Macroeconomics-LM Model and Mundell Fleming Model [GATE (Graduate Aptitude Test in Engineering) Economics]: Questions 1 - 4 of 24

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Question 1

LM Model and Mundell Fleming Model
Monetary and Fiscal Policy Efficacy

Appeared in Year: 2014 (UGC NET)

Question

MCQ▾

The crowding out effect is zero when (June)

Choices

Choice (4)Response

a.

IS curve is falling and LM curve is rising

b.

Money demand is perfectly interest inelastic, or investment is perfectly interest elastic

c.

There is liquidity trap, or investment is perfectly interest inelastic

d.

All of the above

Question 2

LM Model and Mundell Fleming Model
Monetary and Fiscal Policy Efficacy

Appeared in Year: 2017 (UGC NET)

Question

MCQ▾

As per IS-LM framework, an increase in government expenditure will result in:

Choices

Choice (4)Response

a.

Increase in income and interest rate

b.

Decrease in investment and interest rate

c.

Decrease in income and interest rate

d.

Increase in income only

Question 3

LM Model and Mundell Fleming Model
Monetary and Fiscal Policy Efficacy

Appeared in Year: 2013 (UGC NET)

Question

MCQ▾

Assuming fixed prices, which of the following statements are true?

1. Monetary policy is more effective, flatter the IS-curve.

2. Fiscal policy is less effective, flatter the LM curve.

3. Fiscal policy is more effective, flatter the LM curve.

4. Monetary policy is ineffective and fiscal policy is fully effective in liquidity trap. (September)

Choices

Choice (4)Response

a.

1,3, 4

b.

2,3, 4

c.

1,2, 4

d.

None of the above

Question 4

LM Model and Mundell Fleming Model
Monetary and Fiscal Policy Efficacy

Appeared in Year: 2015 (UGC NET)

Question

MCQ▾

Slope of the LM curve depends upon which of the followings? (June)

Choices

Choice (4)Response

a.

Interest elasticity of investments

b.

Interest elasticity of demand for money

c.

Interest elasticity of income

d.

Question does not provide sufficient data or is vague

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