1. |
The classical economists believed that the demand for labour is a function of: |
A. | total money wages |
B. | money wage rate |
C. | total real wages |
D. | real wage rate |
Answer» D. real wage rate |
2. |
In classical theory of employment, there isthe possibility of: |
A. | voluntary unemployment |
B. | no unemployment |
C. | involuntary unemployment |
D. | disguised unemployment |
Answer» A. voluntary unemployment |
3. |
The idea that a general cut in wages will finally lead to a state of full employment was suggested by : |
A. | keynes |
B. | marshall |
C. | j.b.say |
D. | a.c.pigou |
Answer» D. a.c.pigou |
4. |
Say’s law of market says: |
A. | supply creates its own demand |
B. | demand creates supply |
C. | income generates demand |
D. | savings create demand |
Answer» A. supply creates its own demand |
5. |
The aggregate production function implied under classical theory is : |
A. | long run |
B. | short run |
C. | no time element |
D. | none of the above |
Answer» A. long run |
6. |
In the Cambridge equation of M = kPR, the value of kis: |
A. | m/v |
B. | 1/v |
C. | v in fisher’s equation |
D. | none of these |
Answer» B. 1/v |
7. |
As a result of an increase in capital, ceteris paribus, ------- the marginal productivity of labour: |
A. | remains constant |
B. | increase |
C. | decreases |
D. | none of these |
Answer» B. increase |
8. |
In the Fisher’s extended equation of exchange MI VI represents: |
A. | credit money |
B. | primary money |
C. | both primary andcredit money |
D. | general price level |
Answer» A. credit money |
9. |
In Fisher’s transaction velocity model, one of the following is not an assumption: |
A. | velocity of circulation of money is constant |
B. | the volume of transactions is constant |
C. | full employment |
D. | p is considered as an active factor |
Answer» D. p is considered as an active factor |
10. |
The cash balance equation M = KPO was given by: |
A. | keynes |
B. | pigou |
C. | robertson |
D. | marshall |
Answer» D. marshall |
11. |
“Supply creates its own demand “is a law of: |
A. | investment |
B. | inflation |
C. | consumption |
D. | market |
Answer» D. market |
12. |
In the equation MV+ MI VI = PT, ‘M ‘denotes: |
A. | velocity of money |
B. | money in circulation |
C. | bank deposit |
D. | none of these |
Answer» B. money in circulation |
13. |
I classical demand for money, the relationship between money supply and price level is: |
A. | proportional |
B. | non-proportional |
C. | neither proportional nor non-proportional |
D. | none of these |
Answer» B. non-proportional |
14. |
As per classical theory saving is: |
A. | an increasing function of rate of interest |
B. | decreasing function of rate of interest |
C. | decreasing function of level of income |
D. | none of these |
Answer» A. an increasing function of rate of interest |
15. |
The Cambridge version of the quantity theory of money was developed by: |
A. | fisher |
B. | alfred marshall |
C. | pigou |
D. | keynes |
Answer» C. pigou |
16. |
In classical system which of the following keeps the economy at full employment: |
A. | level of saving |
B. | increase in money supply |
C. | adjustment in investment |
D. | adjustment in money wages |
Answer» D. adjustment in money wages |
17. |
In Fisher’s equation of exchange MV=PT, the variation of which produces a proportional change in price: |
A. | m |
B. | v |
C. | p |
D. | t |
Answer» A. m |
18. |
According to classical economists, variationsin savings are due to: |
A. | level of investment |
B. | rate ofinterest |
C. | level of employment |
D. | none of the above |
Answer» B. rate ofinterest |
19. |
In classical theory which of the following is found in the economy: |
A. | unemployment |
B. | involuntary unemployment |
C. | less than full employment |
D. | full employment |
Answer» D. full employment |
20. |
In MV=PT, if M doubles and V and T remain constant, then P will: |
A. | double |
B. | 1/2 |
C. | 1 |
D. | 4 |
Answer» A. double |
21. |
Pigou’s version of Cambridge equation is: |
A. | m = kp/y |
B. | p= kr/m |
C. | mv = pt |
D. | mv = mivi |
Answer» B. p= kr/m |
22. |
The quantity theory of money was restated by: |
A. | alfred marshall |
B. | milton friedman |
C. | irving fisher |
D. | j.m. .keynes |
Answer» B. milton friedman |
23. |
The law which states that supply creates its own demand and overproduction is impossible is known as: |
A. | the law of supply |
B. | say’s law of market |
C. | law of demand |
D. | law of macro economics |
Answer» B. say’s law of market |
24. |
Wages and prices do not adjust quickly to restore general equilibrium is a property of |
A. | classical economics |
B. | keynesian economics |
C. | monetary economics |
D. | supply side economics |
Answer» B. keynesian economics |
25. |
Classicals treated money as a: |
A. | medium of exchange |
B. | store of value |
C. | both |
D. | none |
Answer» A. medium of exchange |
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