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PPSC FPSC KKPSC BPSC SPSC AJKPSC Lecturer Economics Test 44

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Test Instructions:-
Test Name	Lecturer Economics
Subject	Economics Test 44
Test Type	MCQs
Total Questions	25
Total Time	20 Minutes
Total Marks	100

You have 20 minutes to pass to the quiz.

Lecturer Economics Online Test No. 44

1 / 25

The correct definition of desired aggregate expenditure with a government sector is given by:

AE = S + (T - G)

AE = C + S + T

AE = C + I +G

AE = C + I + G + T

2 / 25

One effect of crowding out caused by higher government spending would be to:

lower the interest rate charged to business borrowers

decrease real GDP

reduce the increase in Y caused by higher G

cause consumers to increase autonomous consumption

3 / 25

An increase in current income would cause the:

C and AE curves to shift upward

C but not the AE curve to shift upward

AE but not the C curve to shift upward

C and AE curve to remain unchanged

4 / 25

The tax multiplier is described by all of the following except:

it is equal to C/T

its absolute value is always one less than the expenditure multiplier

it is considered to be a negative number

it is calculated by -MPC/(1-MPC)

5 / 25

If investment increases then the equilibrium amount of saving:

decrease

stays the same

increase by less than investment increases

increases by the same amount as investment

6 / 25

If I and G increases by $10 billion, desired aggregate expenditure will increase by:

$10 billion

10 billion*expenditure multiplier

$10 billion*MPC

10 billion*(accelerator)

7 / 25

The aggregate expenditure curve:

is the same as the aggregate demand curve

related total desired expenditures to income

relates total actual expenditures to income

cannot take account of foreign transaction

8 / 25

If G increases by $100 billion how much should T the increased if the government wants Y to increase by $100 billion and the MPC is 0.9?

$10 billion

$90 billion

$100 billion

$1,000 billion

9 / 25

According to the autonomous expenditure multiplier in the income/expenditure model, an increase in government spending increases output by:

more than an equal increase in investment

the same amount as an equal increase in investment

less than an equal increase in investment

less than an equal reduction in taxes

10 / 25

If real GDP is $80 billion below full employment, how much should government spending be increased to restore full employment if the MPC is 0.75?

$10 billion

$20 billion

$80 billion

$320 billion

11 / 25

If the money supply is constant, then as the price level falls:

the aggregate supply curve shifts up

the aggregate supply curve shifts down

private consumption spending decreases

real money balances increase

12 / 25

In the economic slowdown in the early 1990s business activity was reduced while:

interest rates rose to record levels

inflation rose to record levels

real output actually rose

inventories have not increased

13 / 25

In general crowding out causes the effect of an increase in government expenditures on output to:

be larger

be smaller

be one

be zero

14 / 25

If the MPS equals 0.25 then the value of the expenditure multiplier is:

15 / 25

If twenty cents out of each additional dollar of income is saved then the simple expenditure multiplier is:

one

two

five

one-fifth

16 / 25

The 45-degreee line in the income/expenditure model shows points at which:

income and expenditure are equal

the economy is at full employment

the MPC is equal to 1

the MPC is equal to 0.5

17 / 25

Which of the following is an increase in autonomous expenditures?

an increase in government spending

an increase in taxes

an increase in marginal prosperity to consume

an increase in the marginal prosperity to save

18 / 25

The assumption made about desired government expenditure in the basic Keynesian model is the:

G increases with income

G is autonomous or independent of Y

G and T must always balance

Government expenditure has a multiplier of one

19 / 25

When taxes are introduced into the income/expenditure model the:

AE and C survey shift upward by the amount of T

AE and C curves shift downward by the amount of T

AE and C curves shift downward by the amount of the MPC times T

AE curve shifts upward by the amount of T

20 / 25

In a depression economy along a horizontal aggregate supply curve:

wages and prices are continuously falling

real GDP cannot be increases or decreases

wages and prices are sticky downwards

unemployment is relatively low

21 / 25

An increase in the foreign price level with the nominal exchange rate unchanged causes imports and exports to:

increase

decrease

remain constant

decrease and increase respectively

22 / 25

If government taxes rise by $200 and the MPS is 0.25 what is the predicted impact on desired aggregate expenditure?

C will increase by $200

C will fall by $50

C will fall by $150

C will fall by $200

23 / 25

If the marginal prosperity to consume is 0.75 then holding interest rates constant, a $1 billion increase in taxes will cause the Keynesian-equilibrium level of output to:

increase by $4 billion

increase by $3 billion

decrease by $1 billion

decrease by $3 billion

24 / 25

Aggregate expenditures would rise due to an increase in all of the following except:

consumption

investment

government spending

imports

25 / 25

The aggregate demand curve to the Keynesian model is:

vertical because of unemployment

horizontal because of unemployment

downward sloping cause as prices rise real wealth falls reducing consumption

none of them

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