Question
1.)Induced investment and rate of interest has Select one: a.High relationship b.Inverse relationship c.Positive relationship d.No relationship 2.) What happens to the consumption function if
1.)Induced investment and rate of interest has
Select one:
a.High relationship
b.Inverse relationship
c.Positive relationship
d.No relationship
2.) What happens to the consumption function if overall spending decreases?
Select one:
a.shifts downwards
b.shifts upwards
c.becomes steeper
d.becomes flatter
3) Which factor would shift the Aggregate Demand curve to the right?
Select one:
a.Appreciation of the dollar.
b.Increase in real wages.
c.Increase in real incomes due to a rise in GDP
d.Fall in interest rates, which increases investment.
4) Stagflation occurs when the economy experiences
Select one:
a.falling prices and falling output.
b.rising prices and falling output.
c.rising prices and rising output.
d.falling prices and rising output.
5.) Which of the following will not cause a shift in aggregate supply
Select one:
a.level of government spending
b.incentives
c.cost of factors of production
d.structure of economy
6.) A government might use tax to?
Select one:
a.Discourage consumption of discretionary goods
b.Discourage consumption of exports
c.Discourage consumption of transport
d.Discourage consumption of essential goods
7.) Difference between real GDP and nominal GDP is?
Select one:
a.nominal GDP only accounts for citizens
b.nominal GDP uses actual price levels
c.nominal GDP uses price levels of the base year
d.nominal GDP is at the market prices where as real GDP is at constant prices
8.) What is the cause of inflation?
Select one:
a.Both money supply and production decreases.
b.If money supply increases.
c.If money supply increases and production falls.
d.If the production rate falls.
9.) If the economy is on the LM curve but not on the IS curve, then we know that
Select one:
a.the money market and goods market are in equilibrium, but not the bond market.
b.the good market is in equilibrium, but not the money market.
c.the money market and bond markets are in equilibrium, but not the goods market.
d.the money, bond and goods markets are all in equilibrium
10.) When LM curve is at equlibrium in the money market, increase in the money supply will
Select one:
a.increase the interest rate and also increase the holding of money for speculative purpose
b.lower the interest rate and lower the holding of money for speculative purpose
c.lower the interest rate, increase money holding for speculative purpose.
d.increase the interest rate and increase the money holding for speculative purpose
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