VU World || Assignments, Quizzes, GDBs, Past Papers, Reports etc....

        
► Inferior good.         
► Complementary good.         
► Normal good.         
► None of the given options.    
        
► There will be a shortage.         
► There will be neither a shortage nor a surplus.         
► There will be a surplus.        
► There are forces that cause the price to change.  
        
► Budget constraint.        
► Expenditure set.         
► Isoquant.         
►Isocost.    
        
► Its entire marginal cost curve.         
► The upward-sloping portion of its marginal cost curve.         
►Its marginal cost curve above the minimum point of the average variable cost curve.         
►Its marginal cost curve above the minimum point of the average total cost curve.    
        
► Price = Marginal Cost.        
► Price = Average Total Cost.         
► Average Total Cost = Marginal Cost.        
► Price < Marginal Cost.    
            
► MPP_L/ P_i.         
► MPP_L.         
► P_i.         
►MPP_L x P_i.    
        
►Upward sloping due to the law of demand.         
►Upward sloping due to the law of marginal utility.         
►Downward sloping due to the law of diminishing returns.         
►Downward sloping due to the law of supply.    
       ► Price level and quantity are flexible.         
► Investment and saving are seldom equal.         
► Self-correction takes a long time.         
► Demand creates its own supply.         
►Prices and wages are flexible.    
        
► A stock variable.         
►A flow variable.         
► Both a stock and a flow variable.         
► Neither a stock nor a flow variable.    
        
► The number of people employed minus the number of people unemployed.         
►The number of people employed plus the number of people unemployed.        ► Just the number of people employed.         
► The whole population.    
       
► Raise direct taxation.         
► Introduce an import quota.         
► Raise interest rates.         
►Reduce the rate of value added tax on all goods and services.    
       
► Current account balance.        
► Capital account balance.         
► Statistical discrepancy.         
►Balanced Budget. 
        
            
► Indirect Taxes.         
►Direct Taxes.         
► Both direct and indirect taxes.         
► Subsidies.    
        
► Equal to price.        
► Equal to average cost.        
► Less than price.         
► More than price.    
        
►Keynesian economists actively promote the use of fiscal policy while the classical economists do not.         
► Keynesian economists actively promote the use of monetary policy to improve aggregate economic performance while the classical economists do not.         
► Classical economists believe that monetary policy will certainly affect the level of output while the Keynesians believe that money growth affects only prices.         
► Classical economists believe that fiscal policy is an effective tool for achieving economic stability while the Keynesians do not.
        
► Price level will increase.         
► The aggregate demand curve will shift upward.         
► Output level will remain constant.         
►All of the given options.    
        
► Rs. 700 billion.         
► Rs. 650 billion.         
► Rs. 600 billion.         
► Rs. 300 billion.    
        
► Taxes.         
► Saving.         
► Imports.        
► Investment.    
        
► $7,000 billion at a price level of 1.16.         
► $7,000 billion at a price level of 1.12.        
► $7,000 billion at a price level of 1.08.         
►All of the given options.  
        
► $6,034 billion.        
► $8,120 billion.         
► $9,120 billion.        
►Cannot be determined from the given information.     
Reference: by Salman Majeed
       
► Accelerator coefficient = Marginal capital / output ratio.         
► Accelerator coefficient > Marginal capital / output ratio.         
► Accelerator coefficient < Marginal capital / output ratio.         
► None of the given options.    
       
►If the money supply grows at a faster rate than growth in Y_P, there will be inflation.         
► If the money supply grows at the same rate as growth in Y_P, the price level will fall and there will be deflation.         
► If the money supply grows at the same rate as growth in Y_P, the price level will also increase at the same rate as growth in Y_P,.         
► None of the given options.    
       
► All of the given options.         
►Consumer tastes for domestic and foreign goods.         
► Prices of goods at home and abroad.         
► Costs of transporting goods from country to country.   
       ►−$40.        ►−$20        ►  $0.        ►  $20.             
►−$40.         
►−$20.         
► $0.         
► $20.    
        
►Inflation rate.         
►Real exchange rate.         
► Nominal exchange rate.         
►Discount rate.    
       
► Incentive to profit.         
► Foreign aid.         
► Domestic savings.         
► Inflation.     

        
► Improved rate of capital formation.        
►Increase in money supply.         
► Increase in investment in education and training.         
► Rapid technical progress.    
        
► Legal reserves.         
► Excess reserves.         
► Checkable deposits.         
►The reserve ratio.    
        
► Regulate dividend payments by corporations.         
► Control the bond market.         
►Set monetary policy.         
► Publish statistics on banking and related financial matters.    
       
► It will shift the IS curve to the left and decrease both the interest rate and the level of income.         
► It will shift the IS curve to the right and increase both the interest rate and the level of income.         
► It will shift the IS curve to the right and increase the level of income but decrease the interest rate.
        
► Money Market.         
►Goods Market.         
► Labor Market.         
► Financial Market.    
        
► It is upward because higher interest rates induce more investment.         
► It is upward because higher interest rates induce less investment.         
► It is downward because higher interest rates induce more investment.         
► It is downward because higher interest rates induce less investment.    
        
