

Rs.1300

Rs.1200

Rs.300

Over human interruption in nature will cause.

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Disorder

Calmness

Order

None of these

A decline in planned investment spending unrelated to the interest rate focuses the equilibrium level of aggregate output to ________ and shifts the _ curve to the _______

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rise; Lm ; RIGHT

RISE ; is; right

fall ; IS; Left

rise ; LM; left

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

Which of the following organizations primarily provides long term loans to developing countries to help them develop their infrastructure such as schools hospitals and roads.

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World Bank

International Monetary fund

Council on foreign Relations

Organization of petroleum exporting countries

If a government imposed price celling causes the observed price in a market to be below the equilibrium price.

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There will be excess demand

There will be excess supply

The curves will shift to make a new equilibrium at the regulated price

None of the above

A checking deposit held at a commercial bank is considered ______ of that bank.

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An asset

Net worth

a liability

Capital

The efficiency wage model can be modified to allow real wages to vary over the business cycle by assuming that.

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Workers effort may depend on the unemployment rate and the real wage

During a recession labor supply will decrease reducing the efficiency wage

During a recession productivity wil fall causing a reduction in the efficiency wage

During a boom labor demand will increase, causing the efficiency wage to rise

The current account includes

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The value of trade in merchandise

Services

Unilateral transfers

All of the above

When plotted with the aggregate price level on the vertical axis and output on the horizontal axis, the long run aggregate supply curve.

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slopes upward

Sloped downward

Is vertical

Is horizontal

What characteristics is likely to increase population grotwth.

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Family planning programs

Old age social security

Lack of women's empowerment

Rapid economic growth

The measure used to examine the distribution of wealth at the world level is.

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Gini coefficient

Lorenz curve

Philips curve

None of these

World environment Day is

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May 5

June 5

July 5

February 5

any number raise to the power zero is always equal to.

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zero

one

two

The number itself

The use of micro economics policies to smooth or moderate the business cycle is known as.

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Aggregate demand management.

Aggregate supply management

Automatic stabilization

Discretionary policy

Which industrialization policy have developing countries used which places emphasis on the comparative advantage principle as agued rto resource allocation.

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Export promotion

Import substitution

International commodity agreements

Multiateral contracts

When all of the debit or credit items in the balance of payments are combined

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Merchandise imports equal merchandise exports

Capital imports equal capital exports

Services exports equal service imports

the total surplus or deficit equals zero

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