Question 1

Which policy is effective in the intermediate range?

Accepted Answer

A) monetary policy 
B) fiscal policy 
C) both policies 
D) none of these 
A) monetary policy 
B) fiscal policy 
C) both policies 
D) none of these C

Question 2

The marginal productivity of labour:

Accepted Answer

A) increases when the price of the good sold increases, ceteris paribus 
B) decreases when there is an adverse supply shock, ceteris paribus 
C) increase when more workers are hired, ceteris paribus 
D) decreases when there is an increase in the quantity of capital, ceteris paribus 
A) increases when the price of the good sold increases, ceteris paribus 
B) decreases when there is an adverse supply shock, ceteris paribus 
C) increase when more workers are hired, ceteris paribus 
D) decreases when there is an increase in the quantity of capital, ceteris paribus B

Question 3

When investment is negatively related to the rate of interest, equilibrium output in the goods market:

Accepted Answer

A) is unrelated to the rate of interest 
B) is inversely related to the rate of interest 
C) is positively related to the rate of interest 
D) falls as the rate of interest decreases 
A) is unrelated to the rate of interest 
B) is inversely related to the rate of interest 
C) is positively related to the rate of interest 
D) falls as the rate of interest decreases B

Question 4

Who invented the General Equilibrium analysis?

Accepted Answer

A) l. walras. 
B) w. leontief 
C) j.m.keynes. 
D) none of these. 
A) l. walras. 
B) w. leontief 
C) j.m.keynes. 
D) none of these.

Question 5

The IS curve has a------slope

Accepted Answer

A) positive 
B) negative 
C) zero 
D) none of these 
A) positive 
B) negative 
C) zero 
D) none of these

Question 6

LM curve shows the equilibrium condition in ---------- market

Accepted Answer

A) goods market 
B) product market 
C) money market 
D) none of these 
A) goods market 
B) product market 
C) money market 
D) none of these

Question 7

The natural rate of unemployment equals the sum of those who are:

Accepted Answer

A) frictionally and structurally unemployed 
B) frictionallyandcyclicallyunemployed 
C) structurallyandcyclicallyunemployed 
D) frictionally structurally and cyclically unemployed 
A) frictionally and structurally unemployed 
B) frictionallyandcyclicallyunemployed 
C) structurallyandcyclicallyunemployed 
D) frictionally structurally and cyclically unemployed

Question 8

When saving is greater than investment in a two-sectormodel,

Accepted Answer

A) outputshould increase 
B) output should decrease 
C) output should not change 
D) none of these 
A) outputshould increase 
B) output should decrease 
C) output should not change 
D) none of these

Question 9

The marginal productivity of labour is:

Accepted Answer

A) the incremental output due to an increase in capital, ceteris paribus 
B) the incremental output due to an increase in labour, ceteris paribus. 
C) the incremental output due to a change in technology, ceteris paribus 
D) the incremental output due to a change in technology and a change in the 
A) the incremental output due to an increase in capital, ceteris paribus 
B) the incremental output due to an increase in labour, ceteris paribus. 
C) the incremental output due to a change in technology, ceteris paribus 
D) the incremental output due to a change in technology and a change in the

Question 10

The perfectly elastic segment of the LM curve is:

Accepted Answer

A) keynesian range 
B) classical range 
C) intermediate range 
D) none of these 
A) keynesian range 
B) classical range 
C) intermediate range 
D) none of these

Question 11

ISLM model was developed by:

Accepted Answer

A) hicks 
B) keynes 
C) friedman 
D) none of these 
A) hicks 
B) keynes 
C) friedman 
D) none of these

Question 12

When there is an increase in the autonomous money supply, ceteris paribus, LM shifts:

Accepted Answer

A) leftward 
B) rightward 
C) no shift 
D) none 
A) leftward 
B) rightward 
C) no shift 
D) none

Question 13

The LM curve has a------slope

Accepted Answer

A) positive 
B) negative 
C) zero 
D) none of these 
A) positive 
B) negative 
C) zero 
D) none of these

Question 14

The simplest ISLM model consists of:

Accepted Answer

A) two markets 
B) three markets 
C) four markets 
D) five markets 
A) two markets 
B) three markets 
C) four markets 
D) five markets

