economics Mcqs
1. the national economy2. profit maximizing under perfect competition and monopoly3. application of economics4. the aggregate demand aggregate supply model5. surplus6. money interest rates and output7. average and total cost8. stabilization adjustment reform and privatization9. risks and diversification efficient market hypothesis10. the phillips curve11. supply and demand12. capital formation investment choice information technology and technical progress13. aggregate supply unemployment and inflation14. elasticity15. comparative gdp16. roots of modern macroeconomics17. production factors18. poverty malnutrition and income inequality19. trade regulations and industrial policies20. monetary union21. exchange rate systems and currency crises22. economic development in historical perspective23. exchange rate determination24. monopoly competition25. the balance of payments26. inflation productivity27. macroeconomic issues and analysis28. employment migration and urbanization29. macroeconomic policy tools30. supply side policies31. exchange rate adjustments and the balance of32. miscellaneous33. taxation34. trade policies for the developing nations35. markets efficiency and the public interest36. the external debt and financial crises37. budget deficits and the trade balance38. alternative theories of the firm39. public goods40. the meaning and measurement of economic development41. characteristics and institutions of developing countries42. agriculture irrigation system of pakistan43. education health and human capital44. economic problems of developing countries45. theories of economic development46. basic of economics47. consumer theory vs real consumers48. applied microeconomics49. long term economic growth50. externality internality51. fiscal and monetary policy52. prices wages taxes53. balance of payments aid and foreign investment54. international factor movements and multinational corporations55. entrepreneurship organization and innovation56. the international economy and globalization57. population and development58. non tariff trade barriers59. foundations of modern trade theory60. global economic development61. market62. rural poverty and agricultural transformation63. regional trading arrangements64. foreign exchange65. introduction to economics66. world economy miscellaneous67. sources of comparative advantage68. natural resources and the environment toward sustainable development69. monopoly70. asymmetric information71. income inequality72. labour market73. tariffs74. development planning and policy making the state and the market75. oligopoly76. industrial development77. costs supply and perfect competition78. human capital79. monetary fiscal and incomes policy and inflation80. stocks
5001. The Short run Phillips curve can shift in response to changes in ?
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A. wage rates

B. unemployment

C. the inflation rates

D. Inflationary expectations
5002. A person who is made redundant because of the contraction of an industry is a victim of ?
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A. structural unemployment

B. demand-deficient unemployment

C. classical unemployment

D. frictional unemployment

5003. The expectations augmented Phillips curve was the Work of which group of economists ?
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A. Monetarists

B. Keynesian.

C. New classical economists

D. Marxists.

5004. In the classical model, potential output cannot be increased by ?
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A. better technology

B. higher labor supply

C. more capital

D. monetary growth
5005. The relative-wage explanation for the existence of downwardly sticky wages emphasizes ?
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A. unspoken agreements between workers and firms that firms will not cut wages

B. the contention that workers in one industry may be unwilling to accept a wage cut unless they know that workers in other industries are receiving similar cuts

C. employment contracts that stipulate workers wages usually for a period of one to three years

D. the incentive that firms may have to hold wages above the market clearing rate

5006. If the income tax rate changes from 30% to 40% on income over Rs30,000 and a persons income is Rs 31,000 then her marginal tax rate is ?
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A. 70%

B. 30%

C. 10%

D. 40%
5007. The equilibrium inflation rate is determined by the intersection of _____ and _____?
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A. IS, LM

B. demand, supply

C. AD, AS

D. Labor demand, labor supply

5008. The Phillips curve shows the trade-off between _____ and _____?
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A. output, employment

B. interest rates, output

C. the inflation rate, the unemployment rate

D. the inflation rate, interest rates

5009. one of the tenets of the classical view of the labor market is that the wage adjustments that are necessary to clear the labor market occur ?
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A. quickly

B. instantly

C. very infrequently

D. slowly

5010. Expansionary fiscal policy in the classical model will cause aggregate demand to _______ potential output?
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A. fluctuate around

B. exceeds

C. fall below

D. remain equal to
5011. If somebody is prepared to work at the going wage rate but cannot find work then they are victims of ?
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A. voluntary unemployment

B. voluntary unemployment

C. classical unemployment

D. Frictional unemployment

5012. If input price prices adjusted very rapidly to output prices as classical economists argue the Philips curve would be ?
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A. downward sloping

