Macro Economics MCQ (GK Set-1) with Answers

Macro Economics MCQ (GK Set-1) with Answers

46) Consider the current government budget, where: T1 is today’s net taxes. D1 is government debt at the start of today. G1 is today’s government spending. rG is the real interest rate paid on government debt. All variables are positive.

Answer is:

rGD1 > T1 - G1

47) Suppose the market interest rate is equal to 5%. The price of a bond that promises one payment of Rs.100 in one year would be equal to:

Answer is:

Rs.100 Rs. 1.05

48) The difference between a nation’s current account surplus and its primary account surplus is its

Answer is:

net investment income from abroad

49) If, for Crusoe’s current intertemporal consumption pattern (satisfying his intertemporal budget constraint), his marginal rate of intertemporal substitution is 1 and the real rate of interest is positive, then

Answer is:

Crusoe could increase his lifetime utility by consuming less today

50) What is the permanent income that corresponds to present value of the two-period-income path Y1=100, Y2=125 for the real interest rate r=.5?

Answer is:

110

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