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
5251. Current account deficit are offset by______________?
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A. merchandise trade surpluses

B. merchandise trade deficits

C. capital/financial account surpluses

D. capital/financial account deficits

5252. Historically countries at early stages of rapid economic development have tender to experience ?
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A. trade deficits and an excess of domestic savings over investment

B. trade surplus and an excess of investment over domestic saving

C. trade deficit and an excess of investment over domestic saving

D. trade surpluses and an excess of domestic saving over investment

5253. When all of the debit or credit items in the balance of payments are combined ?
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A. capital imports equal capital exports

B. merchandise imports equal merchandise exports

C. the total surplus or deficit equals zero

D. services exports equal services imports

5254. The record of a countrys transactions in goods, services and assets with the rest of the world is its ?
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A. current account

B. capital account

C. balance of payments

D. balance of trade

5255. The U.S balance of payments is constructed by ?
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A. the U.S Department of commerce

B. the U.S Department of labor

C. the U.S Department of Agriculture

D. the council of Economic Advisers to the President

5256. A nation wishing to reduce its current account deficit would be advised to ?
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A. reduce government taxes

B. engage in more government spending

C. decrease domestic consumption

D. increases private investment spending

5257. A countrys transactions with the rest of the world are recorded in the ?
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A. balance of international indebtedness

B. income statements

C. balance of payments

D. balance of financial transactions

5258. Credit (+) items in the balance of payments correspond to anything that ?
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A. decreases the demand for foreign exchange

B. involves payments to foreigners

C. increases the domestic money supply

D. involves receipts from foreigners
5259. Direct investment and security purchases are classified as ?
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A. merchandise trade transactions

B. current account transactions

C. capital account transactions

D. unilateral transfer transactions

5260. All of the following are credit items in the balance of payments except ?
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A. payments for American services to foreigners

B. investment inflows

C. merchandise exports

D. private gives to foreign residents
5261. If there is an increase in the price of apples which causes consumers to purchase fewer kilograms of apples and more kilograms of oranges, the CPI will suffer from ?
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A. bias due to the introduction of new goods.

B. bias due to unmeasured quality change

C. none of these answers

D. substitution bias

E. base year bias

5262. The Phillips curve shows the relationship between inflation and what ?
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A. The rate of price increase

B. Unemployment

C. The rate of growth in an economy

D. The balance of trade

5263. Menu costs in relation to inflation refers to ?
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A. Costs of money increasing its value

B. Costs of revaluing the currency

C. Costs of altering price lists

D. Costs of finding better rates of return

5264. If the nominal interest rate is 7 percent and the inflation rate is 3 percent, then the real interest rate is ?
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A. 4 percent

B. 3 percent

C. 10 percent

D. -4 percent

E. 21 percent

5265. If borrowers and lenders agree on a nominal interest rate and inflation turns out to be less than they had expected ?
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A. neither borrowers nor lenders will gain because the nominal interest rate has been fixed by contract

B. lenders will gain at the expense of borrowers

C. None of these answers

D. borrowers will gain at the expense of lenders

5266. If workers and firms agree on an increase in wages based on their expectations of inflation and inflation turns out to be more than they expected ?
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A. none of these answers

B. firms will gain at the expense of workers.

C. Workers will gain at the expense of firms

D. neither workers nor firms will gain because the increase in wages in fixed in the labor agreement

5267. Inflation can be measured by all of the following except the ?
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A. Producer price index

B. finished goods price index

C. GDP deflector

D. consumer price index

E. All of these answers are used to measure inflation.

5268. Which of the following would probably cause the CPI to rise more than the GDP deflator in the Pakistan ?
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A. An increase in the price of BMWs produced in Germany and sold in the Pakistan

B. An increase in the price of helicopters purchased by the Pak Navy.

C. An increase in the price of Peugeots produced in the Pakistan

D. An increased in the Price of domestically produced armoured vehicles sold exclusively to Iran

5269. If inflation is 8 percent and the real interest rate is 3 percent, then the nominal interest rate must be ?
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A. 5 percent

B. 11 percent

C. 3/8 percent

D. 24 percent

5270. Under Which of the following conditions would you prefer to be the borrower ?
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A. The nominal rate of interest is 5 percent and the inflation rate is 1 percent

B. The nominal rate of interest is 15 percent and the inflation rate is 14 percent

C. The nominal rate of interest is 12 percent and the inflation rate is 9 percent

D. The nominal rate of interest is 20 percent and the inflation rate is 25 percent
5271. An increase in injections into the economy may lead to ?
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A. An outward shift of aggregate supply and demand-pull inflation

B. An outward shift of aggregate demand- and demand-pull inflation

C. An outward shift of aggregate supply and cost push inflation

D. An outward shift of aggregate demand and cost push inflation

5272. In 1989, the CPI was 124.0 in 1990, it was 130.7 What was the rate of inflation over this period ?
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A. 30.7 percent

B. You cant tell without knowing the base year

C. 5.4 percent

D. 5.1 percent

5273. Under which of the following conditions would you prefer to be the lender ?
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A. The nominal rate of interest is 15 percent and the inflation rate is 14 percent

B. The nominal rate of interest is 20 percent and the inflation rate is 25 percent

C. The nominal rate of interest is 5 percent and the inflation rate are 1 percent

D. The nominal rate of interest is 12 percent and the inflation rate is 9 percent

5274. The effect of inflation on the price competitiveness of a countrys products may be offset by ?
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A. Lower inflation abroad

