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
5351. Government policies that focus on changing taxes and government spending are called ?
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A. monetary policies

B. fiscal policies

C. incomes policies

D. supply-side policies

5352. Which of the following is not a macroeconomic issue ?
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A. Inflation

B. Economic growth

C. The wages paid to footballers

D. Unemployment

5353. Classifying discouraged workers as unemployed would ?
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A. decrease the unemployment rate

B. have an indeterminate impact on the unemployment rate

C. not change the unemployment rate

D. increase the unemployment rate
5354. Which of the following is not likely to be government objective ?
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A. Increasing economic growth

B. Increasing the level of exports

C. Increasing government spending

D. Increasing employment
5355. Aggregate demand is the total demand for all goods and services in an economy from ?
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A. all sectors of except the rest of the world

B. the household and government sectors

C. all sectors of the economy including the rest of the world.

D. the household sector.

5356. An economy that trades with and has financial dealing with other countries is called a/an ________ economy?
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A. open

B. free-trade

C. mixed

D. autarkic

5357. Which of the following is a policy instrument as opposed to a government objective ?
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A. lower interest rates

B. Lower unemployment

C. Faster economic growth

D. A better balance of trade position

5358. As prices rise, there will be costs of constantly changing price-tags and reprinting price-lists This is called ?
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A. cost-push inflation.

B. menu costs of inflation

C. real balance effect

D. money illusion.

5359. If interest rates rise then costs are likely to _______ and demand is likely to _________?
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A. fall; rise

B. rise; rise

C. rise, fall

D. fall; fall

5360. The record of countrys imports and exports of goods and services is called its ?
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A. balance of payments on current account

B. balance of payments.

C. balance of trade

D. visible trade balance

5361. Which of the following is not TRUE about rural urban migration ?
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A. The urban share of total LDC population grew from 27 percent in 1975 and 35 percent in 1992 to 40 percent in 2003

B. Migration to the cities is a larger contributor than natural population growth to urban labor growth is sub Saharan Africa

C. In Latin America natural population increase is the major source of urban growth

D. From 1975 to 2000 the number of cities in LDC with populations over 1 million increased from 20 to 50

5362. Entrepreneurship is the ?
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A. residual of a production function

B. technique to manage raw materials efficiently

C. blueprint on how to manage the labor force

D. resource coordinating other productive resources
5363. During the Great Depression workers in DCs who took inferior jobs as a result of being laid off were known as ?
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A. voluntarily unemployed

B. seasonally unemployed

C. cyclical unemployed

D. disguised unemployed
5364. Policies to reduce factor price distortion include?
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A. #NAME?

B. Encouraging small-scale industry

C. Setting market-clearing exchange rates

D. Decreasing subsidies to capital investors

5365. The unemployment rate is the ?
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A. unemployed divided by employed

B. total employment divided by population

C. employed plus unemployed divided by labor force

D. labor force divided by population

5366. Which of the following is not capita good ?
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A. inventories

B. consumers goods

C. buildings

D. plant and equipment

5367. A production function ?
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A. depicts the relationship between input and output

B. shows the dependency output of the working population

C. is a function of natural resources in a country

D. states the relationship between products and income distribution

5368. According to Harris and Todaro, creating urban jobs by expanding industrial output ?
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A. induces government to increase minimum wages

B. is insufficient for solving the urban unemployment problem

C. will generate more government revenue through urban wages

D. will generate capital-intensive technologies
5369. The invisibly underemployed ?
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A. result from an inadequate use of workers capacities

B. are workers who are compelled to work short hours

C. are part-time workers who voluntarily work short hours

D. None of the above is correct

5370. The theoretical basis for zero marginal productivity of labor was the concept of ?
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A. marginal rate of substitution

B. labor force literacy

C. substitution of leisure and work among labor

D. limited technical sustainability of factors
5371. The simplest explanation based on Lewiss model for rural-urban migration is ?
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A. a higher expected income in urban areas

B. better infrastructure in urban areas

C. the availability of labor-intensive jobs in urban areas

D. That people migrate when urban wages exceed rural wages

5372. In a production function Y = F(L, K,N,E,T) Y is ?
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A. national product

B. capital

C. natural resources

D. prevailing technology

5373. The openly unemployed in LDCs are usually from all of the following except ?
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A. from the poorest 1/5 of the population

B. persons 15 to 24 years old

C. the educated

D. residents of urban areas

5374. Labor skills are a major component of ?
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A. morbidity

B. mortality

C. fertility

D. population quality
5375. Based on Nafziger and Auvinens study high unemployment rates ?
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A. represent a vast underutilization of human resources

B. are associated with middle age rural uneducated males

C. #NAME?

D. are potential source of social unrest and political discontent

5376. Which of the following is not TRUE about unemployed in LDCs ?
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A. Unemployment in rural areas is twice that of urban areas

B. World-wide there are fewer unemployed females than males, but the rate is higher for women

C. The unemployment rate for youths is twice that of people over 24

D. The unemployed are relatively well educated

5377. Disguised unemployed is?
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A. the rigid factor proportions in LDC agriculture and industry

B. when marginal revenue productivity of labor is zero

C. the same as seasonal unemployment of LDC agricultural

D. due to capital formation and the level of technology remaining constant.

5378. The Keynesian remedy for unemployment is to ?
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A. decrease aggregate demand

