McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Master of Arts in Economics (MA Economics) .
| 1. |
The IS-LM Model was developed by |
| A. | j m keynes |
| B. | patinkin |
| C. | hicks and hansen |
| D. | schumpeter |
| Answer» C. hicks and hansen | |
| 2. |
New Classical Economics based on Adaptive Expectation Which one of the following is correct among the following options? |
| A. | 1 alone is correct |
| B. | 2 alone is correct |
| C. | 1 and 2 correct |
| D. | neither 1 nor 2 correct |
| Answer» A. 1 alone is correct | |
| 3. |
According to Keynes, there is |
| A. | no direct relationship between the quantity of money and price level |
| B. | direct relationship between money and price level |
| C. | no direct relationship between demand for money and supply of money |
| D. | direct relationship between demand for money and supply of money |
| Answer» A. no direct relationship between the quantity of money and price level | |
| 4. |
Relationship between changes in the interest rates and bond prices Codes : |
| A. | i and iii are correct |
| B. | i and iv are correct. |
| C. | ii and iii are correct. |
| D. | iii and iv are correct. |
| Answer» B. i and iv are correct. | |
| 5. |
The concepts of inside money and outside money is given by |
| A. | milton friedman |
| B. | j m keynes |
| C. | gurley and shaw |
| D. | none of these |
| Answer» C. gurley and shaw | |
| 6. |
Assertion (A): Long-run Philips curve is a vertical line at the NAIRU Reason (R): Non-accelerating inflation raise of unemployment, more or less, stands accepted |
| A. | both (a) and (r) are false. |
| B. | both (a) and (r) are true, but (r) is not the correct reason. |
| C. | both (a) and (r) are true, and (r) is the explanation. |
| D. | (a) is true, (r) is false. |
| Answer» C. both (a) and (r) are true, and (r) is the explanation. | |
| 7. |
The quantity theory of money first propounded in 1588 by an Italian Economist |
| A. | david hume |
| B. | davanzatti |
| C. | j s mill |
| D. | ricardo |
| Answer» B. davanzatti | |
| 8. |
What is the shape of Long Run Phillips curve is |
| A. | inverted u shape |
| B. | horizontal |
| C. | inverse l shape |
| D. | vertical |
| Answer» D. vertical | |
| 9. |
Which among the followings is not the feature of monetarism? |
| A. | fiscal policy causes no long-term increase in real output |
| B. | only a trade-off in the short-term |
| C. | tend to emphasis supply-side unemployment (natural rate) |
| D. | demand- deficient unemployment big causes |
| Answer» D. demand- deficient unemployment big causes | |
| 10. |
According to Keynes Investment is a function of |
| A. | dumping |
| B. | income |
| C. | saving |
| D. | interest |
| Answer» D. interest | |
| 11. |
“Interest is poorly a monetary phenomenon “is a very famous statement made by |
| A. | j m keynes |
| B. | hamilton |
| C. | friedman |
| D. | j b say |
| Answer» A. j m keynes | |
| 12. |
Which one the following economists is the chief advocate of supply side economics |
| A. | arther laffer |
| B. | robert lucas |
| C. | neil wallace |
| D. | both a and c |
| Answer» A. arther laffer | |
| 13. |
Advocates of New classical Economics are |
| A. | robert lucas |
| B. | neil wallace |
| C. | thomas surgent |
| D. | all of the above |
| Answer» D. all of the above | |
| 14. |
The Laffer curve is associated with |
| A. | new classical economics |
| B. | supply side economics |
| C. | keynesian economics |
| D. | new keynesian economics |
| Answer» B. supply side economics | |
| 15. |
The doctrine of Policy ineffectiveness postulate is associated with |
| A. | new classical economics |
| B. | supply side economics |
| C. | new keynesian economics |
| D. | monetarism |
| Answer» A. new classical economics | |
| 16. |
The concept of Rational expectation is associated with |
| A. | natural rate of unemployment hypothesis |
| B. | new classical hypothesis |
| C. | both a and b |
| D. | none of these |
| Answer» B. new classical hypothesis | |
| 17. |
The idea of Adaptive expectation is associated with |
| A. | natural unemployment rate hypothesis |
| B. | new classical economics |
| C. | both a and b |
| D. | none of these |
