economics MCQs – Page 117

Practise multiple-choice questions from economics for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

economics Mcqs

1. the national economy 2. profit maximizing under perfect competition and monopoly 3. application of economics 4. the aggregate demand aggregate supply model 5. surplus 6. money interest rates and output 7. average and total cost 8. stabilization adjustment reform and privatization 9. risks and diversification efficient market hypothesis 10. the phillips curve 11. supply and demand 12. capital formation investment choice information technology and technical progress 13. aggregate supply unemployment and inflation 14. elasticity 15. comparative gdp 16. roots of modern macroeconomics 17. production factors 18. poverty malnutrition and income inequality 19. trade regulations and industrial policies 20. monetary union 21. exchange rate systems and currency crises 22. economic development in historical perspective 23. exchange rate determination 24. monopoly competition 25. the balance of payments 26. inflation productivity 27. macroeconomic issues and analysis 28. employment migration and urbanization 29. macroeconomic policy tools 30. supply side policies 31. exchange rate adjustments and the balance of 32. miscellaneous 33. taxation 34. trade policies for the developing nations 35. markets efficiency and the public interest 36. the external debt and financial crises 37. budget deficits and the trade balance 38. alternative theories of the firm 39. public goods 40. the meaning and measurement of economic development 41. characteristics and institutions of developing countries 42. agriculture irrigation system of pakistan 43. education health and human capital 44. economic problems of developing countries 45. theories of economic development 46. basic of economics 47. consumer theory vs real consumers 48. applied microeconomics 49. long term economic growth 50. externality internality 51. fiscal and monetary policy 52. prices wages taxes 53. balance of payments aid and foreign investment 54. international factor movements and multinational corporations 55. entrepreneurship organization and innovation 56. the international economy and globalization 57. population and development 58. non tariff trade barriers 59. foundations of modern trade theory 60. global economic development 61. market 62. rural poverty and agricultural transformation 63. regional trading arrangements 64. foreign exchange 65. introduction to economics 66. world economy miscellaneous 67. sources of comparative advantage 68. natural resources and the environment toward sustainable development 69. monopoly 70. asymmetric information 71. income inequality 72. labour market 73. tariffs 74. development planning and policy making the state and the market 75. oligopoly 76. industrial development 77. costs supply and perfect competition 78. human capital 79. monetary fiscal and incomes policy and inflation 80. stocks

2321. New technology in the form of computer spreadsheets has increased the productivity of accountants. This will cause ?
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A. firms to move down their demand curves for accountants

B. the demand curve for accountants to shift to the right, since the productivity of accountants has increased

C. the demand curve for accountants to shift to the left, since it requires fewer accountants than it did before to do the same amount of work.

D. firms to move up their demand curves for accountants

2322. Supply side policies are most appropriate to cure ?
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A. Cyclical unemployment

B. A fall in aggregate demand

C. Involuntary unemployment

D. Voluntary unemployment

2323. Which city is famous for the textile mills that produce finest worsted suiting in the world ?
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A. Haripur

B. Faisalabad

C. Karachi

D. Lawrencepur

2324. IF Unemployment insurance were so generous that it paid laid off workers 95 percent of their regular salary ?
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A. The official unemployment rate would probably overstate true unemployment

B. Frictional Unemployment would fall

C. There would be no impact on the official unemployment rate

D. The official unemployment rate would probably understate true unemployment

E. None of these answers

2325. In the neoclassical theory of growth a higher saving rate leads to ?
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A. a fluctuating growth rates

B. no change in the growth rate

C. a higher growth rates

D. a fluctuating growth rate

2326. The marginal revenue product of capital is the ?
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A. changing value of the capital stock

B. change in a companys balance sheet when it acquires new plant

C. additional value of output from using more capital

D. change in companys share price

2327. Unions achieve a higher wage differential the more _____ and the more ______?
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A. members they have, aggressive they behave

B. inelastic the demand for labour, they can restrict the supply of labour

C. the economy is growing, people prefer leisure

D. the productivity is growing vacancies exist

2328. Which of the following is not an example of foreign direct investment ?
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A. the purchase of bonds or stock issued by a textile company overseas

B. the construction of a new auto assembly plant overseas

C. the creation of a wholly owned business firm overseas

D. the acquisition of an existing steel mill overseas

2329. ____ was a strategy for industrial development popular in Latin America in the 1950s 1 1960s for promoting domestic production by erecting high protective tariffs on imports of manufactured goods ?
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A. import substitution

B. export led growth

C. countervailing duties

D. dynamic hedging

2330. The growth rates of economies tend to converge because ________ is easier when capital per worker is low and because of?
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A. capital-widening Catch-up in technology

B. capital-deepening technical innovation

C. capital-widening technical innovation

D. capital-deepening, catch-up in technology

2331. A Gini coefficient of zero means that the ?
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A. one person has all the income and every one else has nothing

B. all the income is received by the top 20% of the income distribution

C. income is equally distributed

D. the income is split equally between the top 20% and the rest of the distribution

2332. GDP per head may be an imperfect measure of economic welfare because it excludes ?
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A. Externalities

B. Untraded goods

C. Change in the distribution of income

D. All of the above

E. the value of leisure

2333. If, for any reason the wage is held above the competitive equilibrium wage?
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A. Unions will likely Strike and the wage will fall to equilibrium

B. The quality of workers in the applicant pool will tend to fall

C. The quantity of labour supplied will exceed the quantity of labour demanded and there will be Unemployment

D. The quantity of labour demanded will exceed the quantity of labour supplied and there will be a labour shortage

2334. The Marginal Revenue Product is likely to be wage inelastic if ?
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A. It is relatively easy to substitute capital for labour

B. There are many substitutes for the final product

C. Labour costs are a high percentage of total costs

D. Demand for the final product is price inelastic

2335. The greatest advantage of a negative income tax is that it ?
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A. ensures that the poor actually receive what the government thinks they need does all these answers.

B. generates a smaller disincentive to work than most alternative anti-poverty policies.

C. would not provide benefits to lazy people

D. reduces the cost to the government of fighting poverty

2336. Which of the following is an example of a public good ?
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A. Whales in the ocean

B. hot dogs at a picnic

C. national defense

D. apples on a tree in a public park

2337. Horizontal equity holds that ?
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A. those with equal ability to pay should bear unequal tax burdends.

B. those who benefits the most from government services should bear the higher tax burden.

C. those with equal ability to pay should bear equal tax burdens.

D. those who benefit the most from government services should have the greatest voice in determining what gets produced

2338. A period of unemployment due to recession will ?
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A. increase a workers current income and permanent income

B. reduce a workers current income but not necessarily their permanent income

C. affect neither the current nor the permanent income of a worker

D. reduce a workers permanent income but not their current income

2339. Assuming that leisure is a normal good. if an individuals labour supply curve is backward bending then the ?
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A. income effect and the substitution effects are equal

B. substitution effect outweighs the income effect

C. income effect is zero

D. income effect outweighs the substitution effect

2340. In a competitive market, which of the following is least, likely to be the source of a persistent discriminatory wage differential ?
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A. the government

B. All of these answers could be source of a persistent discriminatory wage differential

C. the customer

D. the employer

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