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

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