All India Management Association (AIMA) 2007 M.B.A Marketing Management Business Economics – II - Question Paper
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19. In the current year, a country with a deficit in its current account having insufficient foreign exchange reserves,
(a) Exports more goods and services than its imports
(b) Is running a deficit in its capital account
(c) Is a net lender to the rest of the world
(d) Is a net borrower from the rest of the world
(e) Always has a balanced capital account. ( one mark)
20. The position of the short run Philips curve depends on
(a) Expected rate of output growth
(b) Expected rate of money supply growth
(c) Expected rate of inflation
(d) Expected rate of interest rate
(e) Expected rate of growth of nominal income. ( one mark)
21. Which of the subsequent is a consequence of a reduction in the needed reserve ratio?
(a) reduce in the credit creation and reduce in the money supply
(b) An increase in the credit creation and reduce in the money supply
(c) An increase in the credit creation and increase in the money supply
(d) reduce in credit creation and increase in the money supply
(e) The money supply remains unaffected. ( one mark)
21. Which of the subsequent is a consequence of a reduction in the needed reserve ratio?
(a) reduce in the credit creation and reduce in the money supply
(b) An increase in the credit creation and reduce in the money supply
(c) An increase in the credit creation and increase in the money supply
(d) reduce in credit creation and increase in the money supply
(e) The money supply remains unaffected. ( one mark)
22. Discretionary fiscal policy refers to
(a) Government spending at the discretion of Parliament
(b) Government spending at the discretion of the President
(c) Elements of fiscal policy that routinely change in value as national income modifications
(d) Deliberate modifications in government spending and taxation aimed at achieving an economic
development
(e) modifications in government spending and taxation aimed at achieving the monetary policy
objectives. ( one mark)
23. Inflation is the increase in the general ________, which is sustained over a period of time.
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