Managerial Economics Set 6
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This set of Managerial Economics Multiple Choice Questions & Answers (MCQs) focuses on Managerial Economics Set 6
Q1 | The aggregate production function for real business cycle models is shown as
- Yt=F(Kt,Nt)
- Yt= Zt F(Kt - Nt)
- Yt= Zt F(Kt,Nt)
- Yt=Zt / (Kt,Nt)
Q2 | In real business cycle models and new classical models
- Monetary factors are responsible for fluctuations in output and employment
- Changes in unemployment are involuntary
- Markets always clear
- Prices and wages are perfectly flexible
Q3 | Which of the following shocks have been emphasized most often with respect to real business cycle story?
- Shocks to technology
- Variations in environmental conditions
- Changes in the real(relative) prices of imported raw materials
- Changes in tax rates
Q4 | In the new Keynesian models,
- Imperfect competition comes is the result of optimizing behavior by individuals
- Perfect competition is assumed with respect to the product market
- A natural monopoly is presumed for the product market
- Both a and c
Q5 | Which of the following cannot be used to justify efficiency wages
- Sticky price(menu cost) models
- Turnover costs
- Worker shirking
- Worker morale
Q6 | In any efficiency wage model it must be true that
- The marginal benefit of increased efficiency is equal to the marginal cost of higher wages
- Nominal wages are inflexible
- Disequilibrium in the labor market exists
- All of the above
Q7 | With respect to efficiency wage models the efficiency of workers depends
- Positively on the money wage they are paid
- Positively on the real wage paid
- Inversely on the age of the workers
- Positively on the unemployment rate
Q8 | New Keynesian would agree with all of the following except
- Stabilization policy can reduce the severity of business cycles
- Wages and prices are sticky
- Markets are perfectly competitive
- Market equilibrium is often suboptimal
Q9 | In real business cycle models, business cycles are caused by ------------------,while in new Keynesian model business cycles are caused by-------------------
- Aggregate demand ; Aggregate demand
- Aggregate demand ; Aggregate supply
- Aggregate supply; Aggregate demand
- Fiscal policy ; monetary policy
Q10 | Which of the following models view changes in real supply-side factors as determinantsof short-run fluctuations in output and employment?
- New classical models
- Political business cycle models
- Keynesian models
- Real business cycle models
Q11 | An example of negative productivity shocks that could cause recessions is
- A hurricane which destroys capital
- A decrease in the price of oil
- Reductions in defense spending
- All of the above
Q12 | The real business cycle theory and the new classical theory agree that
- Business cycles are driven by changes in Aggregate demand
- Expectations are formed rationally
- Imperfect information plays a big role in business cycles
- None of the above
Q13 | Advocates of real business cycle theories argue that all of the following could cause a recession except
- A fall in consumer expectations
- Natural disasters
- Higher taxation
- Increase in the price of oil
Q14 | Real business cycle and new Keynesian models disagree upon
- Whether people form their expectations rationally
- Whether changes in unemployment are voluntary or involuntary
- Whether individuals engage in optimizing behavior at all times
- Whether changes in the money supply affect output in the long-run
Q15 | In the real business cycle theory during a period when output is falling
- Workers are voluntary giving up their jobs
- The quantity supplied of labor is falling
- All of the above
- None of the above
Q16 | According to the real business cycle theory business cycles
- Can be eliminated with appropriate monetary and fiscal policy
- Are natural and efficient reactions to changes in productivity
- Do not occur
- Occur infrequently
Q17 | According to real business cycle theory an increase in taxes
- Would significantly reduce labor supply, increase employment, and decrease output
- A decline in employment but not in output
- Would significantly reduce labor supply, decrease employment, and decrease output
- No change in output and employment
Q18 | Many economists who accept the real business cycle explanations of economic fluctuations
- Believe that the Sharpe rise in the relative price of imported oil was the central cause of the deep recession in the United States in the mid-1970s
- Believe that the restrictive Federal reserve Monetary policy was the central cause of the deep recession in the United States in the mid-1970s
- Believe that the Sharpe rise in the relative price of imported oil was not the main cause of the deep recession in the United States in the mid-1970s
- Both a and c
Q19 | New Keynesian theories of efficiency wages imply
- Voluntary unemployment
- Real wage rigidity
- Changes in unemployment represent changes in the natural rate of unemployment
- None of the above
Q20 | The first Nobel prize winner for Economics was
- Hicks
- Myrdal
- Samuelson
- Turbergen
Q21 | Which of the following is the least liquid asset?
- Machines
- Money
- Shares
- Bonds
Q22 | The five year plan in India are launched after the approval of
- The President and Prime Minister
- The Rajya Sabha
- The National Development Council (NDC)
- The Lok Sabha
Q23 | Harrod-Domar model was formed the basis of which plan
- First plan
- Third plan
- Second plan
- None of the above
Q24 | Deductive method
- Moves from general to particular
- Moves from particular to general
- Is based on hypothesis
- Both a and b
Q25 | The equity of Reserve Bank of India in National Housing Bank is:
- 49%
- 51%
- 71%
- 100%