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Latest NTS MCQs NTDC Test Sample Paper for Chief Economist (Solved) Must Prepare Now

Latest NTS MCQs NTDC Test Sample Paper for Chief Economist (Solved) Must Prepare Now

  1. Assume that there are only two goods: A and B
    In the base year, Quantity Price
    A 10 $1
    B 10 $4
    In the current year, Quantity Price
    A 20 $ 5
    B 25 $20
    The Consumer Price Index (CPI) for the current year is:
    a. 50
    b. 100
    c. 200
    d. 500
    e. 600
  2. Which of the following groups is most hurt by unexpected inflation?
    a. workers with cost of living adjustments in their labor contracts
    b. homeowners
    c. people with large debts to pay for their homes and cars
    d. people with large retirement savings held in savings accounts
  3. If the nominal interest rate is 5% and the inflation rate is 2%, the real interest rate is:
    a. 2%
    b. 3%
    c. 5%
    d. 7%
    e. 2 ½%
  4. For which of the following reasons might inflation cause Real GDP to grow slower than it otherwise would?
    a. Inflation makes everyone poorer
    b. Inflation reduces the value of consumer debt
    c. Inflation increases business investment spending
    d. Inflation decreases savings in financial form
  5. Disposable Income is equal to:
    a. National Income c. National Income Minus Taxes
    b. Real GDP
    c. National Income Minus Taxes
    d. National Income Minus Taxes Plus Transfers
  6. Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000, and spend $7,000 on consumer goods. Business Investment spending is $2000. In order to avoid recessions and inflation (to have equilibrium), the government should have a:
    a. balanced budget
    b. budget deficit of $1000
    c. budget surplus of $1000
    d. budget deficit of $2000
  7. According to Keynes, when the Great Depression started, the government should have:
    a. done nothing
    b. decreased the money supply
    c. had a large increase in government spending
    d. enacted high tariffs, such as the Smoot-Hawley Tariff
  8. If the government lowers taxes by $10 billion, the Real GDP will rise by
    a. more than $10 billion
    b. less than $10 billion
    c. exactly $10 billion
  9. Which of the following is an automatic stabilizer?
    a. unemployment benefits
    b. spending on education
    c. defense spending
    d. net interest
  10. “Crowding out” means that
    a. a government budget deficit lowers interest rates and causes investment spending to rise
    b. an increase in marginal tax rates lowers production
    c. a government budget deficit raises interest rates and causes investment spending to fall
    d. a government budget deficit raises American exports and lowers American imports
  11. Which of the following IS a function of money?
    a. medium of exchange
    b. store of value
    c. unit of accounting
    d. all of the above
  12. Which of the following is a component of M-1?
    a. savings deposits
    b. credit card
    c. checkable deposits
    d. gold
  13. Which of the following is a NOT component of M-2?
    a. small time deposits
    b. money market mutual funds
    c. stocks
    d. checkable deposits
  14. Which of the following is true about the Federal Reserve System (Fed)?
    a. it is a system of 12 central banks
    b. its Board of Governors is elected by a vote of the people
    c. its main policy-making body is the FDIC
    d. it accepts deposits from the public and makes loans to businesses
    e. all of the above
  15. An IOU of the Federal Reserve Bank of San Francisco to Bank of America is called:
    a. discounts
    b. federal funds
    c. reserves
    d. collateral
  16. Which of the following is the most liquid?
    a. a savings account
    b. a 6 month CD
    c. a home
    d. water
  17. The monetary base is composed of:
    a. gold and silver
    b. currency only
    c. currency and reserves
    d. currency and checkable deposits
  18. If the monetary base is increased by $1,000 and the reserve requirement is 10% (1/10), by how much will the money supply be increased?
    a. $100
    b. $1,000
    c. $5,000
    d. $10,000
  19. If the Federal Reserve wishes to increase the money supply, it should:
    a. raise the reserve requirement
    b. raise the discount rate
    c. buy Treasury securities in the open market
    d. all of the above
  20. An increase in the money supply will cause interest rates to
    a. rise
    b. fall
    c. remain unchanged

Answers: 1.D  2. D  3.B  4.D  5.D  6.C  7.C  8.A  9.A  10.C

Answers: 11.D  12.C  13.C  14.A  15.C  16.A  17.C  18.D  19.C  20.B

Latest NTS MCQs NTDC Test Sample Paper for Chief Economist (Solved) Must Prepare Now