| Answer» A. natural unemployment rate hypothesis | |
| 18. |
The idea of rational expectation first given by |
| A. | john muth |
| B. | robert lucas |
| C. | neil wallace |
| D. | thomas surgent |
| Answer» A. john muth | |
| 19. |
Laffer curve links |
| A. | inflation and unemployment |
| B. | tax revenue and tax rate |
| C. | output and unemployment |
| D. | inflation and interest rate |
| Answer» B. tax revenue and tax rate | |
| 20. |
New classical Economics is consistent with |
| A. | policy ineffectiveness postulate |
| B. | policy effectiveness postulate |
| C. | both a and b |
| D. | none of these |
| Answer» A. policy ineffectiveness postulate | |
| 21. |
New Classical Economics is based on |
| A. | rational expectation |
| B. | adaptive expectation |
| C. | backward looking expectation |
| D. | all the above |
| Answer» A. rational expectation | |
| 22. |
Supply side Economics was emerged against the background of |
| A. | 1930’s great depression |
| B. | 2008 global financial crisis |
| C. | 1970’s stagflation |
| D. | none of these |
| Answer» C. 1970’s stagflation | |
| 23. |
The dual decision hypothesis was given by |
| A. | clower |
| B. | crowther |
| C. | robert lucas |
| D. | wallras |
| Answer» A. clower | |
| 24. |
The book Elements of Pure Economics was authored by |
| A. | walras |
| B. | clower |
| C. | robert lucas |
| D. | kaldor |
| Answer» A. walras | |
| 25. |
The Neo Keynesian quantity constrained model is associated with the work of |
| A. | robert j barro |
| B. | robert m clower |
| C. | leonwalrs |
| D. | none of these |
| Answer» B. robert m clower | |
| 26. |
The efficiency wage model is associated with |
| A. | new keynesian economics |
| B. | new classical economics |
| C. | supply side economics |
| D. | keynesian economics |
| Answer» A. new keynesian economics | |
| 27. |
The insider outsider model is associated with |
| A. | new keynesian economics |
| B. | new classical economics |
| C. | supply side economics |
| D. | none of these |
| Answer» A. new keynesian economics | |
| 28. |
The Menu cost model is associated with |
| A. | new classical economics |
| B. | new keynesian economics |
| C. | supply side economics |
| D. | none of these |
| Answer» B. new keynesian economics | |
| 29. |
The New Classical economics was developed against the back ground of |
| A. | 1930‘s depression |
| B. | 1970’ stagflation |
| C. | 2008 subprime crisis |
| D. | none of these |
| Answer» B. 1970’ stagflation | |
| 30. |
Reagonomics is related to |
| A. | supply side economics’ |
| B. | new classical economics |
| C. | new keynesian economics |
| D. | natural unemployment hypothesis |
| Answer» A. supply side economics’ | |
| 31. |
Ratex hypothesis is related to |
| A. | new classical economics |
| B. | supply side economics |
| C. | new keynesian economics |
| D. | none of these |
| Answer» A. new classical economics | |
| 32. |
Inflation can be contained by |
| A. | surplus budget |
| B. | increase in taxation |
| C. | reduction in public expenditure |
| D. | all these three measures |
| Answer» D. all these three measures | |
| 33. |
Gregory Mankiw belongs to |
| A. | new keynesian economics |
| B. | new classical economics |
| C. | supply side economics |
| D. | none of these |
| Answer» A. new keynesian economics | |
| 34. |
According to Hawtrey, the business cycle is caused by |
| A. | variation in the interest of banking system |
| B. | variation in the price level of the economy |
| C. | variation in the money supply by bank |
| D. | all the above |
| Answer» D. all the above | |
| 35. |
Which of the following are main postulates of Supply side Economics |
| A. | cut in tax rate |
| B. | increasing public expenditure |
| C. | both a and b |
| D. | none of these |
| Answer» A. cut in tax rate | |
| 36. |
Which of the following economist is not related to New Classical Economics |
| A. | artherlaffer |
| B. | thomas surgent |
| C. | robert lucas |
| D. | neil walace |
| Answer» A. artherlaffer | |
| 37. |
According to New Classical Economist, Business cycle is due to |
| A. | anticipated policy change |
| B. | unanticipated policy change |
