Commercial bank reserves at the Central Bank____________

• A. advancing trade, prospects
• B. controlling credit and money supply
• C. reducing bank frauds
• D. discouraging banking operations

The relationship between Marginal Product (MP) and Average Product (AP) is such that they are equal when

• A. average product is maximum
• B. Average product is minimum
• C. Marginal Product is maximum
• D. Marginal Product is increasing

One of the characteristics of monopolistic competition is that

• A. there is mobility of factors of production
• B. no single seller dominates the market
• C. the firms are price-takers
• D. consumers have perfect knowledge of price

the backward bending supply curve of labour indicates?

• A. an abnormal supply situation
• B. the law of supply
• C. that labour supply and wage are directly related
• D. that the elasticity of supply is uniform

In the short-run a firm marginal cost curve above the point of shut-down is its?

• A. demand curve
• B. supply curve
• C. cost curve
• D. marginal curve

Specialization often improves economic performance because it?

• A. permits exploitation of economies of scale
• B. incorporates external economies
• C. is based on the law of variable proportions
• D. allocates resources according to absolute advantage

Cost-push inflation is likely to raise when

• A. there is an increase in government spending
• B. there is an increase in direct taxes
• C. demand for higher wages is granted
• D. there is a decrease in banks lending

The demand for a commodity not directly for immediate consumption but for the production of another commodity is

• A. competitive demand
• B. derived demand
• C. composite demand
• D. joint demand

The part of income after tax that is not consumed is defined as

• A. Wages and salaries
• B. Saving
• C. Capital investment
• D. Nondurable goods expenditure

Normative economics deals with?

• A. what is and not what should be
• B. facts and not figures
• C. facts and figures
• D. value judgements