Q. The classical economists focused on the role of money as,
✅ Correct Answer: (A)
medium of exchange
Macroeconomics, Theories and Policies 2 MCQs and Notes
Q. In the Keynesian system speculative demand for money arises because of, 1 : uncertainty of future interest rate. 2 : unexpected expenditures. 3 : To bridge the gap between income and eventual expenditures. 4 : Relationship between changes in the interest rates and bond price. Codes :
✅ Correct Answer: (B)
1 & 4 are correct
Q. Which of the following is not specifically mentioned as a determinant of the demand formoney ?
✅ Correct Answer: (D)
real rate of interest
Q. Assertion (A) : In liquidity trap, the demand for money is perfectly interest elastic. Reason (R) : Because in this situation, all the investors expect the market rate of interest to rise towards the natural rate of interest. Codes :
✅ Correct Answer: (A)
(a) & (r) both are correct and (r) is the correct explanation of (a)
Q. Cambridge K is related to –
✅ Correct Answer: (B)
cash balance approach
Q. Classical dichotomy is based on –
✅ Correct Answer: (A)
neutrality of money
Q. Under perfect competition firm hire labour until-
✅ Correct Answer: (C)
money wage rate = general price level
Q. Real balance effect is equal to –
✅ Correct Answer: (C)
pigou effect + keynes effect
Q. In which of the following market Pigou effect operates?
✅ Correct Answer: (A)
goods market
Q. In which of the following market Keynes effect operates?
✅ Correct Answer: (C)
money market