Advanced Macroeconomics I Quiz 2015-17

The goods market equilibrium is analogous to

Investment=Saving

Consumption=Investment

Saving=Consumption

Export=Import

A rise in mark up and fall in unemployment will

Lower price setting condition and raise wage setting condition

Lower both price and wage setting conditions

Raise price setting condition and lower wage setting condition

Raise both price and wage setting conditions

Natural rate of unemployment ensures

No unemployment

Clearing of labour market

Maximum unemployment

Actual unemployment

If CRR is raised and Repo rate is lowered then

Money in circulation increases

Money in circulation falls

Money in circulation remains unchanged

Ambiguous

If money supply becomes more responsive to rate of interest, then

Crowding out effect falls

Crowding out effect rises

Crowding out effect remains unchanged

The backward bending portion of labour supply depicts

Substitution effect = Income effect

Substitution effect > Income effect

Substitution effect < Income effect

Saving is a leakage

Always true

Always false

May or may not be

Interest responsiveness of money demand affects

Only slope of money demand

Only intercept of money demand

Neither intercept nor slope of money demand

Both intercept and slope of money demand

An expansionary fiscal policy coupled with expansionary monetary policy will give

Higher income with lower rate of interest

Lower income with higher rate of interest

Higher income with ambiguity in rate of interest

Lower rate of interest with ambiguity in income

Classical AS curve is

Negatively sloped

Positively sloped

Zero sloped

Infinite sloped