2 Q.5 If prices increase by 10% from one year to next, then the price index for "base year" IS----,. and assuming that the first year is the base year, the price index of the next year is----- 1- Iyer ( Bareyear) cure. a) 100, 110 10% " rent yea (PI) 100, 120 c ) 110, 100 d) 120, 150 . Q.6 Which one of the following is NOT the use of price index? a) To define the general price level of an economy b) To measure the changes in prices from one year to anotherx To define the inflation rate of an economy % d) all of the above are uses of price index, so none of the above answers are correct. Q.7 Federal Funds Rate is the interest rate charged by--- for its loans to ----- a) Federal Reserve Bank, financial institution one financial institution, another financial institution financial institution, best customers financial institution, Federal Reserve Bank Q.8 If interest rate is flexible, -----market is guaranteed to be in equilibrium. This is the main conclusion of----theory a) labor, classical economic money or capital, loanable funds commodity, loanable funds labor, loanable funds e) money or capital, Say's law. Q.9 Which one of the following is NOT called the price index in USA? a) Consumer Price Index (CPI) b) Producer Price Index (PPI) C ) GDP Deflator d) General Price Index (GPI) Q.10 The classical economists were writing before----, and the best policy for the government (according to those classical economists) was called------ a) 1950s, Laissez faire b) 1930s, Laissez faire c) 1970s, big push policy