Question:

Frictional unemployment exists:

A.

When there is a decrease in real GDP

B.

Because it takes time to find a job when one is first entering the labour force

C.

As a result of technological change

D.

When an individual retires

Answer» b. Because it takes time to find a job when one is first entering the labour force

Question:

The demand curve for Giffen’s goods:

A.

Vertical

B.

Horizontal

C.

Negative slope

D.

Positive slope

Answer» d. Positive slope

Question:

Which of the following can cause shifts in consumption function:

A.

Psychological attitude

B.

Social practices

C.

Business motives

D.

Changes in price level

Answer» d. Changes in price level

Question:

From the position of stable equilibrium, the market supply of a commodity decreases, while the market demand remains unchanged, then:

A.

Equilibrium price falls

B.

Equilibrium quantity rises

C.

Both equilibrium price and equilibrium quantity decreases

D.

Equilibrium price rises, but equilibrium quantity falls

Answer» d. Equilibrium price rises, but equilibrium quantity falls

Question:

Schedule that expresses relationship between rate of interest and corresponding amount of investment

A.

MEI

B.

MEC

C.

Effective Demand

D.

Aggregate Demand

Answer» a. MEI

Question:

Which of the following statement is TRUE with regard to total utility

A.

total utility is the utility derived from last unit

B.

total utility increases at a diminishing range

C.

as consumption increases total utility goes on diminishing

D.

at saturation point total utility is negative

Answer» b. total utility increases at a diminishing range

Question:

Wage cut as a solution of unemployment in classical theory is suggested by:

A.

J

B.

Say B. A.C. Pigou

C.

Keynes

D.

Marshall

Answer» b. Say B. A.C. Pigou

Question:

When AC minimum in short run

A.

ac < mc

B.

ac > mc

C.

ac = mc

D.

any of above is possible

Answer» b. ac > mc

Question:

Which one of the following elasticities takes the average of prices and quantities:

A.

Point elasticity of demand

B.

Arc elasticity of demand

C.

Income elasticity of demand

D.

Cross elasticity of demand

Answer» b. Arc elasticity of demand

Question:

According to Keynes the most important determinant of investment

A.

MEC

B.

Effective demand

C.

Aggregate demand

D.

Rate of interest

Answer» a. MEC