The total market value of all final goods and services produced within a given period by factors of production located within a country is:

• A) Gross national product.
• B) Net national income.
• C) Gross domestic product.
• D) Net national product.

Final goods are:

• A) Perishable goods only.
• B) For further processing.
• C) Inferior goods only.
• D) For Direct use by the consumers.

Which type of inflation is linked with the supply side of the economy?

• A) Demand pull inflation
• B) Consumerism
• C) Chronic inflation
• D) Cost push inflation

In measurement of GDP, the problem of double counting is avoided by:

• A) Adjusting the value of intermediate goods with prices.
• B) Calculating value added at each stage of production.
• C) Adjusting the value of only finished goods with prices.
• D) Using GDP deflator.

If leakages into the circular flow of income rise, then the value of multiplier will:

• A) Fall.
• B) Remain unchanged.
• C) Rise.
• D) Become zero.

The primary reason of decline in the value of money is:

• A) Inflation.
• B) A rise in consumption.
• C) Higher tax rate.
• D) Deflation.

According to the Real Business Cycles (RBC) School, fluctuations in output occur because of:

• A) Change in price level.
• B) Change in aggregate demand.
• C) Change in technology.
• D) Unanticipated change in demand management policies.

When interest rate goes up, the level of Investment will:

• A) Decrease.
• B) Increase.
• C) Remain unchanged.
• D) First increase, then start decreasing.

Unemployment due to changing job or due to movement around the country is known as:

• A) Frictional unemployment.
• B) Cyclical unemployment.
• C) Seasonal unemployment.
• D) Structural unemployment.

What refers to the permanent effects of a temporary change?

• A) Hysteresis
• B) Clotheslines
• C) Collusion
• D) Hypothesis

The market of foreign exchange is linked with the

• A) Income inequality
• B) Cross Price Analysis
• C) Balance of Payments
• D) Dividend Analysis

Intermediate goods are:

• A) Inferior goods only.
• B) Perishable goods only.
• C) For further processing.
• D) For direct use by the consumers.

In 1998, the authorities have adopted a multiple exchange rate system in Pakistan to alleviate the:

• A) Poverty problem
• B) Foreign debt
• C) Financial crisis
• D) External shocks

In case of adaptive expectations the time period is

• A) t-1
• B) t/1
• C) t-1/t+1
• D) t+1

Gross Domestic Product is:

• A) Neither a stock nor a flow variable.
• B) A flow variable.
• C) Both a stock and a flow variable.
• D) A stock variable.

------------- is an accounting record of a country’s transactions with rest of the world.

• A) Balance of payment
• B) Balance of trade
• C) Trade liberalization
• D) Rate of inflation

Overestimation of national product in national income calculations is known as:

• A) Wealth effect.
• B) Lack of effective demand effect.
• C) Double counting effect.
• D) Distortion effect.

The slope of the saving function (or line) is the:

• A) Marginal propensity to save.
• B) Marginal propensity to consume.
• C) Average propensity to consume.
• D) Average propensity to save.

Disposable income is total income:

• A) Plus transfer payments.
• B) Minus saving.
• C) Plus net taxes.
• D) Minus net taxes.

If MPC is 0.25, what is the value of multiplier?

• A) 1.33
• B) 4
• C) 0.25
• D) 0.75