UGC NET Macroeconomics MCQ Test series 1 for upsc and other competions exams www.iemsnet.com

UGC NET Macroeconomics MCQ Test series 1 for upsc and other

Ugc Net Macroeconomics MCQ


Below are the Mcq for macro economics Test series 1.Kindly comment your answer in comment box.We will send answers to your email id.
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MACRO ECONOMICS MCQs www.iemsnet.com

1. Excess demand for money, according to Say’s law in the Economy:

(A) Is greater

(B) Is very less

(C) Is equal to zero

(D) There is no relationship between excess demand for money and Say’s Law

2. Which of the following is not an assumption of classical theory?

(A) Price flexibility
(B) Unemployment
(C) Say’s law
(D) Neutrality of money

3. In classical theory the equality between saving and investment is brought about by:

(A) Rate of interest
(B) Income
(C) Consumption
(D) Multiplier

4. The normal condition of a capitalist economy in classical theory is:

(A) Underemployment
(B) Full employment
(C) General unemployment
(D) Frictional unemployment

5. Equation of exchange is associated with:

(A) Pigou
(B) J.B.Say
(C) Marshall
(D) Irving Fisher

6. The theory explaining the direct relationship between the price level and quantity of money is known as :
(A) Quantity theory of money
(B) Say’s law of markets
(C) Real theory of interest
(D) None of these

7. In classical theory the level of employment is a function of:

(A) Price level
(B) Money wage rate
(C) Quantity of money
(D) Real wage rate

8. Equation of exchange is converted into the quantity theory of money by assuming the

following variables as constants:

(A) V and T
(B) M and V
(C) M and P
(D) V and P

9. Which of the following is not an obstacle to full employment in classical theory?

(A) Excess of saving over investment

(B) Liquidity trap

(C) Price rigidity

(D) Wage Flexibility

10. Fisher’s Equation of quantity theory states that :

(A) P varies directly with income
(B) P varies directly with M
(C) P and M are constants
(D) None of the above

11. The classical economists believed that the demand for labour is a function of:

(A) Total money wages
(B) Money wage rate
(C) Total real wages
(D) Real wage rate

12. In classical theory of employment, there is the possibility of:

(A) Voluntary unemployment
(B) No unemployment
(C) Involuntary unemployment
(D) Disguised unemployment

13. The idea that a general cut in wages will finally lead to a state of full employment was suggested by :

(A) Keynes
(B) Marshall
(C) J.B.Say
(D) A.C.Pigou

14. Say’s law of market says:

(A) Supply creates its own demand

(B) Demand creates supply

(C) Income generates demand

(D) Savings create demand

15. The aggregate production function implied under classical theory is :

(A) Long run
(B) Short run
(C) No time element
(D) None of the above

16. In the Cambridge equation of M = kPR, the value of k is:

(A) M/V
(B) 1/V
(C) V in Fisher’s equation
(D) None of these

17. As a result of an increase in capital, ceteris paribus, ------ the marginal productivity of labour:
(A) Remains constant
(B) Increase
(C) decreases
(D) none of these

18. In the classical theory, one of the following is an important assumption:

(A) Wages and prices are inflexible
(B) There is full employment
(C) Agents are price setters
(D) Adjustment is through quantity.

19. In the Fisher’s extended equation of exchange MI VI represents:

(A) Credit money
(B) Primary money
C) Both primary and credit money
(D) General price level

20. In Fisher’s transaction velocity model, one of the following is not an assumption:

(A) Velocity of circulation of money is constant

(B) The volume of transactions is constant

(C) Full employment

(D) P is considered as an active factor

21. The cash balance equation M = KPO was given by:

(A) Keynes
(B) Pigou
(C) Robertson
(D) Marshall

22. “Supply creates its own demand “is a law of:

(A) Investment
(B) Inflation
(C) Consumption
(D) Market

23. In the equation MV+ MI VI = PT, ‘M ‘denotes:

(A) Velocity of money
(B) Money in circulation
(C) Bank deposit
(D) None of these

