Question 1

The interest rate paid on bonds is known as:

Accepted Answer

A)  Call rate
B)  Coupon rate
C)  Repo rate
D)  Bank rateE) B) and D)
F) A) and B)

Question 2

Employment equilibrium in the Classical theory is achieved through:

Accepted Answer

A)  Wage-Price flexibility.
B)  Changes in aggregate demand
C)  Changes in aggregate supply
D)  None of these.E) A) and B)
F) A) and C)

Question 3

The monetary policy is completely ineffective when the LM curve is:

Accepted Answer

A)  Vertical .
B)  Horizontal.
C)  Upward sloping.
D)  Downward slopingE) A) and D)
F) A) and 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.E) A) and B)
F) B) and D)

Question 5

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 of interest
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 interestE) B) and C)
F) B) and D) B

Question 6

Market does not clear is a proposition of:

Accepted Answer

A)  Neoclassical theory.
B)  Keynesian Economics
C)  Monetarism
D)  Rational expectationsE) A) and B)
F) A) and C)

Question 7

Ratio of consumption expenditure to any particular level of income

Accepted Answer

A)  MPS
B)  APS
C)  APC
D)  MPCE) A) and C)
F) All of the above

Question 8

Policy Neutrality is the main proposition of:

Accepted Answer

A)  Supply Side Economics.
B)  Keynesian Economics
C)  Monetarism
D)  Rational expectations hypothesisE) All of the above
F) None of the above

Question 9

When MPS = 0.2, MPC will be

Accepted Answer

A)  0.8
B)  0.2
C)  1.2
D)  20E) A) and C)
F) None of the above

Question 10

Income is a ------- variable

Accepted Answer

A)  Flow
B)  Discontinuous
C)  Stock
D)  None of the aboveE) None of the above
F) B) and C)

Question 11

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 ISE) A) and D)
F) B) and C)

Question 12

According to Keynes, rising aggregate income is always associated with

Accepted Answer

A)  Higher saving rate
B)  Higher import
C)  Lower export
D)  Low productionE) A) and B)
F) C) and D) A

Question 13

In a closed economy, the value of multiplier , when MPC is 0.90

Accepted Answer

A)  25
B)  90
C)  10
D)  9E) All of the above
F) A) and B) C

Question 14

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 decreasesE) A) and D)
F) None of the above

Question 15

Changes in the subjective or objective factors

Accepted Answer

A)  Never affect consumption function
B)  Always cause downward shift in consumption function
C)  Always cause upward shift in consumption function
D)  They cause upward or downward shifts in consumption functionE) A) and D)
F) A) and C)

Exam 6: Macroeconomic Equilibrium and Concepts

The interest rate paid on bonds is known as:

Correct Answer
verified

Employment equilibrium in the Classical theory is achieved through:

Correct Answer
verified

The monetary policy is completely ineffective when the LM curve is:

Correct Answer
verified

Who invented the General Equilibrium analysis?

Correct Answer
verified

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

Correct Answer
verified
B

Market does not clear is a proposition of:

Correct Answer
verified

Ratio of consumption expenditure to any particular level of income

Correct Answer
verified

Policy Neutrality is the main proposition of:

Correct Answer
verified

When MPS = 0.2, MPC will be

Correct Answer
verified

Income is a ------- variable

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

Correct Answer
verified

According to Keynes, rising aggregate income is always associated with

Correct Answer
verified
A

In a closed economy, the value of multiplier , when MPC is 0.90

Correct Answer
verified
C

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

Correct Answer
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Changes in the subjective or objective factors

Correct Answer
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Exam 6: Macroeconomic Equilibrium and Concepts

The interest rate paid on bonds is known as:

Correct AnswerverifiedShow Answer

Employment equilibrium in the Classical theory is achieved through:

Correct AnswerverifiedShow Answer

The monetary policy is completely ineffective when the LM curve is:

Correct AnswerverifiedShow Answer

Who invented the General Equilibrium analysis?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

Market does not clear is a proposition of:

Correct AnswerverifiedShow Answer

Ratio of consumption expenditure to any particular level of income

Correct AnswerverifiedShow Answer

Policy Neutrality is the main proposition of:

Correct AnswerverifiedShow Answer

When MPS = 0.2, MPC will be

Correct AnswerverifiedShow Answer

Income is a ------- variable

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

According to Keynes, rising aggregate income is always associated with

Correct AnswerverifiedA

In a closed economy, the value of multiplier , when MPC is 0.90

Correct AnswerverifiedC

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

Correct AnswerverifiedShow Answer

Changes in the subjective or objective factors

Correct AnswerverifiedShow Answer

Correct Answer
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B

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A

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C

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