Macroeconomics (ECO403)

1. A lower average money holding means more frequent trips to the bank to withdraw smaller amounts of cash. This causes:

   1. Menu cost of inflation.
   2. Shoe leather cost of inflation.
   3. General inconvenience.
   4. Relative price distortions.

2. Which of the following factors encourage technological progress?

   1. The patent system.
   2. Tax incentives for research and development.
   3. Government subsidies for research.
   4. All of the given options.

3. Which of the following expenditures are counted as part of government consumption and investment?

   1. Transfer payments
   2. Interest payments on the government debt
   3. Expenditures by state and local governments
   4. Social Security benefits

4. The circular flow is used to make the point that:

   1. Households are both earners and spenders.
   2. Production generates income.
   3. Unemployment only occurs during a recession.
   4. Rising prices never occur during times of unemployment.

5. If S-I and NX are exactly equal to zero i.e the value of imports equals the value of exports then:

   1. We have trade surplus.
   2. We have trade deficit.
   3. We have balance trade.
   4. We have no trade at all.

6. Suppose nominal GDP grew from Rs.12,0000 to Rs.14,0000 in 3 years. Over the same 3 years, the inflation rate was exacly 4 percent each year. Which of the following is TRUE about output for this economy over these 3 years?

   1. Output stayed the same.
   2. Output grew, but less than 4 percent.
   3. Output grew by 4 percent.
   4. Output fell.

7. An increase in investment is most likely to be caused by:

   1. Lower interest rates.
   2. Lower national income.
   3. A decrease in the marginal propensity to consume.
   4. An increase in withdrawals.

8. According to Solow model, all other things unchanged, countries with rapidly growing population will tend to:

   1. Be poorer than countries with lower population growth.
   2. Grow slower than countries with lower population growth.
   3. Have lower marginal products of capital than countries with lower population growth.
   4. Be richer than countries with lower population growth.

9. The Golden Rule level of capital accumulation k*gold denotes the steady state with the heighest:

   1. Level of consumption per worker.
   2. Level of output per worker.
   3. Growth rate of consumption per worker.
   4. Growth rate of output per worker.

10. All of the following are categories of national income EXCEPT:

    1. Net interest
    2. Rental income
    3. Corporate profits
    4. Depreciation

11. The difference between exports and imports in determining the GDP is known as the:

    1. Net exports.
    2. Import tariffs.
    3. Net imports.
    4. Net income.

12. In the Solow growth model, persistent increases in standards of living are due to which of the following?

    1. Technological progress, which leads to sustained growth in output per worker.
    2. A high saving rate, which leads to sustained high rates of growth.
    3. A high rate of population growth, which leads to a larger labor force.
    4. All of the given options.

13. The change in total product of labor resulting from a change in a labor input is known as:

    1. Marginal product of capital.
    2. Average product of labor.
    3. Average product of capital.
    4. Marginal product of labor.

14. Which of the following equations is correct?

    1. Real exchange rate = (exchange rate + domestic price level) / foreign price level
    2. Exchange rate = (real exchange rate × domestic price level) / foreign price level
    3. Exchange rate = (nominal exchange rate × domestic price level) / foreign price level
    4. Real exchange rate = (nominal exchange rate × domestic price level) / foreign price level

15. The Slow residual measures:

    1. The average growth rate of productive inputs less an adjustment for technological progress.
    2. The part of the growth of output not attributable to the growth of inputs.
    3. The share of net product that constitutes real capital income.
    4. The dynamic efficiency of an economy.

16. In product market:

    1. Households supply goods and services which business demand.
    2. Households supply resources which firms demand.
    3. Households demand inputs that firms supply.
    4. Firms supply products which households demand.

17. The natural rate of unepmloyment will likely to fall if:

    1. Unemployment benefits increase.
    2. Income tax increases.
    3. More training is available for the unemployed.
    4. Geographical immobility increases.

18. Money that has an alternative use as an economic good is known as:

    1. Commodity money.
    2. Fiat money.
    3. E-money.
    4. Bad money.

19. The endogenous variables can best be defined as the:

    1. Variables which are fixed at the moment they enter the model.
    2. Variables which are determined within the model.
    3. Variables which does not change in any time.
    4. Variables from outside the model.

20. Improved training of employees would:

    1. Shift aggregate supply to the right.
    2. Shift aggregate supply to the left.
    3. Shift aggregate demand to the right.
    4. Shift aggregate demand to the left.

21. Which of the following is true about M1?

    1. It is the narrowest definition of the money supply.
    2. It includes the most liquid forms of money.
    3. It includes travelers' checks.
    4. All of the given options are true.

22. An economy without international trade is known as:

    1. A closed economy
    2. An open economy
    3. A Classical economy.
    4. A Keynesian economy.

Select a course code for Objective Questions:

ACC311 ACC501 BIF101 BIF401 BIF501 BIO101 BIO201 BIO202 BIO203 BIO204 BIO301 BIO302 BIO303 BIO401 BIO503 BNK603 BT101 BT201 BT301 BT302 BT401 BT402 BT403 BT404 BT405 BT406 BT501 BT504 BT505 BT604 CHE201 CHE301 CS001 CS101 CS201 CS202 CS204 CS301 CS302 CS304 CS311 CS401 CS402 CS403 CS408 CS501 CS502 CS504 CS506 CS508 CS601 CS602 CS604 CS605 CS607 CS609 CS610 CS614 CS707 CS710 ECO401 ECO402 ECO403 ECO404 EDU302 EDU401 EDU402 EDU501 EDU601 ENG101 ENG201 ENG301 ENG501 FIN611 FIN624 FIN625 ISL201 IT430 MCM101 MCM301 MGMT623 MGT101 MGT211 MGT301 MGT401 MGT402 MGT501 MGT502 MGT503 MGT510 MGT601 MGT603 MKT501 MKT610 MKT630 MTH101 MTH202 MTH302 MTH501 MTH601 MTH634 PAK301 PHY101 PHY301 PSY101 PSY403 PSY502 PSY512 SOC101 SOC301 SOC401 STA301 STA630 STA641 ZOO102 ZOO401 ZOO501 ZOO502 ZOO503 ZOO504 ZOO505 ZOO506 ZOO510 ZOO630

Select a course code for Subjective Questions:

ACC311 CS001 CS101 CS201 CS301 CS607 CS701 CS702 CS703 CS704 CS707 CS708 CS710 CS711 CS718 CS721 CS724 ECO401 ECO403 ENG101 ENG301 MGT703 MTH501 STA301