Question 1

According to Keynes, rising aggregate income is always associated with

Accepted Answer

A) Higher saving rate 
B) Higher import 
C) Lower export 
D) Low production 
A) Higher saving rate 
B) Higher import 
C) Lower export 
D) Low production A

Question 2

Simultaneous equilibrium in the money (LM) and goods (IS) market exists:

Accepted Answer

A) At an unlimited number of output levels and rates of interest 
B) At only one output level and rate of interest 
C) At an unlimited number of output levels and only one rate of interest 
D) At only one output level and an unlimited number of rates of interest 
A) At an unlimited number of output levels and rates of interest 
B) At only one output level and rate of interest 
C) At an unlimited number of output levels and only one rate of interest 
D) At only one output level and an unlimited number of rates of interest B

Question 3

In a closed economy, the value of multiplier , when MPC is 0.90

Accepted Answer

A) 25 
B) 90 
C) 10 
D) 9 
A) 25 
B) 90 
C) 10 
D) 9 C

Question 4

The monetary policy is completely ineffective when the LM curve is:

Accepted Answer

A) Vertical . 
B) Horizontal. 
C) Upward sloping. 
D) Downward sloping 
A) Vertical . 
B) Horizontal. 
C) Upward sloping. 
D) Downward sloping

Question 5

Income is a ------- variable

Accepted Answer

A) Flow 
B) Discontinuous 
C) Stock 
D) None of the above 
A) Flow 
B) Discontinuous 
C) Stock 
D) None of the above

Question 6

Market does not clear is a proposition of:

Accepted Answer

A) Neoclassical theory. 
B) Keynesian Economics 
C) Monetarism 
D) Rational expectations 
A) Neoclassical theory. 
B) Keynesian Economics 
C) Monetarism 
D) Rational expectations

Question 7

Ratio of consumption expenditure to any particular level of income

Accepted Answer

A) MPS 
B) APS 
C) APC 
D) MPC 
A) MPS 
B) APS 
C) APC 
D) MPC

Question 8

When investment is negatively related to the rate of interest, equilibrium output in the goods market:

Accepted Answer

A) Is unrelated to the rate of interest 
B) Is inversely related to the rate of interest 
C) Is positively related to the rate of interest 
D) Falls as the rate of interest decreases 
A) Is unrelated to the rate of interest 
B) Is inversely related to the rate of interest 
C) Is positively related to the rate of interest 
D) Falls as the rate of interest decreases

Question 9

When MPS = 0.2, MPC will be

Accepted Answer

A) 0.8 
B) 0.2 
C) 1.2 
D) 20 
A) 0.8 
B) 0.2 
C) 1.2 
D) 20

Question 10

Changes in the subjective or objective factors

Accepted Answer

A) Never affect consumption function 
B) Always cause downward shift in consumption function 
C) Always cause upward shift in consumption function 
D) They cause upward or downward shifts in consumption function 
A) Never affect consumption function 
B) Always cause downward shift in consumption function 
C) Always cause upward shift in consumption function 
D) They cause upward or downward shifts in consumption function

Question 11

Policy Neutrality is the main proposition of:

Accepted Answer

A) Supply Side Economics. 
B) Keynesian Economics 
C) Monetarism 
D) Rational expectations hypothesis 
A) Supply Side Economics. 
B) Keynesian Economics 
C) Monetarism 
D) Rational expectations hypothesis

Question 12

Who invented the General Equilibrium analysis?

Accepted Answer

A) L. Walras. 
B) W. Leontief 
C) J.M.Keynes. 
D) None of these. 
A) L. Walras. 
B) W. Leontief 
C) J.M.Keynes. 
D) None of these.

Question 13

In which of the following situations will an increase in the money supply have no effect upon output?

Accepted Answer

A) LM is steeply sloped and IS is steeply sloped 
B) LM is vertical and IS is steeply sloped 
C) LM is steeply sloped and IS is vertical 
D) LM is relatively flat as is IS 
A) LM is steeply sloped and IS is steeply sloped 
B) LM is vertical and IS is steeply sloped 
C) LM is steeply sloped and IS is vertical 
D) LM is relatively flat as is IS

Question 14

Employment equilibrium in the Classical theory is achieved through:

Accepted Answer

A) Wage-Price flexibility. 
B) Changes in aggregate demand 
C) Changes in aggregate supply 
D) None of these. 
A) Wage-Price flexibility. 
B) Changes in aggregate demand 
C) Changes in aggregate supply 
D) None of these.

Question 15

The interest rate paid on bonds is known as:

Accepted Answer

A) Call rate 
B) Coupon rate 
C) Repo rate 
D) Bank rate 
A) Call rate 
B) Coupon rate 
C) Repo rate 
D) Bank rate

According to Keynes, rising aggregate income is always associated with

Simultaneous equilibrium in the money (LM) and goods (IS) market exists:

In a closed economy, the value of multiplier , when MPC is 0.90

The monetary policy is completely ineffective when the LM curve is:

Income is a ------- variable

Market does not clear is a proposition of:

Ratio of consumption expenditure to any particular level of income

When investment is negatively related to the rate of interest, equilibrium output in the goods market:

When MPS = 0.2, MPC will be

Changes in the subjective or objective factors

Policy Neutrality is the main proposition of:

Who invented the General Equilibrium analysis?

In which of the following situations will an increase in the money supply have no effect upon output?

Employment equilibrium in the Classical theory is achieved through:

The interest rate paid on bonds is known as:

Consumer Theory and Utility

Indifference Curve Analysis and Consumer Theory

Cost Theory and Production Possibility Curve Analysis

Classical Economic Theory

Macroeconomic Theory and Models

Keynesian Economics and Related Concepts

National Income and Keynesian Economics

Economics and Economic Theory

Economic Concepts and Theories

Macroeconomics and Economic Theories

Economics and Economic Methods

Economics and Social Science

Production and Costs

Demand Analysis and Utility Theory

Indifference Curves, Ordering, Wealth of Nations, and More

Economics Questions on Demand and Supply

Elasticity of Supply and Demand

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Exam 6: Macroeconomic Equilibrium and Concepts

According to Keynes, rising aggregate income is always associated with

Simultaneous equilibrium in the money (LM) and goods (IS) market exists:

In a closed economy, the value of multiplier , when MPC is 0.90

The monetary policy is completely ineffective when the LM curve is:

Income is a ------- variable

Market does not clear is a proposition of:

Ratio of consumption expenditure to any particular level of income

When investment is negatively related to the rate of interest, equilibrium output in the goods market:

When MPS = 0.2, MPC will be

Changes in the subjective or objective factors

Policy Neutrality is the main proposition of:

Who invented the General Equilibrium analysis?

In which of the following situations will an increase in the money supply have no effect upon output?

Employment equilibrium in the Classical theory is achieved through:

The interest rate paid on bonds is known as:

Consumer Theory and Utility

Indifference Curve Analysis and Consumer Theory

Cost Theory and Production Possibility Curve Analysis

Classical Economic Theory

Macroeconomic Theory and Models

Keynesian Economics and Related Concepts

National Income and Keynesian Economics

Economics and Economic Theory

Economic Concepts and Theories

Macroeconomics and Economic Theories

Economics and Economic Methods

Economics and Social Science

Production and Costs

Demand Analysis and Utility Theory

Indifference Curves, Ordering, Wealth of Nations, and More

Economics Questions on Demand and Supply

Elasticity of Supply and Demand

Filters