861. The marginal propensity to withdraw is ?
A. 1/investment multiplier
B. 1-(1/injections multiplier
C. MPS + MPT + MPM
D. the proportion of national income that is withdraw from the circular flow of income

862. The ratio of change in the equilibrium level of output to a change in some autonomous variable is the ?
A. automatic stabiliser
B. multiplier
C. elasticity coefficient
D. marginal propensity of the autonomous variable

863. Assuming there is no government or foreign sector, if the multiplier is 2.5 the MPC is ?
A. 4
B. 25
C. 6
D. 2.5

864. Assume there is no government or foreign setor, If the MPC is 75 a Rs20 million decrease in planned investment will cause aggregate output to decrease by ?
A. Rs80 million
B. Rs20 million
C. Rs 15 million
D. Rs26.67 million

865. If The Central bank tries to keep the interest rate constant when the economy is operating on the steep part of the AS curve, _________ will occur?
A. a hyperinflation
B. a depression
C. stagflation
D. a recession

866. The idea the government spending causes a reduction in private investment is called ?
A. fiscal drag
B. investment blight
C. crowding-out
D. the Thatcher effects

867. The way in which government spending is supposed to reduce investment is by increasing ?
A. incomes
B. overseas investment
C. imports
D. interest rates

868. Each point on the IS curve represents the equilibrium point in the ?
A. goods market for the given interest rate
B. goods market for the given level of government spending
C. money market for the given level of the money supply
D. money market for the given value of aggregate output

869. The curve that illustrates the positive relationship between the equilibrium values of aggregate output and the interest rate in the money market is the ?
A. money supply curve
B. LM curve
C. money demand curve
D. IS curve

870. Each point on the LM curve represents the equilibrium point in the ?
A. money market for the given level of the money supply
B. money market for different combinations of interest rates and output
C. goods market for the given level of government spending
D. goods market for the given interest rate

 

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