1) Say's Law says that:

a) It the end there will be no general surplus in the economy

b) In the end there will be no general shortage in the economy

c) All of the above

d) None of the above

2) Say's Law was supported by

a) Classical Economist

b) Keynes

c) Monetary economist

d) All of the above

3) If total consumption expenditure goes down, then the aggregate demand will:

a) Increase

b) Decrease

c) Remain same

d) Increase then decrease

4) The critical assumption of classical economist, in advocating a self-regulating economy is:

a) Wages are flexible, prices are inflexible

b) Prices are flexible, wages are inflexible

c) Wages and prices are flexible

d) Wages and prices are flexible upward, but inflexible downward

5) When the economy is in a recessionary gap, the labor, market is in:

a) Shortage

b) Surplus

c) First shortage, then surplus

d) None of the above

6) When an economy is in a recessionary gap, it comes back to long run equilibrium through:

a) Change in dynamics in the labor market

b) Change in dynamics in other resource markets

c) Change in dynamics in the goods market

d) All of the above

7) Which of the following isn't a role of Central bank?

a) Lending to other commercial banks

b) Changing money supply for the government

c) Lending to private investors

d) Clearing cheques

8) Suppose consumption expenditure goes up by $1000. The final increase in aggregate demand is $5000. So the size of the multiplier is:

a) 4

b) 5.5

c) 5

d) 6

9) Potol Mia didn't get any pocket money from his daddy this week. He currently has Tk. 50 in his pocket. He then accidently gets a tear on his pant. He then borrows Tk. 500 from his friend Kuddus B., with that money he buys a new pair of pants. This is an example of:

a) Induced Consumption

b) Forced Consumption

c) Autonomous Consumption

d) Social Consumption

10) Kuddus B.'s Marginal Propensity to Consume (MPC) is 0.75. His Marginal Propensity to Save (MPS) is:

a)0.65

b)0.45

c)0.25

d)0.35