ECO403 Quiz 13 July 2010

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Quiz Start Time: 11:14 AM Time Left 87
sec(s)


Question # 1 of 15 ( Start time: 11:14:04 AM ) Total Marks: 1
In a small open economy with a floating exchange rate, fiscal policy will be ineffective because:
Select correct option:

• Monetary policy will completely offset it.
  
• The exchange rate will remain constant.
  
• A fall in net exports will offset any increases in government purchases or consumption.
  
• The exchange rate will rise by the same amount as the interest rate
  

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Quiz Start Time: 11:14 AM Time Left 86
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Question # 2 of 15 ( Start time: 11:15:19 AM ) Total Marks: 1
Real interest rates are the:
Select correct option:

• Nominal interest rates plus the inflation rate.
  
• Interest rates quoted in the market.
  
• Interest rates quoted in the market minus the inflation rate.
  
• Interest rates quoted in the market plus the expected inflation rate.
  

Quiz Start Time: 11:14 AM Time Left 87
sec(s)


Question # 3 of 15 ( Start time: 11:16:29 AM ) Total Marks: 1
The idea that government spending causes a reduction in private investment is called:
Select correct option:

• Fiscal drag.
  
• Crowding-out.
  
• Investment blight.
  
• Accelerator effect.
  

Quiz Start Time: 11:14 AM Time Left 87
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Question # 4 of 15 ( Start time: 11:17:43 AM ) Total Marks: 1
In the steady state for the Solow model of economic growth with depreciation (ð), positive labor force growth (n) and technological change (a), we would expect Y/L to grow:
Select correct option:

• At the rate (a + n + ð).
  
• At the rate (a + n - ð).
  
• At the rate (a + n).
  
• At the rate a.
  

Quiz Start Time: 11:14 AM Time Left 87
sec(s)


Question # 5 of 15 ( Start time: 11:19:09 AM ) Total Marks: 1
If people suddenly wish to hold more money at each interest rate:
Select correct option:

• The money demand curve will shift to the right.
  
• The LM curve will shift upward (to the left).
  
• Real income will fall.
  
• All of the given option
  

s.

Quiz Start Time: 11:14 AM Time Left 84
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Question # 6 of 15 ( Start time: 11:19:47 AM ) Total Marks: 1
The relative price of domestic goods in terms of foreign goods is known as:
Select correct option:

• Real exchange rate.
  
• Nominal exchange rate.
  
• Discount rate.
  
• Inflation rate.
  

Quiz Start Time: 11:14 AM Time Left 87
sec(s)


Question # 7 of 15 ( Start time: 11:20:08 AM ) Total Marks: 1
An asset that is included in M3 but not in M2 is:
Select correct option:

• Currency.
  
• Checkable deposits.
  
• Small-denomination certificates of deposit.
  
• Large-denomination certificates of deposit.
  

Quiz Start Time: 11:14 AM Time Left 87
sec(s)


Question # 8 of 15 ( Start time: 11:20:53 AM ) Total Marks: 1
If labor productivity per week is 200 units and there are 5 employees what is the total output?
Select correct option:

• 40 units.
  
• 95 units.
  
• 1000 units.
  
• 200 units.
  

Quiz Start Time: 11:14 AM Time Left 86
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Question # 9 of 15 ( Start time: 11:21:31 AM ) Total Marks: 1
Which of the following statements about net exports is correct?
Select correct option:

• The term C + I + G understate domestic production of goods and services because it leaves out exports, which must be subtracted out of GDP to obtain the correct figure.
  
• The term C + I + G overstates domestic production of goods and services because it contains imports, which must be subtracted out of GDP to obtain the correct figure.
  
• The difference between exports and imports is negative when the country is a net exporter.
  
• Before 1976, the United States was generally a net importer. Only after 1976, exports began to exceed imports.
  