►The demand curve for airline travel shifts left.         
► The demand curve for airline travel shifts right.         
► The supply curve of airline travel shifts left.         
► The supply curve of airline travel shifts right.  
        
►Decreasing returns to scale.         
► Constant returns to scale.         
► Increasing returns to scale.         
► None of the given options.    
       ► The next unit produced will increase revenue without increasing cost.             
► When each firm produces a product that is slightly different from the other firms.        ►When one firm sells a good that has no close substitutes and a barrier blocks entry for other firms.         
► When there are many firms producing the same product.         
► In all of the given situations.    
        
►The level of competition in an industry.        
► The degree of control over prices.         
► The technological gaps between the firms.         
► Marginal cost and marginal benefit analysis.   
       
► Demand is elastic.        
► Demand is inelastic.         
► Supply is elastic.         
► Supply is inelastic.    
       
► Imports.        
► Exports.         
► Poverty.       
► Inflation.    
        
► Growth rate of per capita income - Growth rate of population.        
► Growth rate of population / Growth rate of per capita income.        
►Growth rate of population + Growth rate of per capita income.       
 ► Growth rate of population - Growth rate of per capita income.    
        
► Shares of any of its institute.         
► Stocks.         
►Treasury bills.         
► Debentures.    
        
► Investment = Saving.         
► Money supply = Money demand.        
► Aggregate demand = C + I + G + NX.         
►Aggregate demand = Aggregate supply.    
        
► Investment multiplier effect.         
► Crowding out effects.         
► Government spending effect .         
► None of the given options.    
       
► High growth rate.         
► High literacy rate.         
► Skilled labor.        
► High unemployment rate.    
  A BOP is a sheet in other words an account sheet which is an accounting record of all monetary transactions between a country and the rest of the world. The BOP summarizes international transactions for a specific period, usually a year, and is prepared in a single currency, typically the domestic currency for the country concerned.  Surplus items: Sources of funds for a nation, such as exports or the receipts of loans and investments, are recorded as positive/surplus items. Uses of funds, such as for imports or to invest in foreign countries, are recorded as a negative or deficit item.       It can be determined if we see the things in both prespective.In other words it is a non-complicated way, lets assume that we have two countries Pakistan and united states and things are viewed from Pakistan point of view.  For this purpose we must now the market for foreign exchange. Foreign exchange in a Pakistani context means US $ and in a US point of view it is Pak rupees. Money demand Md increases with income levels. Money demand Md falls with interest rates. In this concept we are talking about real income and real interest rate not the nominal income and nominal interest rate. So this implies to the demand of real money.  Whether nominal and real money supply is equal or not depends much on the assumption regarding prices. If prices are assumed fixed, then the two are equal, otherwise not.            As you can see from the diagram where money demand in on the x-axis and income is on the y-axis, and there are various level showns like L1,L2,L3.        There is solution for how can a current account which is in deficit be restored to balance under fixed exchange rate regimes. The answer is “Economic Deflation” Economic Deflation says  When a country’s national income rises, it spends more; part of that spending falls on imported goods; higher imports cause the current account to worsen. The reverse is also true for this lower income must reduce import spending and therefore improve the current account spending. However, economic contraction is not a good idea to restore current account equilibrium the other alternative solution presented by economist is to devaluate or “devaluation”. Devaluation is the phenomena related to exchange rate where exchange rate faces depreciation but in the context of fixed exchange rates. The complement of devaluation is revaluation. A concept of devaluation is to bring the exchange rate in line with its long-run equilibrium level, i.e. a level consistent with international competitiveness. Competitiveness is simply defined as the real exchange rate RER, where RER = (Pf/Pd)*NER. Where NERà Nominal Exchange rate Pf àis the price level prevailing in the foreign country (US) Pdà is the price level prevailing in the home country (Pakistan). The formula implies that, for a fixed NET if inflation is higher in Pakistan (relative to the US), Pakistani exports will become less attractive in the international market. As a result, our exports will fall, and current account will go into deficit. To fix this problem, the NER can be devalued so as to make our goods cheaper and competitive and it is to bring competitiveness back to its original higher level. However, there are many provisos attached to the devaluation policy prescription. Devaluation only works if the country’s exports and imports are elastic, otherwise the price effect of the devaluation will dominate the volume effect and the current account will worsen. Secondly, the country must have excess productive capacity in order to meet the higher demand for exports that is created as a result of the devaluation. Thirdly, the country should not have a very high foreign debt whose burden increases so much as a result ofthe devaluation that the negative effects associated therewith overwhelm any positive competitiveness effects. + à Incoming FDI, FPI or other private capital -àOutgoing FDI, FPI or other private capital + à Borrowing, aid inflows -àPayments of debt principal, aid outflows     www.vuzs.net      .     Liberalization of prices, removal of subsidies .     Deregulation involving dismantling of licensing systems and red-tape .     Trade liberalization: including tariffication of non-tariff-barriers, harmonization of tariffs and an eventual reduction thereof .     FDI liberalization:  To create a transparent, predictable environment for foreign investors to operate in. .     Capital account liberalization:  To remove controls on capital flows These policies are suggested by world bank and the successful implementation of these policies depend on the political and economic system of poor countries. In general these policies are expected to provide the poor nation with better understanding and help them to raise their growth.