B. A revaluation of the currency

C. A depreciation of the currency

D. An appreciation of the currency

5275. An increase in costs will ?
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A. Reduce the natural rate of unemployment

B. Increase the productivity of employees

C. Shift aggregate supply

D. Shift aggregate demand

5276. Suppose your income rises from Rs19,000 to Rs31,000 while the CPI rises from 122 to 169 Your standard of living has likely ?
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A. risen

B. You cant tell without knowing the base year

C. stayed the same

D. fallen

5277. The basket on which the CPI is based is composed of ?
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A. total current production

B. Products purchased by the typical consumer

C. consumer production

D. raw materials purchased by firms

E. none of these answers

5278. Refer to Figure 24-1 What is the value of the basket in the base year ?
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A. Rs418.75

B. Rs300

C. Rs459.25

D. None of these

5279. According to the Phillips curve unemployment will return to the natural rate when ?
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A. Nominal wages are equal to expected wages

B. Nominal wages are growing faster than inflation

C. Real wages are back at equilibrium level

D. Inflation is higher than the growth of nominal wages

5280. Inflation ?
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A. Reduce the cost of living

B. Reduce the price of products

C. Reduce the purchasing power of a rupee

D. Reduce the standard of living

5281. In the short run unemployment may fall below the natural rate of unemployment if ?
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A. Nominal wages have risen less than inflation

B. Nominal wages have risen less than unemployment

C. Nominal wages have risen at the same rate as inflation

D. Nominal wages have risen more than inflation
5282. An increase in aggregate demand is more likely to lead to demand pull inflation if ?
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A. Aggregate supply is unit elastic

B. Aggregate supply is perfectly elastic

C. Aggregate supply is Perfectly inelastic

D. Aggregate supply is relatively elastic

5283. Which of the following statements is correct ?
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A. The real interest rate is the nominal interest rate minus the inflation rate

B. The nominal interest rate is the real interest rate minus the inflation rate.

C. none of these answers

D. The nominal interest rate is the inflation rate minus the real interest rate

5284. Demand pull inflation may be caused by ?
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A. A reduction in government spending

B. An increase in costs

C. An outward shift in aggregate supply

D. A reduction in interest rate
5285. The price of one countrys currency in terms of another countrys currency is the ?
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A. balance of trade

B. terms of trade

C. exchange rate

D. currency validation

5286. Reducing inflation is a more important objective than economic growth is an example of ?
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A. Normative economics

B. Positive economics

C. Reality economics

D. Objective economics
5287. If the economy is in the expansionary phase of the business cycle, aggregate demand ____ unemployment ____ inflation ____ payments is likely to move towards ____?
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A. rise; falls; rises; deficit

B. falls; falls; falls; surplus

C. is static; low; rise; deficit;

D. falls; rise; falls; surplus

5288. If one country, with floating exchange rates, has higher inflation than its competitors we would expect its exchange rate to ?
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A. appreciate

B. revalue

C. depreciate

D. be in short supply

5289. If VAT rates rise, then costs are likely to ___ and demand is likely to ____?
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A. fall; fall

B. fall; rise

C. rise; rise

D. rise; fall
5290. The situation when a country imports more than it exports is ?
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A. a trade surplus

B. a trade deficit

C. an expansion.

D. a recession

5291. If the economy is in the recessionary phase of the business cycle, aggregate demand ___ unemployment ____ inflation ___ and the current account of the balance of payments is likely to move towards ____?
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A. falls; rises; falls; surplus

B. is static; low; rises; deficit

C. rises; falls; rises; deficit

D. falls; falls; falls; surplus

5292. When capital mobility is perfect interest rate differentials will tend to be offset by ?
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A. current account differences

B. expected exchange rate changes

C. balance of payments difference

D. Price difference

5293. If the Pakistan receives larger than expected revenues from exports then the exchange value of its currency will tend to ?
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A. depreciate

B. appreciate

C. fluctuate more than if exports were lower

D. not be affected

5294. A current account deficit means that a country may ?
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A. increase its stock of foreign assets

B. increases its foreign currency reserves

C. reduce its stock of foreign assets

D. increases its savings

5295. When the $/ exchange rate rises the pound _____ and when the $/ rates falls the pound ________?
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A. depreciates, appreciates

B. appreciates, depreciates

C. becomes more expensive becomes cheaper

D. revalues, devalues

5296. If currency dealers expect the value of the pound to fall, the exchange value will tend to ?
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A. fluctuate more than it would do therwise

B. not be affected

C. depreciate

D. appreciate

5297. Within the circular flow of income, an increase in domestic income will tend to increase ?
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A. inventories

B. exports

C. taxes

D. imports

5298. If Pakistans incomes rise faster than those in most other countries the the exchange value will tend to ?
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A. depreciate

B. appreciate

C. fluctuate more than it would do otherwise

D. not be affected

5299. Which of the following can the government not use directly to control the economy ?
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A. investment in education

B. Pay rates within the private sector

C. Benefits available for the unemployed and sick

D. pay rates in the public sector

5300. If the economy is in the though phase of the business cycle, aggregate demand ____ unemployment ______ inflation ______ and the current account of the balance of payments is likely to move towards ________?
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A. rises; falls; rises; deficit

B. falls; rises; falls; surplus

C. is static; low; rises; deficit

D. falls; falls; falls; surplus