The number of people employed plus the number of people unemployed is known as:

• A) Labor force.
• B) Unemployment rate.
• C) Total population of the country.
• D) Employment rate.

If marginal propensity to consume (MPC) increases, then the value of multiplier will:

• A) Become zero.
• B) Decrease.
• C) Remain unchanged.
• D) Increase.

In 1920, Germany suffered from:

• A) Inflation
• B) Pure inflation
• C) Hyperinflation
• D) Deflation

According to Keynesian economics, aggregate expenditures are the sum of desired or planned spending undertaken by:

• A) The household sector after taxes.
• B) All four sectors only when the economy is at full employment.
• C) The business and government sectors.
• D) All four sectors at a specific aggregate production level.

If the values of nominal Gross Domestic Product (GDP) and GDP deflator in 2019 are Rs. 700,000 and 1.75 respectively, the real GDP in this year is:

• A) Rs. 600,000
• B) Rs. 300,000
• C) Rs. 400,000
• D) Rs. 500,000

Central bank do deficit financing by

• A) Printing currency
• B) Selling assets
• C) Selling financial securities
• D) Selling gold

Which of the following is NOT an injection into the circular flow of income?

• A) Government spending
• B) Imports
• C) Investment
• D) Consumption

In 1971, Pakistan linked its currency, rupee to:

• A) Pound Sterling
• B) USA Dollar
• C) Japanese yen
• D) Kuwait Dinar

Keynesian demand management policies could not be successfully applied in a situation of:

• A) Stagflation.
• B) Cost push inflation.
• C) Hyper inflation.
• D) Demand pull inflation.

The labour force is made up of:

• A) The number of people employed minus the number of people unemployed.
• B) Just the number of people employed.
• C) The number of people employed plus the number of people unemployed.
• D) The whole population.

According to the model of aggregate supply and aggregate demand, in the long run, an increase in the money supply should cause prices to ________ and output to ___________.

• A) Fall; fall
• B) Rise; rise
• C) Rise; remain unchanged
• D) Fall; remain unchanged

The primary result of inflation is:

• A) A decline in prices.
• B) A decline in the value of money.
• C) A rise in personal wealth.
• D) A rise in wages.

The long run aggregate supply will shift to the right whenever:

• A) Expenditures (such as consumption and net exports) increase.
• B) The price level increases.
• C) The prices of inputs (such as wages and the price of oil) increase.
• D) Factors of production (such as labor and capital) increase.

Before the 1970, Pakistan linked its currency, rupee to:

• A) USA Dollar
• B) Japanese yen
• C) Kuwait Dinar
• D) Pound Sterling

If A firm spends Rs.1000 for making a product and sells its product for Rs.1500, then the valve added is equal to:

• A) Rs.500
• B) Rs.2500
• C) Rs.2000
• D) Rs.1000

Between two countries, the worth of one currency in terms of the other is known as:

• A) Interest rate
• B) Inflation rate
• C) Exchange rate
• D) Floating interbank rate

In the year 1970, the world's economy faced the phenomenon of

• A) Illumination
• B) Stulation
• C) Isolationism
• D) Stagflation

The average propensity to save is the ratio of:

• A) Total saving to a change in disposable income.
• B) A change in saving to total disposable income at a specific income level.
• C) Total saving to total disposable income at a specific income level.
• D) A change in saving to a change in disposable income.

In a classical model, a rightward shift in aggregate supply keeping aggregate demand constant will:

• A) Increase the level of output only.
• B) Increase both the price level and the level of output.
• C) Decrease the price level and increase the level of output.
• D) Increase the price level only.

What is determined on the base of nation's import and export of goods, services, financial transfers and financial capital?

• A) Deflation
• B) Balance of Payments
• C) Lack of Goods
• D) Inflation