Question 1

The average number of times that a dollar is spent in buying the total amount of final goods and

Accepted Answer

A) gross national product 
B) the spending multiplier 
C) the money multiplier. 
D) Velocity

Question 2

According to Adam Smith , employers earned profits due to ----------used by them

Accepted Answer

A) Land 
B) Labor 
C) Capital 
D) Enterpreuer

Question 3

The book Principles of Economics was published in the year

Accepted Answer

A) 1776 
B) 1932 
C) 1890 
D) 1936

Question 4

The type of equilibirium that deals with the determination of price and quantity of only one

Accepted Answer

A) General equilibrium 
B) Partial equilibrium 
C) Zero Equilibrium 
D) Pareto efficiency

Question 5

In Case the supply of a factor of production is fixed , its entire income will be -----

Accepted Answer

A) Economic Rent 
B) Marginal rent 
C) Rent 
D) Profit

Question 6

Nominal GDP in terms of is represented by how much money there is and how many times it is spent, while Nominal GDP in terms of------------- is represented by all goods and services and their prices.

Accepted Answer

A) buyers & sellers 
B) domestic production & international production 
C) profit & loss 
D) imports & exports

Question 7

The Fisher effect .

Accepted Answer

A) States that nominal interest rates are equal to the real interest rates plus the expected inflation rate 
B) States that nominal interest rates are equal to real interest rates minus the expected inflation rate 
C) Predicts that as the expected inflation rate rises, so do nominal interest rates 
D) Predicts that as the expected inflation rate rises, real interest rates fall

Exam 1: Economic Theories and Concepts