Question # 1

According to Keynes, when the great depression started the government should be.

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Done nothing

Decreased the money supply

Had a large increase in government spending.

Enacted high tariffs such as the smoot Hawley tariff

The equation for a givne production function is Q = K2 + KL, initially K = 2 and L = 1 if the value of both inputs is doubted the production function exhibite.

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Increasing returns to scale

Diseconomies of scale

Constant returns to scale

Economies of scale

In Islamic economic system holding is considered against the right of.

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Entrepreneurs

Labour

Consumers

Producers

A widely used indicator to differentiate developed countries from developing countries.

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International trade per capita

Real income per capita

Unemployment per capita

Calories per capita

The most important source of wage differentiate are.

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Reginal variation

Unionization

Relative danger

Skills

In the short run the competitive firm will produce if.

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Price is equal to marginal cost

Price is equal to marginal revenue

Price is equal to total cost

Price is equal to are greater than average variable cost.

A monolithically competitive market is characterized by all of the following except.

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Easy entry

Differentiated product

Excess capacity

Economic profit in the long run

Government policies that focus on increasing production rather than demand are called.

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Fiscal policies

Monetary policies

Incomes policies

Supply side policies

The least common type of transaction in the foreign exchanges is a.

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Forward transaction

Spot transaction

Swap transaction

None of the above

The classical are of the view that utility can be.

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Ranked

Counted

Expressed in numbers

Not counted

Company X sells Rs.75 million dollars of 9.5% first mortgage bonds at par The company's marginal tax rate to 30% The after tax cost of debt is.

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2.85%

3.175

6.68%

7.55

In the short run firm in perfect competition will still produce provided.

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The price covers average variable cost

The price covers variable cost

The price covers average fixed cost

The price covers fixed cost

Alfred Marshall formalized and then popularized the analytical technique known as

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General equilibrium analysis

Felicific calculus

Partial equilibrium analysis

Differential equations

Objectivity, generality, systematic and quality are the characteristics of.

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Case study

Projective technique

Narrative method

Content analysis

A rise in planned investment spending unrelated to the interest rate causes teh equilibrium level of aggregate output to __________ at shifts the _____ curve to the _______

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rise ; LM ;right

rise ; IS ; right

Fall ; LM ; left

rise ;IS; right

import substitution is the replacement of ________ by domestic production under the protection of.

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exports, subsidies

Exports, patents

imports, high tariffs or import quotes

Imports, subsidies

Sum of squares of the deviations about mean is.

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Maximum

Minimum

zero

one

The competitive firm maximizes its profit by operating where

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Average costs are at a minimum

Total revenue is at a maximum

Profit per unit is at a maximum

Marginal cost equals price

If X becomes more expansive i relation to Y, what happens to the budget line in the X - Y space, with Y on the vertical axis.

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It shifts to the right

It shifts to the left

The slope becomes flatter

The slope becomes steeper

In substitution effect a consumer

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Shifts away from the commodity which price has risen

shifts in favor of commodity which price has risen

shifts away from the commodity which price has fallen

None of these

If the price in a market is fixed by the government above equilibrium.

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There is excess equilibrium

There is excess supply

There is excess demand

There is equilibrium

The effect of the most favored nation clause is to

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Eliminate at tariffs between countries.

Increase all tariff rates between countries

Maintain a nondiscriminatory structure of tariffs

Marlein a discriminatory structure of tariffs.

If your income during one year is L 10,000 ad the following year it is L,12,000 then it has grown by

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20%

2%

12%

15%

An increase income will

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Lead to a movement along the demand curve

Shift the supply curve

Shift the demand curve

Lead to an extension of demand

Given fixed change rate assume Pakistan initiates expansionary monetary and fiscal polices to combat recession these policies will also.

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Increase both imports and exports

Increase exports and reduce import

Reduce a balance of payments surplus

Reduce a balance of payment deficit

When the value of the Rupee rises Pakistan goods become _____ expensive relative to foreign goods which ___ exports.

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more ; iincreases

less ; increases

more ; decreases

more ; increases

Economic development in UDCs is not possible without.

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Foreign aid

Capital formation

Natural resources

Domestic saving

Starting from a position where the nation's money demand equals the money supply and its balance of payments is it equilibrium, economic theory suggest that the nation's balance of payments would more into a surplus position if there occurred in the nation a.

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Decrease in the money supply

Increase in the money supply

Decrease in the money demand

any of the above

If every element of a raw of column of a square matrix A is zero, then the value of the determinant. is.

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Equal

One

zero

Not equal

Disposable income is obtained by subtracting ________ taxes from personal income

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Indirect taxes

Direct taxes

Subsidies

None

Which is the most volatile component of aggregate demand.

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Net exports

Consumption

Investment

Government spending

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