301. The proportionality between the velocity of price movement and the inflationary gap is:
Indirect and irregular
Direct and linear
Irregular and direct
Indirect and non-linear
Correct answer: (B) Direct and linear
302. The fundamental cause for the collapse of the Bretton woods system was:
The liquidity problem
The adjustment problem
The confidence problem
None of the above
Correct answer: (C) The confidence problem
303. When automatic fiscal stabilizers are in place, a shock that causes a fall in the kevel of economic activity automatically
Results in a decline in the federal budget deficit that lessens the fall in income
Results in a rise in the federal deficit that lessens the fall in income
Requires the federal government to balance the budget
Will lead to a permanent increase in the budget deficit
Correct answer: (B) Results in a rise in the federal deficit that lessens the fall in income
304. According to the Keynesians,
An easy-fiscal tight-monetary policy reduces the trade deficit, such as what occurred during the 1980s
An easy-fiscal tight-monetary policy mix affects the composition of output by encouraging imports of foreign goods and discouraging U.S. exports, as was experienced during the 1980s
There was not a link between the rising government budgetary deficit and the rising trade deficit during the mid-1980s
Budget deficits and trade deficits should not be a source of concern
Correct answer: (B) An easy-fiscal tight-monetary policy mix affects the composition of output by encouraging imports of foreign goods and discouraging U.S. exports, as was experienced during the 1980s
305. Which of the following hypotheses about voter behaviour have been advanced in public-choice literature?
Voters are myopic
Unemployment is more likely to result in vote loss than is higher inflation
Deficit bias of the budget process
Both a and c
All of the above
Correct answer: (E) All of the above
306. The Historical school was based on
Deductive method
Inductive method
Both of above
None of these
Correct answer: (B) Inductive method
307. Demand for a commodity is elastic when it has:
Only one use
Uses which can not be postponed
Many uses
Uses very essential for the consumer
Correct answer: (C) Many uses
308. The utility may be defined as:
The desire for a commodity
The usefulness of a commodity
The necessity of a commodity
The power of a commodity to satisfy wants
Correct answer: (D) The necessity of a commodity
309. The elasticity of demand for a product will be higher:
The more available are substitutes for that product
The more its buyers demand loyalty
The more the product is considered a necessity by its buyers
All of the above
Correct answer: (A) The more available are substitutes for that product
310. If the percentage increase in quantity of a commodity demanded is its price, the coefficient of price elasticity of demand is: