Practice Research Questions and Answers

• Country A can produce 10 units of cloth or 5 units of wine in a day. Country B can produce 6 units of cloth or 4 units of wine in a day. Which country has ...
• Country A can produce 10 units of cloth or 5 units of wine in a day. Country B can produce 6 units of cloth or 4 units of wine in a day. Which country has ...
• In the Classical model, what is the shape of the Aggregate Supply (AS) curve in the long run, and why?
• The Fisher Effect postulates a relationship between the nominal interest rate (i), the real interest rate (r), and the expected inflation rate (πe). If th...
• Within the AD-AS model, a phenomenon known as stagflation is best represented by a shift in which curve, and with what consequence for the short-run equili...
• The Ricardian Equivalence Theorem suggests that a budget deficit financed by issuing government bonds will have no effect on aggregate demand. This theorem...
• According to the Solow Model, which factor is primarily responsible for sustained economic growth in the long run?
• In the Solow Model, what is the impact of an increase in the savings rate on the steady state level of capital per worker?
• The Taylor Rule is a guideline for central banks setting the nominal federal funds rate (iT). If the rule is given by iT=r∗+π+0.5(π−π∗)+0.5(Y−Y�...
• Which policy tool is more effective under a fixed exchange rate regime according to the Mundell-Fleming Model?
• Which scenario best describes the 'trilemma' or 'impossible trinity' in the context of the Mundell-Fleming Model?
• In the context of lexicographic utility functions, which of the following scenarios is impossible?
• In a Cournot duopoly, if one firm increases its output, how does the other firm typically respond?
• A Lerner Index of 0 indicates which of the following market conditions?
• Which of the following best describes the short-run Aggregate Supply (AS) curve in the presence of sticky wages?
• If the Gross Domestic Product (GDP) at market prices is $1,000 billion, the indirect taxes are $200 billion, and subsidies are $50 billion, what is the Gro...
• Which of the following deficits indicates the true current fiscal position of the Indian Economy?
• Suppose that one million unemployed persons in a country are receiving Rs. 6000 per month per person as an unemployment allowance. If the government, inste...
• The Compensating Wage Differential theory predicts that, ceteris paribus, jobs that are considered less desirable (e.g., higher risk or unpleasant conditio...
• What was the primary reason for the reduction in India's current account deficit from USD 67 billion in 2022-23 to USD 23.2 billion in 2023-24?
• Consider a firm with a production function Q=LαKβ operating in a perfectly competitive product market with price P. If the firm is a monopsonist in the l...
• Which labor market outcome is consistent with the Efficiency Wage Theory?
•  The Laffer Curve in a labor market context illustrates the relationship between:
• A monopolist sells its product in two separate markets with different price elasticities of demand. The marginal cost of production is constant at $20 per ...
• A company using first-degree price discrimination has a demand curve given by P=100−2Q. If the marginal cost of production is $10 per unit, what is the t...
• In a model with two goods, x & y, with x plotted on the horizontal axis, the price consumption curve generated by changing the price of x is parallel to th...
•   The equilibrium level of income is
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• Revealed preference theory assumes
• lumpsum tax is levied on the monopolist, the burden will be borne by
• Suppose after paying bills and setting aside some money for retirement, Joana has $130 left to spend on just two goods: concerts and books. For simplicity,...
• The 2nd phase (diminishing returns to a factor) is exhibited by the following total product sequence
• Which method is used by Hicks to eliminate the income effect when price of a product is changed           
• Which of the following statements is true      
• The substitution effect for a commodity is
• If positive income effect is less than the substitution effect: the product will be 
• Which is not a fixed cost?