B. Vertical or nearly vertical

C. horizontal or nearly horizontal

D. upward sloping

5013. During Periods of rising inflation and rising interest rates we expect the demand for real cash to ?
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A. fluctuates

B. not changes

C. fall

D. rise
5014. The quantity theory of money says that changes in ____lead to equivalent changes in ____ but have no effect on ______?
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A. prices, wages, output and employment

B. output prices, employment

C. nominal money output prices

D. nominal money, the price level, output and employment
5015. According to the classical economists, those who are not working ?
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A. are unable to find a job at the current wage rate

B. have chosen not to work at the market wage

C. have given up looking for a job but would accept a job at the current wage if one were offered to them.

D. are too productive to be hired at the current wage

5016. The measured unemployment rate can be pushed below the natural rate, but ?
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A. only in the short run, and not without inflation

B. only in the long run and only if the price level is constant

C. only is the short run and only if the price level is constant

D. only in the long run and not without inflation

5017. Potential GDP is the level of aggregate output ?
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A. that can be sustained in the long run, if the inflation rate is zero

B. that can be produced at a zero-unemployment rate

C. that can be produced if structural unemployment is zero

D. that can be sustained in the long run without inflation
5018. The view of the Phillips curve that prevailed in the 1960s implied that policies that ?
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A. lower unemployment rate will tend to raise the inflation rate

B. lower inflation rate will tend to raise the unemployment rate

C. raise inflation rate will tend to raise the unemployment rate

D. lower unemployment rate will tend to lower the inflation rate

5019. in general a flatter demand curve is more likely to be ?
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A. price elastic

B. unit price elastic

C. none of these answers

D. price inelastic

5020. If a small percentage increase in the price of a good greatly reduces the quantity demanded for that good, the demand for that good is ?
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A. income inelastic

B. price inelastic

C. price elastic

D. unit price elastic

5021. If the income elasticity of demand for a good is negative it must be ?
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A. a normal good

B. an inferior good

C. a luxury good

D. an elastic good

5022. in general a flatter demand curve is more likely to be ?
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A. price inelastic

B. price elastic

C. unit price elastic

D. none of these answers

5023. If a supply curve for a good is price elastic then ?
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A. the quantity demanded is sensitive to changes in the price of that good

B. None of these

C. the quantity supplied is incentive to changes in the price of that good

D. the quantity supplied is sensitive to changes in the price of that good

E. That quantity demanded is insensitive to changes in the price of that good

5024. Technological improvements in agriculture that shift the supply of agricultural commodities to the right tend to ?
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A. reduce total revenue to farmers as a whole because the demand for food is inelastic

B. increase total revenue to farmers as a whole because the demand for food is elastic

C. increase total revenue to farmers as whole because the demand for food is inelastic

D. reduce total revenue to farmers as a whole because the demand for food is elastic

5025. Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raises its price Rs40 per month the number of subscribers will fall to 20000 Using the midpoint method for calculating the elasticity what is the price elasticity of demand for cable TV in Small Town ?
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A. 0.66

B. 1.4

C. 0.75

D. 2

5026. If consumers think that there are very few substitutes for a good, then ?
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A. demand would tend to be price elastic

B. demand would tend to be price inelastic

C. Supply would tend to be price elastic

D. none of these answers

5027. If a fisher must sell all of his daily catch before it spoils for whatever price he is offered once the fish are caught the fishermans price elasticity of supply for fresh fish is ?
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A. infinite

B. unable to be determined form this information

C. one

D. zero
5028. A decrease in supply (shift to the left) will increase total revenue in that market if ?
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A. supply is price elastic

B. supply is price inelastic

C. demand is price elastic

D. demand is price inelastic
5029. If there is excess capacity in a production facility it is likely that the firms supply curve is ?
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A. none of these

B. price inelastic

C. unit price elastic

D. price elastic
5030. Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raise its price to Rs 40 per month the number of subscribers will fall to 20000 At which of the following price does small Town Cablevision earn the greatest total revenue ?
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A. Rs 30 per month

B. Either Rs 30 or Rs 40 per month because the price elasticity of demand is 1.0

C. Rs 0 per month

D. Rs 40 per month

5031. If an increase in the price of a good has no impact on the total revenue in that market demand must be ?
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A. all of these answers

B. price elastic

C. unit price elastic

D. price inelastic

5032. The price elasticity of demand is defined as ?
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A. none of these answers

