WorksheetsNI & AD- AS
Total questions: 40
Worksheet time: 40mins
Which of the following equations represents Aggregate Demand
GDP = X + I + C + (Y - Z)
GDP = C + I + G + (X - M)
GDP = C + I + X + (G - T)
GDP = (1/MPS)*G + I + C
Which of the following events will increase the Aggregate Demand in the economy. Check all that apply.
The government increasing Income Tax
The Fed lowering interest rates
A rise in the cost of raw material
A supply shock like a new production technology
An increase in consumer confidence
Consumption in the economy depends on all these factors EXCEPT.
Corporate Taxes
Consumer Confidence
Income Tax
Interest Rates
If a country imports more than it exports, it is experiencing a _______________
Budget Surplus
Budget Deficit
Trade Surplus
Trade Deficit
Which of the following are examples of automatic stabilizers (check all that apply)
Progressive Income Tax
Unemployment Compensation
Balanced Budget Ammendment
Spending on a Military Conflict
Welfare Payments
If the government lowers taxes and increases spending, this is likely to lead to ___________ inflation
Public-pushed
Demand-pulled
Cost-pushed
Hyperinflation
A strong rise in energy cost is likely to lead to
A rise in real GDP and the price level
A fall in GDP and the price level
A fall in real GDP but a rise in the price level
A rise in real GDP but a fall in the price level
Which of these actions can the government take to slow down a demand-pulled inflation (check all that apply)?
Increase government spending
Print more money
Raise taxes
Issue stimulus checks
Raise interest rates
Which of the following will cause an increase in consumption?
an increase in interest rates
a decrease in taxes
an increase in stock prices
Both b. and c. above
An investment will be made:
if the interest rate exceeds the expected rate of return
if the expected rate of return exceeds the interest rate
if the expected rate of return equals the interest rate
All of the above
Net exports will increase if:
there is a decrease in foreign Real GDP
the exchange rate for the dollar depreciates
Both of the above
Neither of the above
An increase in short-run aggregate supply could be caused by:
an increase in wage rates
an increase in productivity
an adverse supply shock
All of the above
The short-run aggregate supply curve shifts in response to a change in:
consumption
government purchases
overall costs of production
All of the above
Increases in AD tend to cause:
the price level to increase
Real GDP to decrease
the unemployment rate to increase
All of the above
Decreases in SRAS tend to cause:
the price level to decrease
Real GDP to decrease
the unemployment rate to increase
Both b. and c. above
An increase in productivity will tend to cause:
the price level to decrease
Real GDP to increase
the unemployment rate to decrease
All of the above
Which of the following is not a flow
Capital
Income
Investment
Depreciation
The difference between value of output and value added is:
Depreciation
Net Indirect tax
Intermediate consumption
Net factor income from abroad
National income does not include_____
Wages and salaries
Rent and Royalty
Student scholarship
Corporate Tax
Product method of calculating national income is also known as:
Income method
Value added method
Expenditure method
Distribution method
Transfer payments refer to payments, which are made:
Without any exchange of goods and services
To workers on transfer from one job to another
As compensation to employees
None
National Income differs from Net National Product at market price by the amount of:
Current transfers from rest of the world
Net Indirect Taxes
National debt interest
it does not differ
GNP(MP) = GDP(MP) + ________ :
Depreciation
Indirect taxes
NFIA
Subsidy
Which of the following is not correct ?
NNPMP = GNPMP- depreciation
NNPMP = NNPFC + net indirect taxes
GDPMP = GNPMP +.NFIA
NDPFC = GDPFC – depreciation
In GNP calculation which of the following should be excluded?
Rental incomes
Interest payments
Dividends
Government transfer payment
In GNP calculation which of the following should be excluded?
Rental incomes
Interest payments
Dividends
Government transfer payment
Domestic income and national income becomes equal when
NFIA is +ve
NFIA is -ve
Factor income received from abroad equals to factor income paid ta abroad
Net indirect tax is zero
NNP at market price equals to NNP at factor cost, if
Net indirect tax is +ve
Net indirect tax is -ve
Indirect tax=Subsidy
None
To avoid Problem of double counting, which method is most suitable?
Income method
Expenditure method
Value added method
Final goods method
----------- causes leakage in circular flow of income.
Taxes
Savings
Exports
All above
In a circular flow of income, we have:
Production
Distribution
Disposition
All above
Which of the following is an intermediate good
Bread
Leather
Cloth
Shoes
National income does not include_____
Wages and salaries
Rent and Royalty
Student scholarship
Corporate Tax
The national income is
a. NNP at factor cost
b. NNP at market price
c. GNP at market price
d. GNP at factor cost
In case of excess demand, the RBI------ the bank rate or interest rate which makes the credit drear
increases
decreases
deposit
What is the other name name of fiscal policy
Quantitative
Qualitative
Fiscal
----- is equal to the difference between AD beyond full employment and AD at full employment
(a)
There is a ---- relationship between MPS and investment multiplier.
positive
inverse
direct
What is the value of MPC when MPS is zero?
1
0
0.5
Excess Demand leads to :
Increase in the level of employment
Decrease in the level of employment
No change in the level of employment
