Question:

The natural rate of unemployment equals the sum of those who are:

A.

frictionally and structurally unemployed

B.

frictionallyandcyclicallyunemployed

C.

structurallyandcyclicallyunemployed

D.

frictionally structurally and cyclically unemployed

Answer» a. frictionally and structurally unemployed

Question:

In the Keynesian two sector model, when AD = AS, then:

A.

s<i

B.

s>i

C.

s=i

D.

i=0

Answer» c. s=i

Question:

An Economic model is a statement of relationship among economic ——

A.

variables

B.

phenomena

C.

development

D.

none of these

Answer» a. variables

Question:

Income is a ——- variable

A.

flow

B.

discontinuous

C.

stock

D.

none of the above

Answer» a. flow

Question:

Ratio of consumption expenditure to any particular level ofincome

A.

mps

B.

aps

C.

apc

D.

mpc

Answer» c. apc

Question:

In classical theory which of the following is found in the economy:

A.

unemployment

B.

involuntary unemployment

C.

less than full employment

D.

full employment

Answer» d. full employment

Question:

The marginal productivity of labour is:

A.

the incremental output due to an increase in capital, ceteris paribus

B.

the incremental output due to an increase in labour, ceteris paribus.

C.

the incremental output due to a change in technology, ceteris paribus

D.

the incremental output due to a change in technology and a change in the

Answer» b. the incremental output due to an increase in labour, ceteris paribus.

Question:

Wages and prices do not adjust quickly to restore general equilibrium is a property of

A.

classical economics

B.

keynesian economics

C.

monetary economics

D.

supply side economics

Answer» b. keynesian economics

Question:

According to Keynes the most important determinant ofconsumption

A.

rate of interest

B.

saving

C.

income

D.

investment

Answer» c. income

Question:

Monetarism is associated with:

A.

keynesian school

B.

chicago school

C.

cambridge school.

D.

neo-classical school.

Answer» b. chicago school