Managerial Economics MCQs and Notes

P

Praveen Singh • 36.81K Points
Coach

Q 31. According to the concept of rational expectations

(A) Budget deficits are irrelevant to output in the short-run

(B) Higher deficits should increase output in the short run if they are expected

(C) Lower deficits can be used to stabilize output during expansions

(D) None of these

P

Priyanka Tomar • 35.28K Points
Coach

Q 32. Automatic stabilizers drive changes in

(A) The total deficit

(B) The cyclical deficit

(C) The structural deficit

(D) Monetary policy

R

Ranjeet • 34.60K Points
Instructor I

Q 33. The cyclical deficit is that portion of the deficit

(A) That results form the economy being below the natural rate of output

(B) That would exist even if the economy were at its natural rate of output

(C) Is a function of the level of automatic stabilizers

(D) Both a & c

R

Ranjeet • 34.60K Points
Instructor I

Q 34. In the IS-LM model, an easy monetary in conjunction with a tight fiscal policy

(A) Increases exports and decreases imports

(B) Decreases exports and increases imports

(C) Encourages foreign capital inflows to the U.S.

(D) Both b and c

R

Ram Sharma • 193.86K Points
Coach

Q 35. The structural deficit is the deficit that

(A) Is composed by of non discretionary spending by the federal government

(B) Results from the economy being below is natural rate of output

(C) Exists when output is at its natural rate of output

(D) Results from temporary tax cuts

R

Ranjeet • 34.60K Points
Instructor I

Q 36. From the net tax function: T=t0+t1Y,where t0<0 and t1>0, it follows that, as income rises

(A) average taxes falls and the surplus declines

(B) average taxes rises and the deficit increases

(C) average taxes falls and the deficit declines

(D) average taxes and the deficit do not change

V

Vikash Gupta • 33.56K Points
Instructor I

Q 37. Assuming a simultaneous deduction in income taxes and transfer payments of $50 billion, then aggregate disposable income will

(A) be higher than before

(B) be lower than before

(C) remain constant

(D) none of the above

V

Vikash Gupta • 33.56K Points
Instructor I

Q 38. Which of the following statements are(is) correct?

(A) Expansionary monetary policy and expansionary fiscal that leads to budget deficits create low interest rates

(B) High interest rates in the first half of the 1980s resulted from falls in the budget deficit under the Reagan administration

(C) The best monetary-fiscal policy mix to keep interest rates low would be to raise taxes and raise the money supply

(D) The answer depends upon the school of thought used to evaluate the effects of deficit policies

V

Vikash Gupta • 33.56K Points
Instructor I

Q 39. Advocates of the public-choice view argue that elected officials

(A) Will always respond to inflation with expansionary policies but will respond to unemployment with restrictive policies

(B) Will actively respond to inflation with restrictive policies but are reluctant to respond to unemployment with expansionary policies

(C) Will always respond to both inflation and unemployment with expansionary policies

(D) None of the above

R

Rakesh Kumar • 28.44K Points
Instructor II

Q 40. During the recession of 2001,

(A) There were a number of proposals for tax increases or spending cuts to stir the economy, but the failed due to worries about their effects on the already largedeficit

(B) A series of tax cuts were passed, though the only occurred in late 2001

(C) All the proposed tax and spending cuts were approved in order to motivate the economy and reduce the large deficit

(D) The cyclical deficit increased but the structural deficit remained unchanged