Which one of the following is production function?

• A) Y = F (K, L) + sfk
• B) Y = F (K, L) + Y/L
• C) Y = F (K/k, L + K/L)
• D) Y = F (K, L)

An increase in the money supply will shift ------

• A) LM curve upward (to the left).
• B) LM curve downward (to the right).
• C) IS curve to the left.
• D) IS curve to the right.

In the solow model there is -------type of capital.

• A) Four
• B) One
• C) Three
• D) Two

The ---------aggregate supply curve is ----------- at the full-employment level.

• A) Short run; steeper
• B) Long-run; vertical
• C) Short run; convex
• D) Long-run; horizontal

If the stock of physical capital remains same but population increases then labor productivity will --------

• A) increase.
• B) decrease.
• C) remain same.
• D) be zero.

An expansionary monetary policy ---------

• A) Shifts the LM curve to the left.
• B) Shifts IS curve to left.
• C) Reduces the interest rate.
• D) Decreases real output.

Which one of the following is NOT the example of adverse supply shock?

• A) Flood
• B) Discovery of reserves
• C) Heavy rain
• D) Earthquakes

"Change in consumer confidence" is an example of:

• A) Supply Shock
• B) LM Shock
• C) IS Shock
• D) Production Shock

The policy actions aimed to reduce the severity of --------- economic fluctuations is known as-------------

• A) Long run; Trade policy.
• B) Long run; Monetary policy.
• C) Short run; Fiscal policy.
• D) Short run; Stabilization policy.

In the IS-LM model, a decrease in money supply shifts ---------

• A) LM curve to the left.
• B) IS curve to the right.
• C) LM curve to the right.
• D) IS curve to the left.

In the solow model with technological progress, the steady state growth rate of output per worker is -----------

• A) n + g.
• B) One.
• C) Zero.
• D) G.

With no population growth, the steady-state level of capital per worker will increase whenever the -------------- rate -------------

• A) Saving; decreases.
• B) Saving; increases.
• C) Consumption; decreases.
• D) Tax; increases.

In the two sector endogenous growth theory, the ------------affects the steady state----------

• A) Saving rate; growth rate of income.
• B) Fraction of labor; level of consumption.
• C) Saving rate; level of income.
• D) Fraction of labor; level of income.

With the help of fiscal and monetary policy, policy makers can affect ----------------variables.

• A) Endogenous
• B) One
• C) Exogenous
• D) Macroeconomic

In IS-LM framework, an expansionary fiscal policy shifts---------curve to the -----------

• A) LM; right.
• B) IS; left.
• C) LM; left.
• D) IS; right.

If labor productivity per week is 100 units and there are 5 employees. What is the total output?

• A) 500 units
• B) 20 units
• C) 100 units
• D) 105 units

If marginal propensity to consume (MPC) is 0.7, the government purchases multiplier is----------

• A) 0.7/0.7.
• B) 1-0.7/-0.7.
• C) 1/0.7.
• D) 1/0.3.

Due to a negative demand shock, aggregate demand curve will:

• A) Shift towards left.
• B) Become vertical.
• C) Remain the same.
• D) Shift towards right.

In macro-economics the word aggregate means--------

• A) Individual.
• B) Particular.
• C) One.
• D) Totals.

Suppose labor force (L) = 1000 in a year and population is growing at 1% per year then change in labor force will be---------------

• A) 1.
• B) 0.11.
• C) 10%.
• D) 10.