CBSE Guess > Papers > Important Questions > Class XII > 2011 > Economics > Economics By Mr. Pranab Sharma

CBSE CLASS XII

Economics (Revision/Self Assessment test)

Page 10 of 11

91.  A recession in the rest of the world means U.S.
    A) aggregate supply decreases.
    B) aggregate demand decreases.
    C) potential GDP decreases.
    D) exports increase. E) potential GDP increases.
92. ________ increases potential GDP.
    A) A decrease in the money wage rate
    B) A recessionary gap
    C) A recession
    D) An increase in the amount of human capital
    E) An increase in aggregate demand
93. Unemployment increases when
    A) an inflationary gap is created.
    B) potential GDP increases.
    C) the government decreases its expenditure on goods and services.
    D) aggregate demand increases.
    E) aggregate supply increases.
94. In the late 1920s, the U.S. economy experienced a decrease in investment, which perhaps triggered the Great Depression. The decrease in investment
    A) increased aggregate supply.
    B) decreased aggregate supply.
    C) increased aggregate demand.
    D) decreased aggregate demand.
    E) increased potential GDP.
95. When the macroeconomic equilibrium is such that real GDP exceeds potential real GDP, the economy is suffering from ________ and the government policy to eliminate this gap will ________ real GDP and to ________ the price level.
    A) an inflationary gap; increase; increase
    B) a recessionary gap; decrease; decrease
    C) an inflationary gap; increase; decrease
    D) a recessionary gap; increase; decrease
    E) an inflationary gap; decrease; decrease
96. When the macroeconomic equilibrium is such that real GDP is less than potential real GDP, the economy is suffering from ________ and the government policy to eliminate this gap will ________ real GDP and to ________ the price level.
    A) a recessionary gap; decrease; decrease
    B) an inflationary gap; increase; decrease
    C) a recessionary gap; increase; increase
    D) an inflationary gap; decrease; increase
    E) a recessionary gap; decrease; increase
97. Do automatic fiscal stabilizers eliminate business cycles?
    A) Yes
    B) No, because they have no effect if the business cycle is the result of some unanticipated change
    C) No, but they do moderate business cycles
    D) No, they increase the likelihood that a business cycle occurs
    E) No, they make business cycle fluctuations more severe
98. In the long run, the Fed

    i. directly controls the real interest rate.
    ii. has no control over the inflation rate.
    iii. influences the nominal interest rate.

A) i only
B) ii only
C) iii only
D) i and iii
E) i, ii, and iii

99. The Fed decreases the quantity of money to counteract
    A) a recessionary gap.
    B) a federal budget deficit.
    C) positive net exports.
    D) an inflationary gap.
    E) a rise in the unemployment rate.
100. The Fed increases the quantity of money to counteract
     A) a recessionary gap.
     B) a federal budget surplus.
     C) negative net exports.
     D) an inflationary gap.
     E) inflation.

 

Submitted By Mr. Pranab Sharma
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