Quiz Start Time: 11:14 AM Time Left 86
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Question # 10 of 15 ( Start time: 11:22:48 AM ) Total Marks: 1
Stock market boom or crash is an example of which of the following?
Select correct option:

• IS Shock
  
• LM Shock
  
• Demand Shock
  
• Supply Shock
  

Quiz Start Time: 11:14 AM Time Left 87
sec(s)


Question # 11 of 15 ( Start time: 11:23:35 AM ) Total Marks: 1
If State Bank of Pakistan wishes to pursue a “tight” monetary policy it would:
Select correct option:

• Increase the minimum reserve asset ratio.
  
• Buy government securities on the open market.
  
• Lower interest rates.
  
• Sell government securities on the open market.
  

Quiz Start Time: 11:14 AM Time Left 87
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Question # 12 of 15 ( Start time: 11:24:23 AM ) Total Marks: 1
Which plays the most important role in increasing the rate of growth in real GDP per capita over time?
Select correct option:

• Increases in labor productivity
  
• Increases in the money supply
  
• Decreases in the level of inflation
  
• Increases in the real rate of interest
  

Quiz Start Time: 11:14 AM Time Left 72
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Question # 13 of 15 ( Start time: 11:25:23 AM ) Total Marks: 1
Which of the following is the closest definition of the term "investment"?
Select correct option:

• Investment is the purchase of financial assets, such as stocks and bonds
  
• Investment is the value of newly produced capital goods
  
• Investment is the purchase of goods for present consumption
  
• Investment is the accumulation of previous capital
  

Quiz Start Time: 11:14 AM Time Left 85
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Question # 14 of 15 ( Start time: 11:26:50 AM ) Total Marks: 1
Human wants are:
Select correct option:

• Always fixed.
  
• Limited.
  
• Unlimited.
  
• Likely to decrease over time.
  

Quiz Start Time: 11:14 AM Time Left 88
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Question # 15 of 15 ( Start time: 11:27:04 AM ) Total Marks: 1
A common misperception about inflation is that it reduces real wages; this is:
Select correct option:

• True only in the short run.
  
• True only in the Long run.
  
• True only in Command economies.
  
• None of the given options.
  

Quiz Start Time: 12:29 PM Time Left 87
sec(s)
Question # 1 of 15 ( Start time: 12:29:15 PM ) Total Marks: 1
If the U.S. real exchange rate decreases, U.S. ---------------- will fall and U.S. ----------------- will rise.
Select correct option:

• Exports; income
  
• Exports; imports
  
• Income; imports
  
• Imports; exports
  

Quiz Start Time: 12:29 PM Time Left 88
sec(s)


Question # 2 of 15 ( Start time: 12:29:42 PM ) Total Marks: 1
In a macroeconomic model without foreign trade or government spending, aggregate demand is the sum of:
Select correct option:

• Personal saving and private investment.
  
• Personal saving and personal consumption.
  
• Personal consumption and personal income.
  
• Personal consumption and private investment.
  

Quiz Start Time: 12:29 PM Time Left 86
sec(s)


Question # 3 of 15 ( Start time: 12:31:08 PM ) Total Marks: 1
The major difficulty in measuring economic growth in underdeveloped countries is:
Select correct option:

• Lack of skilled manpower.
  
• Lack of supply of empirical data.
  
• Preoccupation with other more important problems.
  
• All of the given options.
  

Quiz Start Time: 12:29 PM Time Left 87
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Question # 4 of 15 ( Start time: 12:31:53 PM ) Total Marks: 1
Which of the following is the best measure of the economic cost of higher unemployment?
Select correct option:

• The loss of potential exports for the economy.
  
• The loss of tax revenue.
  
• The increase in social security benefits paid by the government.
  
• The output of goods and services the unemployed workers could have produced
  

Quiz Start Time: 12:29 PM Time Left 86
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Question # 5 of 15 ( Start time: 12:33:18 PM ) Total Marks: 1
An increase of $1 in government purchases will:
Select correct option:

• Shift the planned expenditure curve upward by $1.
  
• Shift the IS curve to the right by $1/ (1 - MPC).
  
• Not shift the LM curve.
  
• All of the given options.
  

