1. Total expenditures on final product are (a) C I G IM. (b) C S T EX. (c) C I S EX. (d) C I G EX IM. 2.

G EX IM. 2. The multiplier is defined as the ratio of a change in income to the (a) marginal propensity to save. (b) marginal propensity to consume. (c) change in the marginal propensity to consume causing it. (d) change in the marginal propensity to save causing it. (e) change in planned autonomous spending causing it.

3. Answer on the basis of the relationships shown in the above four figures. The amount of Y is directly related to the amount of X in: A) 3 only. B) both 2 and 4. C) 2 only. D) 1 only. 4. Opportunity cost is best defined as: A) the opportunity to pay the lowest price for any productive resource. B) the amount of labor that must be used to produce one unit of any product. C) the opportunity to pay the lowest price for any consumer product. D) the amount of one product that must be given up to produce one more unit of another product. 5. If the demand curve for product B shifts to the right as the price of product A increases, then: A) A and B are substitute goods. B) A is a normal good and B is an inferior good. C) A is an inferior good and B is a normal good. D) A and B are complementary goods. 6. An increase in consumer incomes (like when one wins the lotto) will: A) increase the demand for an inferior good. B) increase the supply of an inferior good. C) increase the demand for a normal good. D) decrease the supply of a normal good. 7. A decrease in quantity demanded is depicted by a: A) move from point x to point y. B) a shift from D1 to D2. C) shift from D2 to D1. D) move from point y to point x. E) none of the above 8. The law of supply: A) reflects the amounts that producers will want to offer at each price in a series of prices. B) is reflected in a downsloping supply curve. C) was enacted by Congress to force businesses to produce goods that society wants. D) reflects the income and substitution effects of a price change

9. Refer to the above diagram. A surplus would be encountered: A) at any price below $1.00. B) at any price above $1.00. C) at a price of $1.60 only D) at a price of $.50 only E) None of the above 10. The determinants of demand include all, except: A) resource prices B) expectations C) number of buyers. D) income. 11. Macroeconomics focuses on the performance of: a. individual consumers. b. business firms. c. government agencies. d. the economy as a whole. 12. GDP is: a. the sum of the amounts of goods and services in the economy. b. a measure of the amount of capital in an economy. c. a measure of per capita economic growth of the economy. d. a monetary measure of final output produced during a given period of time. 13. GDP is: a. measured in physical units. b. a measure of the economic growth rate. c. the total market value of all final goods and services produced in a country in a year. d. a per capita measure. 14. GDP per capita is: a. the sum of consumer goods, investment goods, government services, and exports. b. a monetary measure of the economic growth rate of a country. c. the value of the factors of production used to produce a countrys output. d. GDP divided by the total population. The price elasticity of demand measures a. The change in quantity demanded of a good in response to a change in its price. b. The change in price of a good in response to a change in quantity demanded of its substitute. c. The change in quantity demanded of a good in response to a change in price of its substitute.

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d. The change in quantity demanded of a good in response to a change in consumer income. 16. Economizing behavior is best described as a. spending the least amount of money. b. Investing in stock market. c. Weighing benefits of each alternative against its costs and choosing the alternative that maximizes the net benefits. d. Choosing irrationally from among alternatives 17. What range of price elasticity of demand would you expect above the mid-point of a linear demand curve? a. unit elastic b. inelastic c. elastic d. zero elasticity

