Question 1

A simplified representation of a real situation is called:

Accepted Answer

A)  Theory
B)  Hypotheses
C)  Evidence
D)  Economic ModelE) B) and D)
F) A) and C)

Question 2

In a horizontal straight line demand curve, the price elasticity of demand is:

Accepted Answer

A)  Unity
B)  Infinity
C)  Zero
D)  Less than oneE) All of the above
F) A) and D) B

Question 3

If marginal propensity to consume is 0.8, the value of multiplier will be:

Accepted Answer

A)  1
B)  2.5
C)  5
D)  2E) None of the above
F) A) and B) C

Question 4

Keynesian aggregate supply curve is:

Accepted Answer

A)  Perfectly elastic
B)  Perfectly inelastic
C)  Unitary elastic
D)  ParabolaE) C) and D)
F) B) and C)

Question 5

Returns to scale examines the production function in the:

Accepted Answer

A)  Short-term
B)  Medium term
C)  Long term
D)  QuinquinialE) None of the above
F) All of the above C

Exam 3: Macroeconomics, Production Functions and Keynesian Theory of Economics

A simplified representation of a real situation is called: