Macroeconomics Theories And Policies II Set 4
On This Page
This set of Macroeconomics, Theories and Policies 2 Multiple Choice Questions & Answers (MCQs) focuses on Macroeconomics Theories And Policies II Set 4
Q1 | The purpose of Keynesian analysis is to explain what to determines the
- size of the labor force
- price level
- amount of money required in the economy
- levels of national income, output and employment
Q2 | In the Keynesian range of the SRAS, if AD shift to the right, then
- the price level falls
- the price level rises
- real gdp is unchanged
- the price level is unchanged
Q3 | In the very short term, in the Keynesian model which of the following is fixed and does notchange when GDP changes
- planned investment
- planned consumption
- planned imports
- all of the above
Q4 | The slope of the consumption function is (Keynesian)
- less than the slope of the 45 degree line, but not equal to zero
- greater than the slope of the 45 degree line
- equal to the slope of the 45 degree line
- equal to zero
Q5 | A decrease in expected future income, ______ consumption expenditure and ______ saving.
- increases: increases
- increases: decreases
- decreases: increases
- decreases: decreases
Q6 | If the aggregate supply curve is perfectly elastic as in the Keynesian model at low level ofnational incomes, as increase in AD will cause an increase in
- the rate of inflation
- the level of real national output
- the government budget deficit
- the level of consumer debt
Q7 | Attempts to force inflation below no-accelerating inflation rate of unemployment (NAIRU)will cause:
- inflation accelerate without any change in employment or output
- inflation to decelerate with rising employment and output
- inflation to decelerate with employment and output remaining the same
- inflation to remain unchanged with fall in employment and output
Q8 | Which of the following is true with respect to the monetary approach to the balance ofpayments?
- it views the balance of payments as an essentially monetary phenomenon
- a balance of payments deficit results from an excess demand of money in the nation
- a balance of payments surplus results from an excess supply of money
- balance of payments disequilibrium are not automatically corrected in the long run
Q9 | According to monetarists, money supply constitutes
- currency+ demand deposits
- currency +demand deposits+time deposits
- currency + demand deposits + equity shares
- currency + all kinds of banks + deposits with other institutions + borrowing
Q10 | According to monetary approach a revaluation of a nation’s currency
- increase the nation’s demand for money
- increase the nation’s supply of money
- reduces the nation’s demand for money
- reduces the nation’s supply of money
Q11 | what is the foundation of monetarism?
- quantity theory of money
- demand theory
- islm model
- none of these
Q12 | The economist who proposed that,” inflation is always and every where monetaryphenomenon”was
- j. m keynes
- john r hicks
- milton friedman
- franco modigliani
Q13 | Suppose that the money stock is $10 billion, each dollar generates $ 5worth of spending, andthe NAIRU is 7%. According to the quantity theory of what is nominal GDP (income)
- $ 350 million
- $ 70 million
- $ 35 million
- $ 50 million
Q14 | When there are vacancies in the job-market, but also high levels of unemployment, then wecould say that this unemployment is?
- cyclical
- regional
- seasonal
- structural
Q15 | Demand-side unemployment is partly caused by:
- imperfections in the labour market
- occupational and geographic immobility of factors
- demographic changes
- a lack of aggregate demand
Q16 | According to the basic classical model, an increase in the money supply will cause
- employment to increase.
- the price level to increase.
- output to increase.
- investment to increase.
Q17 | Why does a temporary decrease in government purchases decrease labour supply in theclassical model?
- the fall in government spending decreases labour demand, decreasing the real wage, and so people decrease their labour supply.
- the decrease in current or future taxes needed to pay for the decrease in government purchases increases people\s wealth.
- people prefer to work less when the government is doing less for them.
- decreased government purchases make people worse off, so they work less hours.