EconGlow Institute

Which of the following constitute the “impossible trinity”? A. Fixed exchange rate B. No budget deficit C. Free international capital mobility D. Independent monetary policy E. Balance in the balance of payments (A) A, B, C only (B) B, D, E only (C) A, C, D only  (D) A, C, E only Answer:C

In the complete Keynesian macro model, at the liquidity trap region, the aggregate demand curve will be : (A) downward sloping (B) upward rising (C) horizontal (D) vertical  Answer:D

In the standard IS-LM model, we replace the assumption of exogenous money supply with an endogenous money supply as an increasing function of interest rate. Now the LM curve will : (A) be flatter (B) be steeper (C) be negatively sloped (D) remain unchanged Answer:A

Consider a simple Keynesian model where equilibrium output is determined by aggregate demand. Assume investment to be autonomously determined and a constant (s) proportion of income is saved. A rise in ‘s’ in this model will lead to : (A) An increase in equilibrium output (B) A decrease in equilibrium output (C) No change in equilibrium output (D) Can’t say Ans👇

Compared to the free trade equilibrium, when an import tariff is imposed on good X in a small country, then which of the following increase : A. Domestic output of good X B. Domestic demand of good X C. Domestic price of good X D. Domestic tariff revenue Then the following is correct : (A) A and C only (B) B and D only (C) A, C and D only  (D) A, B, C and D Answer:C

If two countries have identical concave production possibilities curve then : (A) There would be no basis for gainful trade (B) Trade would depend on differences in demand conditions  (C) Trade would depend on economies of large scale production (D) Trade would depend on the use of different currencies Answer 👇

Similar to import tariff, import quota tends to result in : (A) Increased consumer surplus and producer surplus (B) Decreased imports and decreased producer surplus (C) Increased government revenue and price (D) Increased producer surplus and price  Answer 👇

An unbiased coin is tossed 400 times, then the probability that the number of heads will be between 150 and 250 is at least : (A) 1/25 (B) 12/25 (C) 24/25 (D) 1

Past data of a doctor’s clinic tells that 10% of patients entering have liver diseases and 5% are alcoholics. According to medical reports among those patients who are diagnosed with liver diseases, 7% are alcoholics. What is the probability of alcoholic people having liver diseases ? (A) 0.14  (B) 0.0005 (C) 0.07 (D) Cannot be derived