Top 150+ Solved Managerial Economics MCQ Questions Answer

From 121 to 135 of 173

Q. In the real business cycle model, business cycles are

a. Efficient and do not represent lost output

b. Driven by technology shocks

c. Occur when markets clear

d. All of the above

  • d. All of the above

Q. Real business cycle proponents argue that

a. Recessions are caused by movements of output away from the natural rate of output

b. Prices and wages are sticky

c. Macroeconomics should be based on the same assumptions as microeconomics

d. Monetary policy is important in determining recessions

  • c. Macroeconomics should be based on the same assumptions as microeconomics

Q. Which of the following statements are correct? In (the)

a. Keynesian model, unemployment is voluntary.

b. Real business cycle model, all unemployment is voluntary

c. New classical models, there is voluntary unemployment

d. Both b&c

  • d. Both b&c

Q. The aggregate production function for real business cycle models is shown as

a. Yt=F(Kt,Nt)

b. Yt= Zt F(Kt - Nt)

c. Yt= Zt F(Kt,Nt)

d. Yt=Zt / (Kt,Nt)

  • c. Yt= Zt F(Kt,Nt)

Q. In real business cycle models and new classical models

a. Monetary factors are responsible for fluctuations in output and employment

b. Changes in unemployment are involuntary

c. Markets always clear

d. Prices and wages are perfectly flexible

  • d. Prices and wages are perfectly flexible

Q. Which of the following shocks have been emphasized most often with respect to real business cycle story?

a. Shocks to technology

b. Variations in environmental conditions

c. Changes in the real(relative) prices of imported raw materials

d. Changes in tax rates

  • a. Shocks to technology

Q. In the new Keynesian models,

a. Imperfect competition comes is the result of optimizing behavior by individuals

b. Perfect competition is assumed with respect to the product market

c. A natural monopoly is presumed for the product market

d. Both a and c

  • a. Imperfect competition comes is the result of optimizing behavior by individuals

Q. Which of the following cannot be used to justify efficiency wages

a. Sticky price(menu cost) models

b. Turnover costs

c. Worker shirking

d. Worker morale

  • a. Sticky price(menu cost) models

Q. In any efficiency wage model it must be true that

a. The marginal benefit of increased efficiency is equal to the marginal cost of higher wages

b. Nominal wages are inflexible

c. Disequilibrium in the labor market exists

d. All of the above

  • d. All of the above

Q. With respect to efficiency wage models the efficiency of workers depends

a. Positively on the money wage they are paid

b. Positively on the real wage paid

c. Inversely on the age of the workers

d. Positively on the unemployment rate

  • b. Positively on the real wage paid

Q. New Keynesian would agree with all of the following except

a. Stabilization policy can reduce the severity of business cycles

b. Wages and prices are sticky

c. Markets are perfectly competitive

d. Market equilibrium is often suboptimal

  • c. Markets are perfectly competitive

Q. In real business cycle models, business cycles are caused by ------------------,while in new Keynesian model business cycles are caused by-------------------

a. Aggregate demand ; Aggregate demand

b. Aggregate demand ; Aggregate supply

c. Aggregate supply; Aggregate demand

d. Fiscal policy ; monetary policy

  • c. Aggregate supply; Aggregate demand

Q. Which of the following models view changes in real supply-side factors as determinantsof short-run fluctuations in output and employment?

a. New classical models

b. Political business cycle models

c. Keynesian models

d. Real business cycle models

  • d. Real business cycle models

Q. An example of negative productivity shocks that could cause recessions is

a. A hurricane which destroys capital

b. A decrease in the price of oil

c. Reductions in defense spending

d. All of the above

  • a. A hurricane which destroys capital
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