Top 80+ Solved Macroeconomics, Theories and Policies 2 MCQ Questions Answer
Q. In the Keynesian system speculative demand for money arises because of, 1 : uncertainty of future interest rate. 2 : unexpected expenditures. 3 : To bridge the gap between income and eventual expenditures.4 : Relationship between changes in the interest rates and bond price. Codes :
a. 1 & 3 are correct
b. 1 & 4 are correct
c. 2 & 3 are correct
d. 3 & 4 are correct
Q. The classical economists focused on the role of money as,
a. medium of exchange
b. medium of distribution
c. wealth
d. link between present and future
Q. Identify the correct chronological order of the following classical economists.
a. adam smith, malthus, ricardo, mill
b. adam smith, ricardo, malthus, mill
c. adam smith, mill, ricardo, malthus
d. adam smith, malthus, mill, ricardo
Q. Liquidity trap is a situation when,
a. all potential investors expect the rate of interest to rise in future.
b. all potential investors expect the rate of interest to fall in future.
c. natural rate of interest is above the critical rate of interest.
d. none of these
Q. Which of the following statements does not hold true in case of the Keynesian economics?
a. velocity of money is an unstable function of its determinant
b. labor is subject to money illusion
c. as function tends to become flat at levels of output well below full employment and to become steeper ad full capacity is reached
d. as schedule is vertical, and output, and employment are completely supply determine
Q. In whose economic theories, Malthus theories are in the base?
a. adam smith
b. ricardo
c. keynes
d. robin’s
Q. The formula to compute the spending multiplier is
a. 1/(mpc+mps)
b. 1/(1-mpc)
c. 1/(1-mps)
d. 1/(c+i)
Q. Liquidity trap sets a loop:
a. below which the discount rate cannot fall
b. above which discount rate cannot rise
c. below which the market rate of interest cannot fall
d. above which market rate of interest cannot rise
Q. Why does a temporary decrease in government purchases decrease labour supply in theclassical model?
a. people prefer to work less when government is doing less for them.
b. decreased government purchases make people worse off, so they work less hours.
c. the decrease in current or future taxes needed to pay for the decrease in government purchases increases people wealth
d. the fall in government spending decreases labour demand, decreasing the real wage, and sopeople decreases their labour supply.
Q. As the economy nears full employment the aggregate supply curve tend to
a. become flatter
b. become sleeper
c. shift to the left
d. shift to the right
Q. Using Keynesian multiplier, MPC= 0.8 and government spending increased by 40 billiondollars. How much will GDP increased?
a. 100 billion dollars
b. 200 billion dollars
c. 300 billion dollars
d. 500 billion dollars
Q. According to Keynesian analysis, the great depression was caused by:
a. a lack of spending
b. a sharp rise in the mpc
c. too much investment
d. too much foreign influence on the economy