Question:

The period of economic downturn that ensued after the financial crisis of 2007-08 andaffected many countries world-wide is called:

A.

the great depression

B.

the great recession

C.

black friday

D.

great collapse

Answer» b. the great recession

Question:

Main reason for frictional unemployment is :

A.

lack of opportunities

B.

low wage

C.

high cost

D.

market imperfection

Answer» d. market imperfection

Question:

ISLM model was basically ………….. sector model:

A.

two

B.

one

C.

three

D.

four

Answer» a. two

Question:

The curve which relates the level of income with the rate of interest which is determined bymoney- market equilibrium corresponding to different levels of demand for money is known as

A.

is curve

B.

lm curve

C.

income curve

D.

none of the above.

Answer» b. lm curve

Question:

A temporary unemployment which exists during the period of the transfer of labor fromone occupation to another is called

A.

voluntary unemployment

B.

involuntary unemployment

C.

cyclical unemployment

D.

frictional unemployment

Answer» d. frictional unemployment

Question:

The term business cycle refers to –

A.

fluctuations in aggregate economic activity over time.

B.

ups and down in the production of goods

C.

increasing unemployment

D.

declining savings

Answer» a. fluctuations in aggregate economic activity over time.

Question:

Economists from which of the following schools of thought are most likely to favor activistgovernment policies?

A.

keynesian

B.

monetarist

C.

classical

D.

all of the above

Answer» a. keynesian

Question:

Stagflation means:

A.

inflation with stagnation

B.

recession with stagnation

C.

inflation galloping like stage

D.

inflation & increasing output

Answer» a. inflation with stagnation

Question:

For an open economy model which curve is added IS-LM?

A.

ms

B.

demand

C.

md

D.

bp.

Answer» d. bp.

Question:

Original IS-LM model is a ………. model.

A.

open

B.

closed

C.

both

D.

none

Answer» b. closed