Top 80+ Solved Macroeconomics, Theories and Policies 2 MCQ Questions Answer
Q. The purpose of Keynesian analysis is to explain what to determines the
a. size of the labor force
b. price level
c. amount of money required in the economy
d. levels of national income, output and employment
Q. In the Keynesian range of the SRAS, if AD shift to the right, then
a. the price level falls
b. the price level rises
c. real gdp is unchanged
d. the price level is unchanged
Q. In the very short term, in the Keynesian model which of the following is fixed and does notchange when GDP changes
a. planned investment
b. planned consumption
c. planned imports
d. all of the above
Q. The slope of the consumption function is (Keynesian)
a. less than the slope of the 45 degree line, but not equal to zero
b. greater than the slope of the 45 degree line
c. equal to the slope of the 45 degree line
d. equal to zero
Q. A decrease in expected future income, ______ consumption expenditure and ______ saving.
a. increases: increases
b. increases: decreases
c. decreases: increases
d. decreases: decreases
Q. If the aggregate supply curve is perfectly elastic as in the Keynesian model at low level ofnational incomes, as increase in AD will cause an increase in
a. the rate of inflation
b. the level of real national output
c. the government budget deficit
d. the level of consumer debt
Q. Attempts to force inflation below no-accelerating inflation rate of unemployment (NAIRU)will cause:
a. inflation accelerate without any change in employment or output
b. inflation to decelerate with rising employment and output
c. inflation to decelerate with employment and output remaining the same
d. inflation to remain unchanged with fall in employment and output
Q. Which of the following is true with respect to the monetary approach to the balance ofpayments?
a. it views the balance of payments as an essentially monetary phenomenon
b. a balance of payments deficit results from an excess demand of money in the nation
c. a balance of payments surplus results from an excess supply of money
d. balance of payments disequilibrium are not automatically corrected in the long run
Q. According to monetarists, money supply constitutes
a. currency+ demand deposits
b. currency +demand deposits+time deposits
c. currency + demand deposits + equity shares
d. currency + all kinds of banks + deposits with other institutions + borrowing
Q. According to monetary approach a revaluation of a nation’s currency
a. increase the nation’s demand for money
b. increase the nation’s supply of money
c. reduces the nation’s demand for money
d. reduces the nation’s supply of money
Q. what is the foundation of monetarism?
a. quantity theory of money
b. demand theory
c. islm model
d. none of these
Q. The economist who proposed that,” inflation is always and every where monetaryphenomenon”was
a. j. m keynes
b. john r hicks
c. milton friedman
d. franco modigliani
Q. Suppose that the money stock is $10 billion, each dollar generates $ 5worth of spending, andthe NAIRU is 7%. According to the quantity theory of what is nominal GDP (income)
a. $ 350 million
b. $ 70 million
c. $ 35 million
d. $ 50 million
Q. When there are vacancies in the job-market, but also high levels of unemployment, then wecould say that this unemployment is?
a. cyclical
b. regional
c. seasonal
d. structural
Q. Demand-side unemployment is partly caused by:
a. imperfections in the labour market
b. occupational and geographic immobility of factors
c. demographic changes
d. a lack of aggregate demand