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

When the interest rate falls, the level of investment will

• A) Remain same
• B) Rise
• C) First fall,then rise
• D) Fall

The investment demand curve shows the relationship between the levels of:

• A) Consumption and interest rate.
• B) Investment and interest rate.
• C) Investment and consumption.
• D) Investment and saving.

The Phillips curve will shift to left if:

• A) Natural rate of unemployment increases.
• B) Optimum inflation changes.
• C) Optimum level of output changes.
• D) Natural rate of unemployment decreases.

Suppose if investment rises by Rs 100 billion at each price level. If the value of the multiplier is 4, what is the amount of change in real GDP demanded at each price level?

• A) 1000
• B) 25
• C) 400
• D) 50

If the values of nominal Gross Domestic Product (GDP) and GDP deflator in 2007 are Rs. 720,000 and 1.25 respectively, the real GDP in this year is:

• A) Rs.840, 000.
• B) Rs.576, 000.
• C) Rs.786, 000.
• D) Rs.900, 000.

Sum of total factor income is called:

• A) National Income.
• B) Disposable income.
• C) Personal income.
• D) Government revenues.

Gross National Product equals:

• A) Gross Domestic Product minus net factor incomes from abroad.
• B) Gross Domestic Product plus expected inflation.
• C) Gross Domestic Product plus net factor incomes from abroad.
• D) Gross Domestic Product minus expected inflation.