Business Economics

251. The real business cycle theory

  1. Argues for active stabilization policy.
  2. Argues for interventionist policies in response to recessions
  3. Is in favor of a constant money growth rate rule for the money stock
  4. Is an offshoot of Monetarist theory
  5. None of the above
Correct answer: (E)
None of the above

252. Which of the following shocks have been emphasized most often with respect to real business cycle story?

  1. Shocks to technology
  2. Variations in environmental conditions
  3. Changes in the real(relative) prices of imported raw materials
  4. Changes in tax rates
  5. None of the above
Correct answer: (A)
Shocks to technology

253. In real business cycle models, business cycles are caused by _________________, while in new Keynesian model business cycles are caused by _________________

  1. Aggregate demand ; Aggregate demand
  2. Aggregate demand ; Aggregate supply
  3. Aggregate supply; Aggregate demand
  4. Fiscal policy ; monetary policy
Correct answer: (C)
Aggregate supply; Aggregate demand

254. Advocates of real business cycle theories argue that all of the following could cause a recession except

  1. A fall in consumer expectations
  2. Natural disasters
  3. Higher taxation
  4. Increase in the price of oil
Correct answer: (A)
A fall in consumer expectations

255. Many economists who accept the real business cycle explanations of economic fluctuations

  1. Believe that the Sharpe rise in the relative price of imported oil was the central cause of the deep recession in the United States in the mid-1970s
  2. Believe that the restrictive Federal reserve Monetary policy was the central cause of the deep recession in the United States in the mid-1970s
  3. Believe that the Sharpe rise in the relative price of imported oil was not the main cause of the deep recession in the United States in the mid-1970s
  4. Both a and c
  5. None of the above
Correct answer: (A)
Believe that the Sharpe rise in the relative price of imported oil was the central cause of the deep recession in the United States in the mid-1970s

256. The five year plan in India are launched after the approval of

  1. The President and Prime Minister
  2. The Rajya Sabha
  3. The National Development Council (NDC)
  4. The Lok Sabha
Correct answer: (C)
The National Development Council (NDC)

257. Dualism in development economics refers to

  1. Dual price policy
  2. Co-existence of technical and non-technical sectors
  3. Co-existence of modern and traditional sectors
  4. Co-existence of institutional and non- institutional agencies
Correct answer: (C)
Co-existence of modern and traditional sectors

258. Determination of price through interaction of demand and supply was introduced by:

  1. Keynes
  2. Marshall
  3. Pigou
  4. Walras
Correct answer: (D)
Walras

259. The imposition of an import tariff by a nation will increase the nation's welfare:

  1. Never
  2. Often
  3. Sometimes
  4. Always
Correct answer: (C)
Sometimes

260. Factor intensity as it is used in economics, is primarily s:

  1. Relative concept
  2. Absolute concept
  3. Abstract concept
  4. Empirical concept
Correct answer: (A)
Relative concept
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