Deck 3: Macroeconomics, Production Functions and Keynesian Theory of Economics

Question 1

Keynesian aggregate supply curve is:

A)Perfectly elastic
B)Perfectly inelastic
C)Unitary elastic
D)Parabola

Answer 1

Perfectly elastic

Question 2

If marginal propensity to consume is 0.8, the value of multiplier will be:

A)1
B)2.5
C)5
D)2

Answer 2

5

Question 3

In a horizontal straight line demand curve, the price elasticity of demand is:

A)Unity
B)Infinity
C)Zero
D)Less than one

Answer 3

Infinity

Question 4

A simplified representation of a real situation is called:

A)Theory
B)Hypotheses
C)Evidence
D)Economic Model

Question 5

Returns to scale examines the production function in the:

A)Short-term
B)Medium term
C)Long term
D)Quinquinial