Question # 1

If the % change in quantity demanded is more than % change in price coefficient of price elasticity is.

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>1

<1

=1

=zero

The equilibrium level of Y and I derived from the LM and IS equations above is.

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Y = 130 and I = 10%

Y = 200 and I = 30%

Y = 180 and I = 7%

Y = 250 and I = 2%

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

A price decrease and an increase in income are similar in that

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Both force the consumer to achieve a lower level of well being

Both force the consumer to reach a lower indifference curve

Both move the budget line outward

^{They are not similar at all}

Increase un employment benefits and less incentive to work would.

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Shift aggregate supply to the right

Shift aggregate supply to the left

Shift aggregate demand to the right

Shift aggregate demand to the left

A positive definite Hessian fulfills the second order conditions for

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Maximum

Minimum

Both maximum and minimum

Mini max

"Null set is proper subset of all the non nul sets" this statement is.

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Always true

sometimes true

Never true

True subject to some conditions

An increase in the expected rate of inflation would.

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shift the Philips curve upward

shift the phillips curve downward

Shift the long -run phillips curve to the right

Shift the long-run phillips curve to the left

Super Natural power, divinity, and gifts of nature are integral to the explanations of economic events developed by.

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Physiocrais

German historicists

Modern monetarists

Mercantilists

An increases in the value of the Rupee makes foreign goods cheaper relative to Pakistan goods, resulting in a _______ in net exports and a __ shift of the IS curve

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fall ; leftward

rise ; leftward

fall ; rightward

rise ; rightward

There are three fundamental questions every society must answer Which of the following is one of these questions.

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What goods and services are to be produced.

How are the good and services to be produced.

Who will get the goods and services what are produced.

All of the above

The two main characteristics of the production function are.

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It slopes downward from left to right and the slope become flatter as teh input increases

It slopes upward from left to the right the slope becomes steeper as the input increase

It slopes upward from left to right unput increases

It slopes downward from left to right and the slope becomes steeper ath the input increase

Given the cost data indicated in the table above the average variable cost of producing 7 units of output is

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Rs.37

Rs.29

Rs.31

Greater than Rs.37

If there is a price floor there will be

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Shortages

Surpluses

Equilibrium

None of these

A utility contour shows all the alternative combinations of two consumption goods that.

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Can be produced with a given set of resources and technology

Yield the same total of utility

Can be purchased with a given budget at given prices

Equate the marginal utilities of these goods and therefore make the consumer indifferent between them.

An expansionary monetary policy

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Reduces interest rates

Increases real output

Shifts the LM curve to the right

All of the above

In the UK mergers can be referred to the competition commission of they create a firm with _______ of the market.

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15%

20%

25%

30%

The price elasticity of demand measures

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The responsiveness of quantity demanded to a change in prie.

How far a demand curve shifts

A change in price

A change in quantity demanded

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

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A marginal revenue equals average total cost

Price equals marginal revenue

Marginal revue equals marginal cost

Total revenue equals total cost

Which of the following statements abut the relationship between marginal cost and average cost is correct.

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When MC is falling AC is falling

AC equals MC and MC'S lowest point

When MC exceeds Ac, Ac must be rising

When Ac exceed MC, MC must be rising

If British Residents want more French francs to purchases more fresh wine, other things equal than the equilibrium value of the pound against the French farce will.

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Rise

fall

not changes

fluctuate

If the Federal reserve conducts open market ________ the money supply _______ shifting the LM curve to the right.

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Purchases ; decreases

sales ; increases

purchases ; increases

sales ; decreases

Menu costs in relation to inflation refer to

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Costs of finding better rates of return

Costs of altering price lists

Costs of money increasing its value

Costs of revaluing the currency

Which of the following products will have an elastic demand.

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Flour

Cloth

Honda city

None of these

The multiplier that applies to changes in autonomous investment is identical to changes in.

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Autonomous government expenditures

Autonomous consumption expenditures

Autocoups exports

All of the responses above

Which is the most volatile component of aggregate demand.

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Net exports

Consumption

Investment

Government spending

What is the characteristic of the sample which is selected randomly.

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It is not average of the whole

It would be representative

It would not be equal to the population

All of the above

The notation of Relationship is important

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Dominations ecology

Deep ecology

Sympathy ecology

None of these

An increase in the wage rate.

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Will usually lead to more people employed

Will decrease total earnings if the demand for labour is wage elastic

Is illegal in a free market

Will cause a shift in the demand for labour

The equation for the IS curve is.

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Y = 55 - 50 i

Y = 175 - 75 i

Y = 300 - 100 i

Y = 275 - 25 i

An increases in the quantity of money supplied shifts the money supply curve to the _____and the LM curve to the

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right ; left

right ; right

left ; left

left ; right

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