Which of the following market structures is involved in non-price-competition?

• A) Perfect competition and oligopoly
• B) Monopolistic competition
• C) Perfect competition
• D) Monopoly

Which of the following point is achieved, if price is equal to marginal cost?

• A) Productive inefficiency
• B) Allocative inefficiency
• C) Productive efficiency
• D) Allocative efficiency

The market structure in which strategic considerations are most important is:

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

A firm will maximize its profits through price discrimination when the price elasticity of demand for different customers is:

• A) Different
• B) Zero
• C) Same
• D) Infinite

Monopolistic competition is characterized by:

• A) Identical products and a single seller
• B) Differentiated products and a single seller
• C) Identical products and many sellers
• D) Differentiated products and many sellers

Which of the followings is true for Say’s law in case of excess supply of labor?

• A) Consumer demand will decrease
• B) Demand for factors will decrease
• C) Firms will decrease output
• D) Wage rate will decrease

The concept that “Demand creates its own supply" is given by:

• A) Monetarists
• B) Keynesians
• C) Classical
• D) New Classical

Due to positive demand shock, labor demand curve:

• A) Remains unchanged.
• B) Shifts upward.
• C) Shifts downward.
• D) Becomes vertical.

The good produced by a monopolist:

• A) Has perfect substitutes.
• B) Has no close substitutes.
• C) Can be easily duplicated.
• D) Has close substitutes.

Deflation is:

• A) A decrease in the overall level of economic activity.
• B) An increase in the overall price level.
• C) An increase in the overall level of economic activity.
• D) A decrease in the overall price level.

Inflation is measured on the basis of

• A) Whole Sales Index
• B) Consumer Price Index
• C) Marshall's Index
• D) Consumer Borrowing Rate Index

Suppose the consumption function is C = 200 + 0.6 Yd. What is marginal propensity to consume?

• A) 600
• B) 60
• C) 0.6
• D) 6

The number employed in manufacturing has declined over the last two decades. Which of the following best explains this trend?

• A) Foreign firms have invested heavily in the UK.
• B) There has been a fall in the demand for imports.
• C) The government has subsidized manufacturing industry too much.
• D) Firms have substituted capital for labor to control costs.

Assume that there is no government or foreign sector, if the marginal propensity to consume (MPC) is 0.60, then the value of multiplier will be equal to:

• A) 0.40.
• B) 2.5.
• C) 1.66.
• D) 5.0.

The deregulation of foreign exchange market is an example of

• A) Free market economy
• B) Increased role of central bank
• C) Authoritarianism
• D) Government control of economy

Which of the following is a stock variable?

• A) Income
• B) All of the given options
• C) Government debt
• D) Gross domestic product

Multiplier principle states that a change in investment causes a magnified change in:

• A) Saving.
• B) Income.
• C) Consumption.
• D) Unemployment.

Government driven actual inflation in period t as expected in period t-1, and then agents erroneously spend more than they should, because:

• A) Agents view the decrease as nominal rather than real
• B) Agents view the decrease as real rather than nominal
• C) Agents view the increase as nominal rather than real
• D) Agents view the increase as real rather than nominal

The expenditure method sums up the value of all the........transactions taking place in the economy.

• A) Normal goods
• B) Final goods
• C) Intermediate goods
• D) Inferior goods

In case of balance of payment account analysis, the obligations received from the foreigners always refers to

• A) Debit payments
• B) Late payments
• C) Obsolete payments
• D) Credit payments