Q. As the economy nears full employment the aggregate supply curve tend to
✅ Correct Answer: (B)
become sleeper
Macroeconomics, Theories and Policies 2 MCQs and Notes
Q. Why does a temporary decrease in government purchases decrease labour supply in the classical model?
✅ Correct Answer: (C)
the decrease in current or future taxes needed to pay for the decrease in government purchases increases people wealth
Q. If the Keynesian consumption function is C=10+0.8Yd then, if disposable income is 1000, what is amount of total consumption ?
✅ Correct Answer: (C)
810
Q. Liquidity trap sets a loop:
✅ Correct Answer: (B)
above which discount rate cannot rise
Q. The formula to compute the spending multiplier is
✅ Correct Answer: (B)
1/(1-mpc)
Q. The equation of exchange is
✅ Correct Answer: (D)
m*v=p*t
Q. In whose economic theories, Malthus theories are in the base?
✅ Correct Answer: (C)
keynes
Q. Which of the following statements does not hold true in case of the Keynesian economics?
✅ Correct Answer: (D)
as schedule is vertical, and output, and employment are completely supply determined.
Q. Liquidity trap is a situation when,
✅ Correct Answer: (A)
all potential investors expect the rate of interest to rise in future.
Q. Identify the correct chronological order of the following classical economists.
✅ Correct Answer: (B)
adam smith, ricardo, malthus, mill