221. In the IS-LM model, an easy monetary in conjunction with a tight fiscal policy
Increases exports and decreases imports
Decreases exports and increases imports
Encourages foreign capital inflows to the U.S.
Both b and c
Correct answer: (D) Both b and c
222. Physiocrats give utmost importance to
Services
Industry
Agriculture
None of these
Correct answer: (C) Agriculture
223. Which one is not an exception to the Law of Demand?
Normal good
Articles of Distinction
Ignorance
Inferior good
Correct answer: (A) Normal good
224. A fall in the price of a commodity whose demand curve is a rectangular hyperbola causes total expenditure on the commodity to:
Increases
Decrease
Remains unchanged
Any of the above
Correct answer: (C) Remains unchanged
225. The relationship between demand for a commodity and price, ceteris paribus, is:
Negative
Positive
Non-negative
Non-positive
Correct answer: (A) Negative
226. A consumers demand curve can be obtained from:
ICC
Engel curve
Lorence curve
PCC
Correct answer: (D) PCC
227. Unitary elasticity of demand is:
Zero
Equal to one
Greater than 1
Less than 1
Correct answer: (B) Equal to one
228. A usual assumption in real business cycle models is that the economy is populated by a group of identical individuals and the behavior of the group can then be explained in terms of the behavior of one individual, called a _____________________
Maximizing agent
Representative agent
Republican agent
Informative agent
Democratic agent
Correct answer: (B) Representative agent
229. Which of the following statements are correct? According to real business cycle theory,
The desirable monetary policy would appear to be one that results in a slow steady growth in the money supply and, thus stable prices.
There is some role for activist monetary stabilization policy of a Keynesian type
Changes in aggregate demand cannot impact output
Both a and b
Both a and c
Correct answer: (E) Both a and c
230. New Keynesian would agree with all of the following except
Stabilization policy can reduce the severity of business cycles
Wages and prices are sticky
Markets are perfectly competitive
Market equilibrium is often suboptimal
Correct answer: (C) Markets are perfectly competitive