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Q.1)What annual instalment will discharge a debt of Rs. 1092 due in 3 years at 12%
simple interest?
a) Rs.300
b) Rs.225
c) Rs.400
d) Rs.325
Q.2)Of the production functions, which one of the following represents decreasing
returns to scale?
a) Q = 2K + 3L +KL
b) Q = 20K 0.6 L 0.5
c) Q = 100 + 3K +2L
d) Both a) and c) above
Q.3)LM Function Y = 500+200 i
Investment function (I) 100 – 10 i
Transaction demand for Money (Mt) 0.50 Y
Speculative Demand for Money (Ma) 350 – 100 i
Supply of money (Ms) 500 Rs.
Current equilibrium rate of interest (i) 10 %
Q1-If expansionary fiscal policies increase the equilibrium rate of interest to 12 % , the
crowding out in the economy is :
a) 10 Rs.
b) 15 Rs.
c) 20 Rs.
d) 25 Rs.
Q2- If the government would like to avoid the crowding out as in above question, what
should be new money supply in the economy?
a) 100 Rs.
b) 600 Rs.
c) 650 Rs.
d) 700 Rs.
Q.4)If 44+14= 15 & 107+15 = 46, what is 28 + 6?
a) 22 b) 13 c) 11 d) 17
Q.5)In a town 25% families own a phone and 15% own a car, 65% families own neither a phone
nor a car. 2000 families own both a car and a phone. Consider the following statement in
this regard:
1) 10 % families own both a car and a phone.
2) 35 % families own neither a car nor a phone.
3) 40,000 families live in the town.
Which of the above statements are correct?
a) 1 and 2 b) 2 and 3 c ) 1 and 3 d ) 1, 2 and 3
Q.6)The average rate of inflation in USA and Japan between the years 1960-73 is 3.2% and 6.1%
respectively, then the growth rate of
a) No definite conclusion can be made c) Japan will be more
b) USA will be more d) Japan will be less
Q.7)Which of the following would likely have the least direct influence on a country’s current
account?
a) inflation c) exchange rates
b) national income d) a tax on income earned from foreign stock
Q.8)You have two plants. Plant A has costs c(y) = y2 and Plant B has costs c(y) = 2y2. What is the
joint cost curve?
a) y2 c) 5y2/9
b) 2y2 d) 3y2
Q.9)Under the Cash Balance Approach, Cambridge economists stated that when demand for
money increases, people will -------------expenditure on goods and services, which will in turn
bring ------------ the general price level and ---------- value of money.
a) Reduce, down, raise c) Reduce, down, decline
b) Increase, up, decline d) Reduce, up, raise
Q.10)On which of the following interval(s) must the function f (x) = 2+x2 −x3 have a root?
a) [1, 2] c) [−1, 0]
b) [2, 3] d) [0, 1]
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