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Permalink Reply by Yasmeen(S.admin) on May 13, 2012 at 12:12pm

eco403 mid term solve mcqs and Tody ppr
mcq most from old pprx

difference b/w nominal variable and real variable

nominal exchange rate and real exchange rate

and 1 is from graphs,,

Permalink Reply by Yasmeen(S.admin) on May 13, 2012 at 12:16pm

ECO403 Mid Term MCQs

1. Which of the following is included in M2?

Select correct option:

Commercial paper

Stocks

U.S. Treasury bonds

Savings accounts

2. The rate of inflation measures which of the following?

Select correct option:

The rate of increase in the overall level of prices pg 4

The rate of increase in the price of a particular good The

rate of increase in nominal GDP

The rate of change in nominal interest rates

3. The cost of changing prices is known as the:

Select correct option:

Menu cost of inflation pg 35

Shoe leather cost of inflation

General inconvenience

Relative price distortions

4. n a macroeconomic model without foreign trade or government spending, aggregate

demand is the sum of:

Select correct option:

Personal saving and private investment.

Personal saving and personal consumption.

Personal consumption and personal income.

Personal consumption and private investment.

Real GDP (Gross Domestic Product) is measured:

Select correct option:

In the prices of a base year.

In current dollars.

At a constant output level but at current prices.

As the difference between the current year’s GDP and last year’s GDP.

6. Real interest rates are the:

Select correct option:

Nominal interest rates plus the inflation rate.

Interest rates quoted in the market.

Interest rates quoted in the market minus the inflation rate.

Interest rates quoted in the market plus the expected inflation rate.

7. The number of people unemployed equals:

Select correct option:

The number of people employed minus the labor force.

The labor force plus the number of people employed.

The number of people employed divided by the labor force. The labor force minus the

number of people employed.

8. Economists define the labor force to

include Select correct option:

Only people who are working full-time.

People who are not working but are actively looking for a job and people who are working.

People who are working.

None of the given options.

9. To arrive at GDP, the Bureau of Economic Analysis (BEA) counts:

Select correct option:

The value of total sales.

The value of final sales.

The value of intermediate goods and final goods.

Total value added plus the value of sales at the retail level.

10. example of an expansionary monetary policy

is: Select correct option:

An increase in the required reserve ratio.

An increase in the discount rate.

A reduction in the taxes banks pay on their profits.

The central bank buying government securities in the open market.

11. Which of the following best defines Net national product

elect correct option:

GDP less depreciation

GNP plus income generated from foreign firms in the domestic country

GNP less depreciation

GNP less income generated from foreign firms in the domestic country

12. change in the price level is merely a change in the units of measurement.” This is

the:

Select correct option:

Classical view of inflation

Keynesian view of inflation

Ricardian view of inflation Neo

classical view of inflation

13. The cost of next best alternative forgone is best described by the:

Select correct option:

Principle of diminishing returns.

Marginal principle.

Principle of opportunity cost.

Reality principle.

14. Which of the following events will lead to an increase in the demand for money?

Select correct option:

An increase in the level of aggregate output

A decrease in the price level

An increase in the interest rate

An increase in the supply of money

15. Which of the following expressions is the unemployment rate?

Select correct option:

Labor Force/Population

Unemployed / Employed + Unemployed

Employed + Unemployed

Labor Force + Not in Labor Force

16. Which of the following statements best describes the definition of scarcity?

Select correct option:

There are no buyers willing to purchase what sellers have produced

There is more than enough money to satisfy consumers' wants

Resources are limited in quantity and can be used in different ways

There are not enough goods to satisfy all of the buyers' demand

17. The difference between exports and imports in determining the GDP is known as

the:

Select correct option:

Net exports.

Import tariffs.

Net imports.

Net income.

18. If you buy a pizza from a restaurant rather than making the identical product at

home, then which of the following would happen?

Select correct option:

GDP increases

GDP decreases

GDP remains unchanged

Society’s well-being decreases

19. An item that is intrinsically worthless is:

Select correct option:

Commodity money.

Precious metals.

Fiat money.

Barter items.

20. The production function is a function that:

Select correct option:

Relates factor prices to the amounts of inputs demanded.

Relates marginal products of factors of production to factor prices.

Relates factors of production to the amount of output produced.

Always have constant returns to scale.

21. If the U.S. real exchange rate increases, then U.S. -----------------will fall and U.S. ----

---------- will rise.

Select correct option:

Imports; exports

Income; imports

Exports; income

Exports; imports

22. Which of the following is NOT included in M1?

Select correct option:

Deposits in checking accounts that pay interest

Deposits in checking accounts

Deposits in money market mutual funds

Currency held by the public

23. Which of the following equations is correct?

Select correct option:

Real exchange rate = (exchange rate + domestic price level) / foreign price level Exchange

rate = (real exchange rate × domestic price level) / foreign price level

Real exchange rate = (nominal exchange rate × domestic price level) × foreign price level

Real exchange rate = (nominal exchange rate × domestic price level) / foreign price

level

24. Which of the following is a key problem resulting from inflation?

Select correct option:

Prices are stable

Certainty of future prices

A haphazard redistribution of income

An increase in the value of money

25. If Umar does not have a job and is not currently looking for work but has looked in

the past, he is considered:

Select correct option:

Not in the labor force.

Unemployed and in the labor force.

Unemployed.

Unemployed and not in the labor force.

26. A common misperception about inflation is that it reduces real wages; this is:

Select correct option:

True only in the short run. Lec 13

True only in the Long run.

True only in Command economies.

None of the given options.

27. Aggregate demand is the total demand for all goods and services in an economy

from:

Select correct option:

The household sector.

All sectors except the rest of the world. The household and government sectors.

All sectors including the rest of the world.

28. : The basic economic function of the household sector is:

Select correct option:

Undertaking consumption.

Undertaking production.

Exchanging goods.

Exchanging resources.

29. : Resources in an economy:

Select correct option:

Are always fixed.

Can never decrease.

Always increase over time.

Are limited at any moment in time.

30. : S-I and NX are exactly equal to zero i-e the value of imports equals the value of

exports then:

Select correct option:

We have trade surplus. We have trade deficit.

We have balanced trade.

We have no trade at all.

31. :

32. : The extra output that a firm can produce using an additional unit of labor is

known as:

Select correct option:

Average product of labor.

Marginal product of labor.

Total product.

Total cost.

33. Disposable income can be calculated by subtracting which of the following from

personal income?

Select correct option:

Personal taxes

Indirect business taxes

Capital consumption allowance Income earned but not received

34. The narrowest definition of money supply is:

Select correct option:

M1.

M2.

M3.

M4.

35. If national output Y = 1,000 and domestic spending on all domestic and foreign

goods and services equals 900, then net exports NX will be equal to:

Select correct option:

100

-100

1,900

0

Permalink Reply by + ((( PἇƦÎzἇἇÐ ₱ἇƦÎѠÎ₰h!!! ))) on May 21, 2012 at 11:37am

mcq's not from past papers

1)Suppose that the expected inflation rate is 7% in the United States and 9 % in Japan. The real interest rate is 11% in both countries; assume that purchasing power parity holds. What is the nominal interest rate in each country?
2)Related tosteady state
3)realtion Investment and world interest rate (graphically)
just remember