Questions and answers for exam Preparation

MCQs

Total Questions : 131 | Page 10 of 14 pages

Question 91. When economists use the term real business cycle theory they are suggesting that business cycles are caused by ?

Shifts in aggregate supply
changes in export demand due to the state of the world economy
business confidence
business expectations

Discuss Question

Answer: Option A. -> Shifts in aggregate supply
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

Question 92. In the long run, the Phillips curve will be vertical at the natural rate of unemployment if ?

the long-run aggregate demand curve is horizontal at the natural rate of inflation
the long run aggregate demand curve is vertical at potential GDP
the long run aggregate demand curve is vertical at potential GDP
The long run supply curve is horizontal at the natural rate of inflation

Discuss Question

Answer: Option C. -> the long run aggregate demand curve is vertical at potential GDP
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

Question 93. The Phillips curve indicates that there is a ?

negative relationship between the inflation rate and labor demand
positive relationship between labor supply and the inflation rate
positive relationship between the inflation rate and the employment
negative relationship between the inflation rate and the unemployment rate

Discuss Question

Answer: Option D. -> negative relationship between the inflation rate and the unemployment rate
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

Question 94. Potential GDP is the level of aggregate output ?

that can be produced if structural unemployment is zero
that can be produced at a zero-unemployment rate
that can be sustained in the long run without inflation
that can be sustained in the long run, if the inflation rate is zero

Discuss Question

Answer: Option C. -> that can be sustained in the long run without inflation
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

Question 95. According to the classical economists, those who are not working ?

have chosen not to work at the market wage
have given up looking for a job but would accept a job at the current wage if one were offered to them.
are too productive to be hired at the current wage
are unable to find a job at the current wage rate

Discuss Question

Answer: Option A. -> have chosen not to work at the market wage
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

Question 96. An advocate of the classical model of the economy would claim that unemployment is created when the ____ is above its equilibrium level in the ______?

price level, aggregate economy
tax rate, government budget
wage rate, labor market
interest rate, market for loanable funds

Discuss Question

Answer: Option C. -> wage rate, labor market
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

Question 97. We would normally expect the size of the labor force to be _____ than the number or workers willing to accepts job offers at any real wage rate ?

Smaller
Larger
the same size
None of these

Discuss Question

Answer: Option B. -> Larger
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

Question 98. If somebody is prepared to work at the going wage rate but cannot find work then they are victims of ?

voluntary unemployment
classical unemployment
voluntary unemployment
Frictional unemployment

Discuss Question

Answer: Option C. -> voluntary unemployment
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

Question 99. The classical view of the labor market is basically consistent with the assumption of _________ aggregate supply curve?

a vertical (or almost vertical)
a downward sloping
a horizontal (or almost horizontal)
an upward sloping

Discuss Question

Answer: Option A. -> a vertical (or almost vertical)
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!

Question 100. If the income tax rate changes from 30% to 40% on income over Rs30,000 and a person’s income is Rs 31,000 then her marginal tax rate is ?

Discuss Question

Answer: Option D. -> 40%
NO EXPLANATION IS AVAILABLE FOR THIS QUESTION!