Question # 1

Classical economics believe that in the short run.

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Money neutrality exists and prices adjust rapidly

Money neutrality does not exist and prices adjust rapidly

Money neutrality exists and prices do not adjust rapidly.

A competitive equilibrium is described by

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A price only

A quantity only

The excess supply minus the exceess demand.

A price and a quantity

Productivity can grow.

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If capital per hour of labor increases.

If there are no technological advances.

If capital per hour of labor decreases

If real GDP per hour labor decrease and capital per hour of labor increases.

(A+B) = (B+A) this law of matrices is known as.

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Cumulative law

Associative law

Distributive law

Identity law

Which of the following procedures is included in the process that produces a value for disposable personal income

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subtracting excies and sales taxes

Subtracting nonbusiness interest

Subtracting transfer payment from government.

subtracting income taxes

To adjust from gross National Product to Net National Product

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Deduct deprecation

Deduct indirect taxes

Deduct subsidies

Add inflation

In order to constitute an oligopolistic market structure.

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There must be a few firms in a given relevant market

There must be a few firms selling in a national market

There must be more than 20 firms selling in the international market

There must be fewer than 15 firm is any given market

Which of the following macro economic variables doesn't vary much ove the seasons.

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The nominal money stock

The unemployment rate

The real wage

Average labor productivity

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

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

An autonomous increase in the value of the domestic exchange rate.

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Increases output net exports and the interest rate.

Decreases output net exports and the interest rate

Decreases output and net exports and increases the interest rate.

Increase output and decreases net exports and the interest rate.

There are _______ major instrument of monetary policy.

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Three

Four

Five

None

An increase in the money supply other thighs equal shifts the ______ curve to the

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IS ; right

Is ; left

LM ; Left

LM ; right

In perfect competition the industry will be in equilibrium.

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when all the firms earning abnormal profit

When all the firms earning normal profit

All firms having loss

All firms having proft

About __________ of land is cultivated through irrigation water.

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75%

45%

60%

35%

Naveed purchases product M for which his income elasticity of demand is negative Apparently product M is.

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A necessity

An independent good

An inferior good

A luxury good

The dynamic aggregate demand schedule shifts rightward when there is an increase in.

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The expected rate of inflation ceteris paribus

The growth rate of the nominal money supply ceteris paribus

The income tax rate ceteris paribus

the current inflation rate celeries paribus

Law of variable proportion is also called.

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Law of non proportion returns

Law of substitution

Law of casts

Law of demand

If the Nominal GNP of an economy rose from Rs. 5000 to 5500 between 1985 and 1986 while the price index rose from 100 to 110 during the same period real GNP

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Fell by 10% from 1985 to 1986

Rose by 10% from 1985 to 1986

Remained constant from 1985 to 1986

Fell by 1% from 1985 to 1986

____________ represents the difference between what consumers have to pay for a product and what they are willing and able to pay.

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Producer surplus

Deadweight surplus

Government surplus

Consumer surplus

Indifference curves shows various combinations of.

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One commodity

Two

Three

All of these

Classical economics think general equilibrium is attained relatively quickly because.

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The real interest rate adjusts quickly

The level of output adjusts quickly.

The real wage rate adjusts quickly

The price level adjusts quickly.

according to factor price equalization theorem, if country A is labor abundant then once trade opens.

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Wages and rents should fall in A

Wages and rents should rise in A

Wages should rise and rents should fall in A

Wages should fall and rents should rise in A

Positive cross elasticities suggest that goods are ______ and negative cross elasticities that goods are.

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Substitutes, interior

Normal, complements

Substitutes, complements

Normal , interior

The arrangement where goods imported from trading partners in the developing world are subject to lower tariff rates than goods from other countries is referred to as.

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Normal trade relation status

Most favored nation status

Generalized system of preferences

"The impact on this monetary aggregate of extensive finance innovation -the changes in the kinds of deposits and services offered by banks led the central bank to drop M1 as a n intermediate target with the changes in the way the public was holding payments balances the M1 aggregate no longer that the same reliable link to.

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Tax rates

The money supply

Aggregate demand

Government spending

For a borrower an increase in the real interest rate will lead to.

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Higher current consumption and less borrowing

Higher current consumption and less saving

Lower current consumption and less borrowing

Lower current consumption and less saving

Guid up of foreign exchange reserves leads to.

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Decrease in money supply

increase in money supply

contraction in money supply

None of the above

For interior commodities income effect is.

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Zero

Negative

Infinite

Positive

When your grandmother keeps her savings hidden under her mattress she is using money as.

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a standard of deferred panyment

A comfortable thing for sleeping

A medium of exchange

A store of value

Which of the following is the government most likely to subsidies.

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Negative externalities

Positive externalities

Monopolies

O ligopojies

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