Quiz Start Time: 12:29 PM Time Left 87
sec(s)


Question # 6 of 15 ( Start time: 12:34:29 PM ) Total Marks: 1
Inflation resulting from demand shocks is known as:
Select correct option:

• Demand pull inflation.
  
• Cost push inflation.
  
• Expected inflation.
  
• Food inflation.
  

Quiz Start Time: 12:29 PM Time Left 86
sec(s)
Question # 7 of 15 ( Start time: 12:37:49 PM ) Total Marks: 1
Which of the following equations is correct?
Select correct option:

• Nominal interest rate = real interest rate - inflation
  
• Real interest rate = nominal interest rate + inflation
  
• Real interest rate = nominal interest rate × inflation
  
• Real interest rate = nominal interest rate - inflation
  

Quiz Start Time: 12:29 PM Time Left 88
sec(s)
Question # 8 of 15 ( Start time: 12:39:16 PM ) Total Marks: 1
Which of the following statements best describes the definition of scarcity?
Select correct option:

• There are no buyers willing to purchase what sellers have produced
  
• There is more than enough money to satisfy consumers' wants
  
• Resources are limited in quantity and can be used in different ways
  
• There are not enough goods to satisfy all of the buyers' demand
  

Quiz Start Time: 12:29 PM Time Left 87
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Question # 9 of 15 ( Start time: 12:40:20 PM ) Total Marks: 1
Real GDP (Gross Domestic Product) is measured:
Select correct option:

• In the prices of a base year.
  
• In current dollars.
  
• At a constant output level but at current prices.
  
• As the difference between the current year’s GDP and last year’s GDP.
  

Quiz Start Time: 12:29 PM Time Left 85
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Question # 10 of 15 ( Start time: 12:41:49 PM ) Total Marks: 1
A sustained high rate of growth of an economy results in:
Select correct option:

• High rate of growth of the agriculture sector.
  
• Change in occupational structure in favor of industry.
  
• Rapid industrialization.
  
• All of the given options
  

.

Quiz Start Time: 12:29 PM Time Left 58
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Question # 11 of 15 ( Start time: 12:42:14 PM ) Total Marks: 1
During periods of poor economic performance, real GDP:
Select correct option:

• Declines but unemployment typically does not change.
  
• Declines and unemployment rises sharply.
  
• Is unchanged but unemployment rises sharply.
  
• Declines and unemployment rises moderately.
  

Quiz Start Time: 12:29 PM Time Left 87
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Question # 12 of 15 ( Start time: 12:43:16 PM ) Total Marks: 1
As risk premium ? increases, interest rate increases, investment decreases and IS* curve:
Select correct option:

Shifts leftward.
Shifts rightward.
Does not change.
All of the above are possible.









Quiz Start Time: 12:29 PM Time Left 86
sec(s)
Question # 13 of 15 ( Start time: 12:44:38 PM ) Total Marks: 1
Which of the following is the largest component of total expenditures?
Select correct option:

• Consumption
  
• Investment
  
• Government spending
  
• Net exports
  

Quiz Start Time: 12:29 PM Time Left 86
sec(s)
Question # 14 of 15 ( Start time: 12:45:48 PM ) Total Marks: 1
An increase in the money supply will shift the:
Select correct option:

• IS curve to the left and decrease both the interest rate and the level of income.
  
• LM curve downward (to the right) and increase both the interest rate and the level of income.
  
• IS curve to the right and increase the level of income but decrease the interest rate.
  
• LM curve downward (to the right) and increase the level of income but decrease the interest rate.
  

Quiz Start Time: 12:29 PM Time Left 86
sec(s)
Question # 15 of 15 ( Start time: 12:47:12 PM ) Total Marks: 1
The socially optimal rate of growth is:
Select correct option:

• Zero.
  
• Negative.
  
• Where the marginal social benefit = the marginal social cost.
  
• Total social costs are minimized.
  

[mobeenaslam]

Check current quiz of eco 401 which i solved 13 july 2010. please correct answer if you find some mistakes.