24. I classical demand for money, the relationship between money supply and price level is:

(A) Proportional

(B) Non-proportional

(C) Neither proportional nor non-proportional

(D) None of these

UGC NET Macroeconomics MCQ Test series 1 for upsc and other

25. As per classical theory saving is:

(A) An increasing function of rate of interest

(B) Decreasing function of rate of interest

(C) Decreasing function of level of income

(D) None of these

26. The Cambridge version of the quantity theory of money was developed by:

(A) Fisher
(B) Alfred Marshall
(C) Pigou
(D) Keynes

27. In classical system which of the following keeps the economy at full employment:

(A) Level of saving
(B) Increase in money supply
(C) Adjustment in investment
(D) Adjustment in money wages

28. In Fisher’s equation of exchange MV=PT, the variation of which produces a
proportional change in price:
(A) M
(B) V
(C) P
(D) T

29. According to classical economists, variations in savings are due to:

(A) Level of investment
(B) Rate of interest
(C) Level of employment
(D) None of the above

30. In classical theory which of the following is found in the economy:

(A) Unemployment
(B) Involuntary unemployment
(C) Less than full employment
(D) Full employment

31. In MV=PT, if M doubles and V and T remain constant, then P will:

(A) Double
(B) 1/2
(C) 1
(D) 4

32. Pigou’s version of Cambridge equation is:

(A) M = KP/Y
(B) P= KR/M
(C) MV = PT
(D) MV = MI VI

33. The quantity theory of money was restated by:

(A) Alfred Marshall
(B) Milton Friedman
(C) Irving Fisher
(D) J.M. .Keynes

34. The law which states that supply creates its own demand and overproduction is impossible is known as:

(A) The law of supply
(B) Say’s law of market
(C) Law of demand
(D) Law of macro economics

35. Wages and prices do not adjust quickly to restore general equilibrium is a property of

(A) Classical economics
(B) Keynesian economics
(C) Monetary economics
(D) Supply side economics

36. Classicals treated money as a:

(A) Medium of exchange
(B) Store of value
(C) Both
(D) None

37. When there is an increase in the autonomous money supply, ceteris paribus, LM shifts:

(A) Leftward
(B) Rightward
(C) No shift
(D) None

38. An Economic model is a statement of relationship among economic ------

(A) Variables
(B) Phenomena
(C) Development
(D) None of these

39. LM curve shows the equilibrium condition in ---------- market

(A) Goods market
(B) Product market
(C) Money market
(D) None of these

40. Supply creates its own demand is the Basis of:

(A) Classical economics
(B) Keynesian economics
(C) Monetarism
(D) None of these

41. The simplest ISLM model consists of:

(A) Two markets
(B) Three markets
(C) Four markets
(D) Five markets

42. The equilibrium in the product market is represented by which curve?

(A) IS
(B) LM
(C) Demand
(D) Supply curve

43. The IS curve has a ------slope

(A) Positive
(B) Negative
(C) Zero
(D) None of these

44. The LM curve has a ----- slope

(A) Positive
(B) Negative
(C) Zero
(D) None of these

45. ISLM model was developed by:

(A) Hicks
(B) Keynes
(C) Friedman
(D) None of these

46. The perfectly elastic segment of the LM curve is:

(A) Keynesian range
(B) Classical range
(C) Intermediate range
(D) None of these

47. Which policy is effective in the Classical range?

(A) Monetary policy
(B) Fiscal policy
(C) Incomes policy
(D) None of these

48. Which policy is effective in the Keynesian range?

(A) Monetary policy
(B) Fiscal policy
(C) Incomes policy
(D) None of these

49. Which policy is effective in the intermediate range?

(A) Monetary policy
(B) Fiscal policy
(C) Both policies
(D) None of these

50. IS-LM model was developed by:

(A) Keynes
(B) Walras
(C) J.R.Hicks
(D) Don-Patinkin