| C. | both a and b |
| D. | none of these |
| Answer» B. unanticipated policy change | |
| 38. |
The shape of Laffer curve is |
| A. | inverted u shape |
| B. | u shape |
| C. | inverse l shape |
| D. | none of these |
| Answer» A. inverted u shape | |
| 39. |
The curve which explains relationship between tax rate and tax revenue is called |
| A. | laffer curve |
| B. | kuznets curve |
| C. | lorenz curve |
| D. | none of these |
| Answer» A. laffer curve | |
| 40. |
According to New classical Economics |
| A. | anticipated policy change will not affect output |
| B. | unanticipated policy change will affect output |
| C. | both a and b |
| D. | none of these |
| Answer» C. both a and b | |
| 41. |
According to New Classical Economics Philips curve is |
| A. | always vertical |
| B. | always horizontal |
| C. | always downward slopping |
| D. | downward slopping in short run and vertical in the long run |
| Answer» A. always vertical | |
| 42. |
Liquidity trap is a situation when, |
| A. | all potential investors expect the rate of interest to rise in future |
| B. | all potential investors expect the rate of interest to fall in future |
| C. | natural rate of interest is above the critical rate of interest |
| D. | demand for money for speculative purpose is interest inelastic |
| Answer» A. all potential investors expect the rate of interest to rise in future | |
| 43. |
The classical economists focussed on the role of money as |
| A. | medium of exchange |
| B. | medium of distribution |
| C. | wealth |
| D. | link between present and future |
| Answer» A. medium of exchange | |
| 44. |
According to Milton Friedman Theory of permanent component of consumption-expenditure depends on i. Transitory income alone ii. Transitory and permanent income iii. Permanent income alone iv. Windfall gains Codes : |
| A. | i and ii are correct |
| B. | i and iii are correct |
| C. | ii and iv are correct |
| D. | only iii is correct |
| Answer» D. only iii is correct | |
| 45. |
The classical model of economic development emphasises |
| A. | laissez-faire policy |
| B. | capital accumulation |
| C. | both (a) and (b) |
| D. | none of these |
| Answer» C. both (a) and (b) | |
| 46. |
Assertion (A): According to Keynes, individuals hold either cash or all bonds. Reasoning (R): Because, according to him, the speculative demand for money is associated with uncertainty. Codes: |
| A. | both (a) and (r) are correct and (r) is the correct explanation of (a). |
| B. | both (a) and (r) are correct, but (r) is not the correct explanation of (a). |
| C. | (a) is correct, but (r) is incorrect. |
| D. | both (a) and (r) are incorrect. |
| Answer» C. (a) is correct, but (r) is incorrect. | |
| 47. |
Speculative demand for money is zero when market rate of interest is |
| A. | more than the ‘critical rate’. |
| B. | more than the market rate of interest but less than the critical rate (i.e. capital gains occur). |
| C. | less than the market rate of interest. |
| D. | lowest (i.e. in liquidity trap). |
| Answer» A. more than the ‘critical rate’. | |
| 48. |
Assertion (A) : There exits inverse relationship between interest rates and bond prices. Reason (R) : A bond price represents the present discounted value of the payments agreed upon at the time when the bond was issued. Codes : |
| A. | both (a) and (r) are correct, and (r) is the correct explanation of (a). |
| B. | (a) is correct, but (r) is not the correct explanation of (a). |
| C. | (a) is correct, but (r) is incorrect. |
| D. | (a) is incorrect, but (r) is correct. |
| Answer» A. both (a) and (r) are correct, and (r) is the correct explanation of (a). | |
| 49. |
According to Says law of market what is the main cause of overproduction? |
| A. | unemployment |
| B. | fall in demand |
| C. | rise in price |
| D. | fall in wage rate |
| Answer» A. unemployment | |
| 50. |
In Classical system how to correct an overproduction or glut in the market? |
| A. | by increasing price o f input |
| B. | by wage cut policy |
| C. | by price cut policy |
| D. | by decreasing production |
| Answer» B. by wage cut policy | |
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