An important difference between the approaches of the Classical and Keynesian economists uses to achieve a macroeconomic equilibrium is that:

• A) Classical economists believe that monetary policy will certainly affect the level of output; Keynesians believe that money growth affects only prices
• B) Keynesian economists actively promote the use of fiscal policy; the Classical economists do not
• C) Keynesian economists actively promote the use of monetary policy to improve aggregate economic performance; Classical economists do not
• D) Classical economists believe that fiscal policy is an effective tool for achieving economic stability; Keynesians do not

In macroeconomics, what does the term "Aggregate Demand" (AD) refer to?

• A) The total spending on all goods and services in an economy at a given price level.
• B) The total spending by households on consumer goods and services.
• C) The total output of all goods and services produced in an economy.
• D) The total number of workers in the labor force.

If total revenue of a firm is Rs. 52000 and total cost is Rs. 43500, then firm will bear profit/loss equal to:

• A) Rs. 8500
• B) Rs. 25000
• C) Rs. 1000
• D) Rs. 18500

According to classical economics, what is the role of government in the economy?

• A) It should actively manage the economy to achieve full employment.
• B) It should avoid intervention and allow the market to self-adjust.
• C) It should intervene to stabilize prices.
• D) It should control the production and distribution of goods and services.

Which of the following market structures does not pay attention to production efficiency?

• A) Monopoly
• B) Oligopoly
• C) Perfect competition
• D) Monopolistic competition

The key characteristic of an oligopoly is:

• A) A large number of similar products.
• B) A single dominant firm.
• C) A small number of large firms.
• D) Many small firms in the market.

In kinked demand curve model, if one firm raises prices, no one else will raise their prices. In this case demand for the firm will be:

• A) Perfectly inelastic
• B) Inelastic
• C) Elastic
• D) Perfectly elastic

When the marginal revenue product of labor is greater than the marginal input cost of labor, the profit maximizing firm will:

• A) Hire more labor.
• B) Maintain the same employment.
• C) Hire less labor.
• D) Decrease output.

Consumption spending, investment expenditures, government expenditures and net exports are the components of:

• A) Aggregate demand.
• B) Aggregate supply.
• C) Household income.
• D) Government revenue.

If a country imports more goods and services from other countries, then the aggregate demand will:

• A) First rise then start falling.
• B) Increase.
• C) Decrease.
• D) Remain unchanged.

If Competitive markets do not achieve equitable outcomes, then it is called:

• A) Market failure.
• B) Non-rational consumers.
• C) Imperfect market structure.
• D) Limit pricing.

Which of the following formulas represents net present value?

• A) Present value x Purchase cost
• B) Present value - Purchase cost
• C) Present value / Purchase cost
• D) Present value + Purchase cost

Business-cycle instability is best corrected through government policies is a primary implication of:

• A) J.M. Keynes.
• B) Monetarist.
• C) Classical Economists.
• D) New Classical Economists.

In the context of Marginal Disutility of work(MDUW), what does "marginal" refer to?

• A) The additional disutility from working one more hour.
• B) The cost of not working.
• C) The overall utility of leisure.
• D) The total value of disutility.

If the monopolist earns profit then government can regulate this situation through:

• A) None of the given options is true
• B) Both taxes and subsidies
• C) Subsidies
• D) Taxes

Which of the following is NOT a public good?

• A) Knowledge
• B) Electronics
• C) Street lights
• D) National security

What is a real-world example of an oligopolistic industry?

• A) Street food vendors
• B) Farmers' markets
• C) Local hair salons
• D) Smartphone manufacturing

As compared to existing firms, a new firm entering in monopolist market has to face:

• A) None of the given options
• B) Low costs
• C) Equal costs
• D) High costs

In the context of Marginal Disutility of work (MDUW), when a person decides to work fewer hours and has more leisure, what does this imply about their Marginal Disutility of work (MDUW)?

• A) MDUW is decreasing.
• B) MDUW is irrelevant.
• C) MDUW is constant.
• D) MDUW is increasing.

Which term describes an agreement among firms in an oligopoly to coordinate their actions and reduce competition?

• A) Collusion
• B) Monopoly
• C) Monopolistic competition
• D) Perfect competition