If government expenditure (∆G) is increased by AED 400, and tax (∆T) has also increased by AED 400, Marginal propensity to save is given as 0.25, what would the increase in National Income (∆Y)? 200 300 400 500
1- If government expenditure (∆G) is increased by AED 400, and tax (∆T) has also increased by AED 400, Marginal propensity to save is given as 0.25, what would the increase in National Income (∆Y)?
200
300
400
500
2-
For an economy, the central bank has increased the money supply, what would happen to LM curve?
It will shift to right
It will shift to left
It will not shift
None of the options are correct
3-
Which of the following sequence of events follows an contractionary fiscal policy?
Increase in government expenditure and tax
Decrease in tax and government spending
Decrease in government expenditure and increase in ta
Increase in government spending and decrease in Tax
4-
Suppose for an economy following information is given. Consumption (C) = 40+0.75(Yd), Tax (T) = 80 Million AED ; I= 140-10r; Government spending (G) =100; Money demand = 0.2Y -5r ; Money supply = 85 million AED.
a. Compute the equilibrium Income Y and rate of Interest (r) ?
b. Suppose government increases its spending on health by 65 millions, what would be the impact on National Income?
5-
For an contractionary
rate of interest and National Income will increase
rate of interest and National Income will decrease
rate of interest will increase and National Income will decrease
rate of interest will decrease and National Income will increase
6-
If goods and
It will automatically bring the equilibrium by the forces of rate of interest and national income
It will never be in equilibrium by the forces of rate of interest and national income
Who cares about equilibrium?
It will remain in disequilibrium forever.
7-
Seigniorage is a term used to explain
Revenue raised by the government by printing money
Is tax collected by the government
This term is used to represent rich people in an economy
It is about age of the economy
8-
For an economy, the marginal propensity to consume ( MPC) is 0.75. In this economy, Investment is increased by 2000 million AED. Find the increase in the national income due to this?
National income will increase by 4000 Million AED
National income will increase by 5000 Million AED
National income will increase by 6000 Million AED
National income will increase by 8000 Million AED
9-
In quantity theory of money equation (MV = PY), What is the relationship between Money Supply and Price Level?
Both are not related
Both are indirectly proportional
Both are directly proportional
Money supply is related to output not price.
10 -
Accelerator theory of Investment shows investment is determined by
Change in output
Change in Inflation
Rate of interest
Change in
11-
OKUN law shows a relation between
Reduction in inflation and increase in National Income
Reduction in growth unemployment and increase in National Income
Reduction in unemployment and increase in National Income
Reduction in employment and increase in National Income
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