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This set of Macro Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Macro Economics 1 Set 1
Q1 | The classical economists believed that the demand for labour is a function of:
- total money wages
- money wage rate
- total real wages
- real wage rate
Q2 | In classical theory of employment, there isthe possibility of:
- voluntary unemployment
- no unemployment
- involuntary unemployment
- disguised unemployment
Q3 | The idea that a general cut in wages will finally lead to a state of full employment wassuggested by :
- keynes
- marshall
- j.b.say
- a.c.pigou
Q4 | Say’s law of market says:
- supply creates its own demand
- demand creates supply
- income generates demand
- savings create demand
Q5 | The aggregate production function implied under classical theory is :
- long run
- short run
- no time element
- none of the above
Q6 | In the Cambridge equation of M = kPR, the value of kis:
- m/v
- 1/v
- v in fisher’s equation
- none of these
Q7 | As a result of an increase in capital, ceteris paribus, ------- the marginal productivity oflabour:
- remains constant
- increase
- decreases
- none of these
Q8 | In the Fisher’s extended equation of exchange MI VI represents:
- credit money
- primary money
- both primary andcredit money
- general price level
Q9 | In Fisher’s transaction velocity model, one of the following is not an assumption:
- velocity of circulation of money is constant
- the volume of transactions is constant
- full employment
- p is considered as an active factor
Q10 | The cash balance equation M = KPO was given by:
- keynes
- pigou
- robertson
- marshall
Q11 | “Supply creates its own demand “is a law of:
- investment
- inflation
- consumption
- market
Q12 | In the equation MV+ MI VI = PT, ‘M ‘denotes:
- velocity of money
- money in circulation
- bank deposit
- none of these
Q13 | I classical demand for money, the relationship between money supply and price level is:
- proportional
- non-proportional
- neither proportional nor non-proportional
- none of these
Q14 | As per classical theory saving is:
- an increasing function of rate of interest
- decreasing function of rate of interest
- decreasing function of level of income
- none of these
Q15 | The Cambridge version of the quantity theory of money was developed by:
- fisher
- alfred marshall
- pigou
- keynes
Q16 | In classical system which of the following keeps the economy at full employment:
- level of saving
- increase in money supply
- adjustment in investment
- adjustment in money wages
Q17 | In Fisher’s equation of exchange MV=PT, the variation of which produces aproportional change in price:
- m
- v
- p
- t
Q18 | According to classical economists, variationsin savings are due to:
- level of investment
- rate ofinterest
- level of employment
- none of the above
Q19 | In classical theory which of the following is found in the economy:
- unemployment
- involuntary unemployment
- less than full employment
- full employment
Q20 | In MV=PT, if M doubles and V and T remain constant, then P will:
- double
- 1/2
- 1
- 4
Q21 | Pigou’s version of Cambridge equation is:
- m = kp/y
- p= kr/m
- mv = pt
- mv = mivi
Q22 | The quantity theory of money was restated by:
- alfred marshall
- milton friedman
- irving fisher
- j.m. .keynes
Q23 | The law which states that supply creates its own demand and overproduction isimpossible is known as:
- the law of supply
- say’s law of market
- law of demand
- law of macro economics
Q24 | Wages and prices do not adjust quickly to restore general equilibrium is a property of
- classical economics
- keynesian economics
- monetary economics
- supply side economics
Q25 | Classicals treated money as a:
- medium of exchange
- store of value
- both
- none