B. reduce tax rates or lower interest rates

C. decrease private consumption and investment

D. decrease government spending

5379. Which of the following is an automatic stabilizer ?
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A. Unemployment benefits

B. spending on the space shuttle

C. Spending on public schools

D. Military spending

E. All of these answers are automatic stabilizers

5380. The initial effect of an increase in the money supply is to ?
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A. increase the price level

B. decrease the interest rate

C. increase the interest rate

D. decrease the price level

5381. Suppose a wave of investor and consumer optimisms has increased spending so that the current level of input exceeds the long-run natural rate If policy makers choose to engage in activist stabilization policy they should ?
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A. decrease taxes, which shifts the aggregate demand curve to the right

B. decrease taxes, which shifts the aggregate demand curve to the left

C. decrease government spending Which the shifts the aggregate demand curve to the left

D. decrease government spending which shifts the aggregate demand curve to the right

5382. When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ?
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A. decrease the quantity demanded of money

B. increase the quantity demanded of money

C. decreases the demand for money

D. None of these answers

E. increases the demand for money

5383. Which of the following best describes how an increase in the money supply shift the aggregate demand curve ?
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A. The money supply shifts right prices fall spending increases and the aggregate demand curve shifts right

B. The money supply shifts right the interest rate rises investment decreases and the aggregate demand curve shifts left

C. The money supply shifts right, prices rise, demand curve shifts left

D. The money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right
5384. An increase in the marginal propensity to consumer (MPC) ?
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A. has no impact on the value of the multiplier?

B. rarely occurs because the MPC is set by congressional legislation

C. raises the value of the multiplier

D. lowers the value of the multiplier

5385. Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?
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A. The aggregate demand curve shifts to the right by more than Rs 16 billion

B. the aggregate supply curve shifts to the left by more than Rs 16 billion

C. The aggregate demand curve shifts to the left by more than Rs 16 billion

D. The aggregate supply curve shifts to the right by more than Rs 16 billion

5386. For the Eurozone countries, the most important source of the downward slope of the aggregate demand curve is probably ?
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A. The interest-rate effect

B. The fiscal effect

C. None of these answers

D. The wealth effect

E. The exchange-rate effect

5387. Which of the following statements regarding taxes is correct ?
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A. A decrease in taxes shifts the aggregate supply curve to the left

B. A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.

C. An increase in taxes shifts the aggregate demand curve to the right

D. Most economists believe that in the short run the greatest impact of a change in taxes is on aggregate supply, not aggregate demand

5388. Keynes liquidity preference theory of the interest rate suggests that the interest rate is determined by ?
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A. the supply and demand for loanable funds

B. aggregate supply and aggregate demand

C. the supply and demand for labor

D. the supply and demand for money
5389. When an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of ?
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A. The multiplier effects

B. The crowding out effect

C. supply side economics

D. None of these answers

5390. If the marginal propensity of consume MPC is 0.75 the value of the multiplier is ?
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A. 7.5

B. 0.75

C. 4

D. 5

5391. The initial impact of an increase in government spending is to shift ?
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A. aggregate supply to the left

B. aggregate demand to the right

C. aggregate demand to the left

D. aggregate supply to the right

5392. In the market for real output, the initial effect of an increase in the money supply is to ?
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A. shift the aggregate demand curve to the right

B. shift the aggregate supply curve to the left

C. shift the aggregate supply curve to the right

D. shift the aggregate demand curve to the left

5393. Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending If the US federal Reserve (Which has a broader remit than the Bank of England Which is charged only with controlling inflation) chooses to engage in activist stabilization policy it should ?
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A. decrease government spending and increase taxes

B. decrease interest rates

C. decrease the money supply

D. Increase government spending and decrease taxes

5394. When supply and demand for money are expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the price level ?
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A. None of these answers

B. shifts money demand to the left and decrease the interest rate

C. shifts money demand to the right and increases the interest rate

D. shifts money demand to the right and decreases the interest rate

E. shifts money demand to the left and increases the interest rate

5395. When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?
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A. supply-side economics

B. None of these answers

C. The crowding-out effect

D. The multiplier effects

5396. Which of the following statements about stabilization policy is not true ?
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A. When policy makers implement activist stabilization policies there is a significant risk that their policies may actually have a destabilizing effect

B. None of these answers are true

C. Many economists prefer automatic stabilizers because they affect the economy with a shorter lag than activist stabilization policy

D. Long lags enhance the ability of policy makers to fine tune the economy
5397. According to the Laffer curve, as tax rates increase tax revenue ?
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A. decrease continuously.

B. initially increase and then decrease

C. rise continuously

D. initially decrease and then increase.

5398. Which of the following statements supports deregulation of industries ?
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A. Many instances of government regulation have succeeded in reducing competition in industries where competition may be beneficial

B. All of the above

C. Because few real natural monopolies exist, there is rarely a reason for government regulation.

D. Technological change has made it possible for many industries to become more competitive

5399. A way of helping depressed regions by having lower wages lower local taxes and lower unemployment benefit has been suggested as ?
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A. market-orientated economists

B. new-Keynesian

C. Keynesian.

D. left-wing theorists

5400. New classical economists advocate reducing welfare payments to people who are unemployed or single parents. The economic reasoning used was that this would ?
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A. reduce unemployment

B. reduce poverty

C. help small businesses

D. weaken the power of trade unions