18. The three approaches to measuring economic activity are the (a) cost, income, and expenditure approaches. (b) product, income, and expenditure approaches. (c) consumer, business, and government approaches. (d) private, public, and international approaches. 19. Which of the following is included in U.S. GDP? (a) The sale of a new car from a manufacturers inventory (b) The purchase of a watch from a Swiss company (c) The sale of a used car (d) A newly constructed house 20. Intermediate goods are (a) capital goods, which are used up in the production of other goods but were produced in earlier periods. (b) final goods that remain in inventories. (c) goods that are used up in the production of other goods in the same period that they were produced. (d) either capital goods or inventories. 21. Sarah can consume either pizzas or hamburgers. The price of a hamburger is $1 and the price of a pizza is $5. Let MUn be the marginal utility of hamburgers and MUp be the marginal utility of pizzas. In consumer equilibrium, the ratio MUh /MUp must equal A) 0.2. B)5.0 C)1.0. D) infinity.
22. Jennifer consumes both apples and bread. Let Pa be the price of an apple and Pb, the price of a

loaf of bread. TUa is her total utility from apples and TUb her total utility from bread. MUa is her marginal utility from apples and MUb her marginal utility from bread. When Jennifer is in consumer equilibrium, A)MUa/TUa = MUb/TUb. B)MUa/Pb = MUb/Pa. C)TUa/Pb = TUb/Pb. D)MUa/Pa=MUb/Pb. 23. The subject matter of economics is concerned with A. Production C. Distribution and exchange B. Consumption D. All of the above

24. The economic problem arises since A. Wants are unlimited B. Resources are limited C. Resources are capable of alternative uses D. All of the above 25. The wants of the people are A. Limited C. Unlimited B. Satiable D. All of the above 26. Economic problem arises in A. Planned economies B. Free market economies C. Mixed economies D. All of the above 27. The resources are : A. Limited B. Unlimited C. Not only limited but are capable of alternative uses D. None of the above 28. Which one of the following is an example of an economic good A. Sunlight B. Air C. Petrol D. None of the above 29. ----- is not an example of free good A. Sunlight B. Car C. Petrol D. Computer 30. The term production refers to: A. Producing things which are capable of satisfying human wants B. Creation or addition of utilities C. Transformation of inputs into output D. All of the above

31.Commission received by broker on the sale of second hand goods will be included in GDP because___ A commission is being received in cash. B It is an income for the services of the current year. C Brokers services are very important. D Commission adds to price of goods
32. Increase in the demand for wages due to industrial development is an example of___ A) Income demand C) Cross demand B) Derived demand D) Competitive demand Product differentiation is special feature of which type of compettion? A) Perfect B) Pure C) Imperfect D) Monopolistic

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If MPC=0.9 then investment multiplier is ___ A) 1 B) 10 C) 0.1 D) 100

35. A) B) C) D) 36.

When firm under perfect competition attains equilibrium? When MR> MC When MR < MC When MR= MC When MC is decreasing Investment in mew machinery and equipment for brand new product for sale in market is called? A) Autonomus investment B) Induced investment C) Industrial investment D) Necessary Investment 37. In case of straight line demand curve meeting two axis price elasticity of demand curve at midpoint of line would be A) 0 B) 1 C) 1.5 D) 2 38. If quantity demanded of commodity X increase as household income increase What type of good X is A) Giffen B) complementary goods C) Normal D) substitute goods 39. If A and B are independent goods the opposite elasticity of demand would be A) Positive B) negative C) infinite D) zero 40. What is the currency of china? A) Dirham B) yen C) Yuan D) taka 41. Which of following deficit indicates the borrowings requirements of government? A) Primary deficit b) fiscal deficit C) Revenue deficit D) Budgetary deficit 42. Output increase from 5 units to 6 units as result total cost rises form Rs 39.2 to Rs 49 What is marginal cost? A) 9.8 B) 9.8 C) 88.2 D) 88.2

43. State full form of NABARD? 44. State the law of supply? 45.What is real national income and give its formula? 46. If MPC =0.5 what is MPS and investment multiplier? 47. If a bank receives primary deposits of Rs 5 lacs The bank keeps 10% cash reserves then what is credit creation? 48. Because of cyclone in coastal area the sea water covers the lot of rice fields. This reduce the productivity of land . How will it affect the supply curve of price of that region? 49. What is root of exchange? 50. The government budget shows primary deficit of Rs 8400 crores and revenue expenditure on interest payment is Rs 400 crores. How much is fiscal deficit?