CeIncreases the real money supply and shift the LM schedule leftward
D:-Reduces real money supply and shift the LM schedule leftward

Correct Answer:- Option-D
‘Question30:-The Philips curve shows
‘AAn inverse relationship between real and nominal wage rate
B:-An inverse relationship between rate of inflation and rate of unemployment
(C-An inverse relationship between real and nominal money supply
D:-A positive relationship between the rate of inflation and the nominal wage
Correct Answer:- Option ®
Question31:-The fundamental cause of crowding out is an
‘AcIncrease in the interest rate caused by a fiscal policy stimulus
B:-An increase in the interest rate caused by a monetary policy stimulus
C-Decrease in interest rate caused by a fiscal policy stimulus
D-Decrease in interest rate caused by monetary policy stimulus
Correct Answer:- Option-é
Question32:-LM curve in the general equilibrium
‘Achat identifies the combinations of income and the interest rate at which money market is in equilibrium
B:-Shows the demand for money equals supply of money

೦-507 combinations of income and interest rates where money market is in equilibrium

D-Both (A) and (B)
Correct Answer:- Option-D
Question33::Which of the following statements is correct in case of new classical macro economics?
‘As Continuous market clearing
B:-Imperfect information
C-Complete information on aggregate price level
D-Both (A) and (B)
Correct Answer:- Option-D
Question34:-Real business cycle model explains

AcBusiness cycles in output as the result of slowly changing shocks to supply
conditions and technology

B:-Work more at low real wage
C:Enjoy leisure in periods of high real wage
D:-None of the above

Correct Answer: Option:

Question35:-The cumulative loss of output incurred during a disinflation divided by the permanent
reduction in the inflation rate is called

Acgratio
B:-Money multiplier
C-Sactifce ratio
D:-High powered money
Correct Answer:- Option-C
Question36:-Seignorage is the
‘A-Revenue that the government receives from inflation
Belt is equal to the inflation rate times real high powered money
C:Revenue that the goverment receives from disinflation
D-Both (A) and (B)
Correct Answer:- Option-D
Question37:-New Keynesian economics explains

AcRigidity in prices and wages as consistent with self interest of firms and workers all of which are assumed to have rational expectations
B:-Flexibility in prices