Question 15

Simultaneous equilibrium in the money (LM) and goods (IS) market exists:

Accepted Answer

A) at an unlimited number of output levels and rates of interest 
B) at only one output level and rate ofinterest 
C) at an unlimited number of output levels and only one rate of interest 
D) at only one output level and an unlimited number of rates of interest 
A) at an unlimited number of output levels and rates of interest 
B) at only one output level and rate ofinterest 
C) at an unlimited number of output levels and only one rate of interest 
D) at only one output level and an unlimited number of rates of interest

Question 16

In which of the following situations will an increase in the money supply have no effect upon output?

Accepted Answer

A) lm is steeply sloped and is is steeply sloped 
B) lm is vertical and is is steeply sloped 
C) lm is steeply sloped and is is vertical 
D) lm is relatively flat as is is 
A) lm is steeply sloped and is is steeply sloped 
B) lm is vertical and is is steeply sloped 
C) lm is steeply sloped and is is vertical 
D) lm is relatively flat as is is

Question 17

Frictional unemployment exists:

Accepted Answer

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 
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

Question 18

Which policy is effective in the Classical range?

Accepted Answer

A) monetary policy 
B) fiscal policy 
C) incomes policy 
D) none of these 
A) monetary policy 
B) fiscal policy 
C) incomes policy 
D) none of these

Question 19

The equilibrium in the product market is represented by which curve?

Accepted Answer

A) is 
B) lm 
C) demand 
D) supply curve 
A) is 
B) lm 
C) demand 
D) supply curve

Question 20

Policy Neutrality is the main proposition of:

Accepted Answer

A) supply side economics. 
B) keynesian economics 
C) monetarism 
D) rational expectations hypothesis 
A) supply side economics. 
B) keynesian economics 
C) monetarism 
D) rational expectations hypothesis

Which policy is effective in the intermediate range?

The marginal productivity of labour:

When investment is negatively related to the rate of interest, equilibrium output in the goods market:

Who invented the General Equilibrium analysis?

The IS curve has a------slope

LM curve shows the equilibrium condition in ---------- market

The natural rate of unemployment equals the sum of those who are:

When saving is greater than investment in a two-sectormodel,

The marginal productivity of labour is:

The perfectly elastic segment of the LM curve is:

ISLM model was developed by:

When there is an increase in the autonomous money supply, ceteris paribus, LM shifts:

The LM curve has a------slope

The simplest ISLM model consists of:

Simultaneous equilibrium in the money (LM) and goods (IS) market exists:

In which of the following situations will an increase in the money supply have no effect upon output?

Frictional unemployment exists:

Which policy is effective in the Classical range?

The equilibrium in the product market is represented by which curve?

Policy Neutrality is the main proposition of:

Classical Economic Theory

Macro Economics Terminology and Concepts

Keynesian Economics and Related Concepts

National Income Accounting and Keynesian Economics

Economic Theory and Methodology: Exploring the Fundamentals of Economics

Filters

Exam 2: Economics Model and IS-LM Analysis

Which policy is effective in the intermediate range?

The marginal productivity of labour:

When investment is negatively related to the rate of interest, equilibrium output in the goods market:

Who invented the General Equilibrium analysis?

The IS curve has a------slope

LM curve shows the equilibrium condition in ---------- market

The natural rate of unemployment equals the sum of those who are:

When saving is greater than investment in a two-sectormodel,

The marginal productivity of labour is:

The perfectly elastic segment of the LM curve is:

ISLM model was developed by:

When there is an increase in the autonomous money supply, ceteris paribus, LM shifts:

The LM curve has a------slope

The simplest ISLM model consists of:

Simultaneous equilibrium in the money (LM) and goods (IS) market exists:

In which of the following situations will an increase in the money supply have no effect upon output?

Frictional unemployment exists:

Which policy is effective in the Classical range?

The equilibrium in the product market is represented by which curve?

Policy Neutrality is the main proposition of:

Classical Economic Theory

Macro Economics Terminology and Concepts

Keynesian Economics and Related Concepts

National Income Accounting and Keynesian Economics

Economic Theory and Methodology: Exploring the Fundamentals of Economics

Filters