Macroeconomics, Theories and Policies 2 MCQs and Notes

P

Priyanka Tomar • 35.28K Points
Coach

Q 1. Why does a temporary decrease in government purchases decrease labour supply in the classical model?

(A) the fall in government spending decreases labour demand, decreasing the real wage, and so people decrease their labour supply.

(B) the decrease in current or future taxes needed to pay for the decrease in government purchases increases people\s wealth.

(C) people prefer to work less when the government is doing less for them.

(D) decreased government purchases make people worse off, so they work less hours.

S

Shiva Ram • 30.44K Points
Instructor I

Q 2. According to the basic classical model, an increase in the money supply will cause

(A) employment to increase.

(B) the price level to increase.

(C) output to increase.

(D) investment to increase.

S

Shiva Ram • 30.44K Points
Instructor I

Q 3. Demand-side unemployment is partly caused by:

(A) imperfections in the labour market

(B) occupational and geographic immobility of factors

(C) demographic changes

(D) a lack of aggregate demand

P

Priyanka Tomar • 35.28K Points
Coach

Q 4. When there are vacancies in the job-market, but also high levels of unemployment, then we could say that this unemployment is?

(A) cyclical

(B) regional

(C) seasonal

(D) structural

S

Shiva Ram • 30.44K Points
Instructor I

Q 5. Suppose that the money stock is $10 billion, each dollar generates $ 5worth of spending, and the NAIRU is 7%. According to the quantity theory of what is nominal GDP (income)

(A) $ 350 million

(B) $ 70 million

(C) $ 35 million

(D) $ 50 million

V

Vinay • 28.75K Points
Instructor II

Q 6. The economist who proposed that,” inflation is always and every where monetary phenomenon”was

(A) j. m keynes

(B) john r hicks

(C) milton friedman

(D) franco modigliani

R

Rakesh Kumar • 28.44K Points
Instructor II

Q 7. what is the foundation of monetarism?

(A) quantity theory of money

(B) demand theory

(C) islm model

(D) none of these

S

Shiva Ram • 30.44K Points
Instructor I

Q 8. According to monetary approach a revaluation of a nation’s currency

(A) increase the nation’s demand for money

(B) increase the nation’s supply of money

(C) reduces the nation’s demand for money

(D) reduces the nation’s supply of money

R

Ranjeet • 34.60K Points
Instructor I

Q 9. According to monetarists, money supply constitutes

(A) currency+ demand deposits

(B) currency +demand deposits+time deposits

(C) currency + demand deposits + equity shares

(D) currency + all kinds of banks + deposits with other institutions + borrowing

S

Shiva Ram • 30.44K Points
Instructor I

Q 10. Which of the following is true with respect to the monetary approach to the balance of payments?

(A) it views the balance of payments as an essentially monetary phenomenon

(B) a balance of payments deficit results from an excess demand of money in the nation

(C) a balance of payments surplus results from an excess supply of money

(D) balance of payments disequilibrium are not automatically corrected in the long run