Which TWO of the following government actions would lead to an in... | Economics MCQ [Updated November 2026] | GkGet

1

Keynes's speculative demand for money arises primarily due to:

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2

The term 'Debt Monetization' (or monetizing the deficit) refers to:

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3

According to Keynes's Liquidity Preference Theory, the rate of interest is determined by:

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4

The Long-Run Phillips Curve (LRPC) is generally represented as being:

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5

The Phillips Curve represents the inverse relationship between:

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6

Match the specific Theories of the Business Cycle in LIST-I with their corresponding primary economic drivers or underlying arguments in LIST-II. LIST-I (Business Cycle Theory) A. Monetarist Theory B. Keynesian Theory C. Real Business Cycle Theory D. Austrian Business Cycle Theory LIST-II (Economic Driver/Argument) I. Driven by fluctuations in the credit supply and interest rate manipulation. II. Driven by real shocks to the economy, such as changes in technology and productivity. III. Emphasizes the role of aggregate demand in influencing economic fluctuations. IV. Argues that fluctuations in the money supply play a crucial role. Choose the correct answer from the options given below:

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7

Which of the following statements correctly describe the characteristics and implications of the Phillips Curve model? Testbook I. The short-run Phillips curve (SRPC) represents an inverse relationship between unemployment and inflation. II. Movements along the SRPC represent changes in aggregate demand (AD). III. The Long-Run Phillips Curve (LRPC) is vertical at the natural rate of unemployment / NAIRU. IV. An increase in structural unemployment shifts the LRPC to the right, not left. Choose the correct answer from the options given below:

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8

The ratio of nominal to real Gross Domestic Product is called:

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Which TWO of the following government actions would lead to an increase in aggregate demand? 1. Increasing taxation and keeping government expenditure the same 2. Decreasing taxation and increasing government expenditure 3. Decreasing money supply 4. Decreasing interest rates

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Which TWO of the following government actions would lead to an increase in aggregate demand? 1. Increasing taxation and keeping government expenditure the same 2. Decreasing taxation and increasing government expenditure 3. Decreasing money supply 4. Decreasing interest rates

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