1Why low rate inflation is considered necessary for economic grwoth? Oa It does not affect the purchasing power of wages Ob. It indicates that the currency is in continuous demand by the people Oc taffects only the rich and not the poor Od itact as an incentive to boost in supply in the economy

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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1Why low rate inflation is considered necessary for economic grwoth? Oa It does not affect the purchasing power of wages Ob. It indicates that the currency is in continuous demand by the people Oc taffects only the rich and not the poor Od itact as an incentive to boost in supply in the economy

2When the economy is in Keynesian macroeconomic equilibrium, planned investment is greater than actual investment. O a False O b. True

3Government fixes the floor and ceiling price which will not allow the producers to increase the price on their wish, this is a type of. O a Physical control called price pegging O b. Monetary policy control measures O. Physical control called price tagging Od. Fiscal policy control measures O e None

4Rising output coupled with falling prices is called stagflation O a. False O b. True

5The Value of marginal propensity to consume lies O a. O to 1 O b. Less than zero Oc -1 to 1 Od. Between O to 1

6The Central Bank way to control inflation is Oa Monetary policy through adjusting interest rates in economy. Ob. Fiscal policy through open market operation Oc None Od. Direct and Physical control De Fiscal policy through government expenditure

7Which one of the following is not a reason for a downward sloping aggregate demand curve? Oa Full employment effect Ob Wealth effect O. Net exports rate effect Od Interest rate effect auON O

8 value of marginal propensity to save always greater than one      true or false

9An increase in prices will cause an increase in the amount supplied. Oa True Ob. False uonsanb

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