The theory regarding to the tradeoff between unemployment and inflation is established by:

• A) Milton Friedman
• B) Joseph Schumpeter
• C) W.A. Phillips
• D) John Maynard Keynes

Consider the closed economy,where total tax collection is 50,000, investment 80,000 and government spending 20,000.what are injections into the circular flow of income?

• A) 100,000
• B) 120,000
• C) 20,000
• D) 80,000

change in expenditure is less but change in income is higher due to

• A) Paradox of thrift
• B) Inelastic demand
• C) Accelerator
• D) Multiplier effect

The percentage annual increase in average price level is:

• A) The rate of employment
• B) The rate of deflation
• C) The rate of unemployment
• D) The rate of inflation

Which of the following is a benefit of real economic growth to a society?

• A) The society is less able to satisfy new wants.
• B) Everyone gets equal income.
• C) The burden of scarcity increases.
• D) The standard of living increases.

Investment expenditures are expenditures made by the __________ sector:

• A) Business
• B) Household
• C) Foreign
• D) Government

According to the quantity theory of money, if there is inflation, what must have caused it?

• A) Higher oil prices
• B) An increase in the money supply
• C) Increased velocity
• D) Higher budget deficits

The exchange rate is also known as

• A) Forex rate
• B) Forez rate
• C) Forep rate
• D) Falez rate

Let the marginal propensity to consume equals 0.75. The value of multiplier in this case is:

• A) 1.33.
• B) 4.
• C) 0.25.
• D) 2.33.

Which of the following is most likely to occur in an economy if aggregate expenditures are less than aggregate output?

• A) Inflationary gap
• B) Hyperinflation
• C) Deflationary gap
• D) Saving investment gap

Resource wastage is high, when inflation is

• A) High
• B) Low
• C) Medium
• D) Controlled

From 2018 to 2019, change in disposable income is Rs. 630, 000 and change in consumption is Rs. 450,000. What is the value of marginal propensity to consume?

• A) 1.4
• B) 0.71
• C) 0.4
• D) 1.71

Suppose the consumption function is C = 200 + 0.6 Yd. If the value of disposable income is Rs. 10000 then total consumption equals:

• A) Rs. 6200.
• B) Rs. 5800.
• C) Rs. 6000.
• D) Rs. 6400.

In Keynesian economics, a deflationary gap occurs when aggregate expenditures are:

• A) Equal to aggregate production.
• B) Greater than aggregate production.
• C) Less than aggregate production.
• D) Undetermined.

A rise in government expenditure leads to a multiple rise in national income due to:

• A) Accelerator.
• B) Inelastic demand.
• C) Inelastic supply.
• D) Multiplier effect.

Which of the following events shifts the short-run aggregate supply curve to the right?

• A) An increase in price expectations
• B) A decrease in the money supply
• C) A drop in oil prices
• D) An increase in government spending on military equipment

Personal income is the income:

• A) Minus indirect taxes.
• B) Divided by the total number of population.
• C) Received by individuals during a given year.
• D) Received by government for spending during a given year.

The price at which firms sells its final output to the consumers is called:

• A) Producer price
• B) Market price
• C) Factor price
• D) Consumer price

According to the Classical economists, those who are not working:

• A) Have chosen not to work at the market wage.
• B) Have given up looking for a job, but would accept a job at the current wage if one were offered to them.
• C) Are unable to find a job at the current wage rate.
• D) Are too productive to be hired at the current wage.

According to whom inflation and unemployment are opposite sides of the same coin

• A) Adam Smith
• B) Phillips
• C) Marcus
• D) Keynes