B. the percentage change in income divided by the percentage change in the quantity demanded

C. the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good

D. the percentage change in the quantity demanded divided by the percentage change in income.

5033. If demand is linear (a straight line) then price elasticity of demand is ?
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A. inelastic in the upper portion and elastic in the lower portion

B. elastic in the upper portion and inelastic in the lower portion

C. inelastic throughout

D. constant along the demand curve

5034. If consumers always spend 15 percent of their income on food. then the income elasticity of demand for food is ?
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A. 0.15

B. none of these

C. 1.00

D. 1.15

E. 1.5

5035. If supply is price inelastic the value of the price elasticity of supply must be ?
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A. greater than 1

B. less than 1

C. infinite

D. none of these

E. Zero

5036. The demand for which of the following is likely to be the most price inelastic ?
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A. transportation

B. airline tickets

C. taxi rides

D. bus tickets

5037. Which of the following would cause a demand curve for a good to be price inelastic ?
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A. There are a great number of substitutes for the good

B. The good is luxury

C. The good is an inferior good

D. The good is a necessity
5038. If the cross-price elasticity between two goods is negative the two goods are likely to be ?
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A. luxuries

B. substitutes

C. necessities

D. complements
5039. If Toyota builds a new plant in the north of England ?
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A. once the plant starts producing cars UK GDP will rise more than UK GNP

B. There has been an increase in foreign portfolio investment in the UK

C. None of these answers

D. Once the plant starts producing cars UK GDP will rise less than UK GNP

5040. To increase growth, governments should do all of the following except ?
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A. encourage saving and investment

B. nationalize major industries

C. Promote free trade

D. encourage research and development

E. encourage foreigners to investment in your country

5041. Which of the following describes an increase in technological knowledge ?
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A. A farmer sends his child to agricultural college and the child returns to work on the farm

B. A farmer buys another tractor

C. A farmer hires another day laborer

D. A farmer discovers that it is better to plant in the spring rather than in the fall
5042. Which of the following best describes the rate of growth in productivity in the United states over the last fifty years ?
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A. Productivity growth has been steady over the last 50 years

B. Productivity grew slowly from the 1950s through the 1970s and then began to accelerate probably due to advances in computer technology

C. Productivity has been growing more slowly every decade since world War II

D. Productivity grew quickly in the 1950s and 1960s more slowly from the early 1970s through 1995 and then quickly again
5043. The opportunity cost of growth is ?
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A. a reduction in current saving

B. a reduction in current investment

C. a reduction in taxes

D. a reduction in current consumption
5044. When a national has very little GDP per person ?
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A. an increase in capital will likely have little impact on output

B. it has the potential to grow relatively quickly due to the catch-up-effect

C. It must be a small nation.

D. it is doomed to being relatively poor forever

E. none of these answers

5045. Which of the following government policies is least likely to increase likely to increase growth in Africa ?
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A. eliminate civil war

B. All of these answers would increase growth

C. increase expenditure on public education

D. increase restrictions on the importing of American tractors and electronics
5046. Which of the following statements is true ?
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A. Countries all have the same growth rate and level of output because any country can obtain the same factors of production

B. Countries have great variance in both the level and growth rate of GDP/person thus poor countries can become relatively rich over time

C. Countries may have different level of GDP/person but they all grow at the same reate

D. Countries may have a different growth rate but they all have the same level of GDP/person

5047. If in Pakistan real GDP/person in 2004 is Rs18,073 and real GDP/person is 2005 is Rs18,635 What is the growth rate of real output per person over this period ?
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A. 3.0 percent

B. 18.0 percent

C. 18.6 percent

D. 3.1 percent
5048. Once a country is wealthy ?
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A. none of these answers

B. capital becomes more productive due to the catch-up- effect

C. it may be harder for it to grow quickly because of the diminishing returns to capital

D. it no longer needs any human capital

5049. Thomas Malthus argued that ?
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A. an ever-increasing population is constrained only by the food supply resulting in chronic faminies

B. none of these answers

C. labor is the only true factor of production

D. technological progress will continuously generate improvement in productivity and living standards.

5050. Which of the following statements regarding the impact of population growth on productivity is true ?
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A. There is no evidence, yet that rapid population growth stretches natural resources to the point that it limits growth in productivity

B. All of these answers

C. Rapid population growth may dilute the capital stock lowering productivity

D. Rapid population growth may promote technological progress increasing productivity.