economics MCQs – Page 119

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 Review each marked answer and report any item that may be outdated or unclear.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

2361. The response lag of stabilization policy represents ?
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A. the time that it takes for the economy to adjust to the new conditions after a new policy has been implemented

B. the time needed for parliament to agree to a tax cut.

C. the time that is necessary to put the desired policy into effect

D. the time that it takes for policy makers to recognize the existence of boom of bust

2362. The franc is said to be selling at a _______ if the spot dollar price is $0.48 and the nine-month forward rate is $0.42 ?
0

A. None of these

B. forward premium

C. forward spread

D. forward discount

2363. Disguised unemployed is?
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A. due to capital formation and the level of technology remaining constant.

B. when marginal revenue productivity of labor is zero

C. the rigid factor proportions in LDC agriculture and industry

D. the same as seasonal unemployment of LDC agricultural

2364. The extent to which a change in the exchange rate leads to changes in import and export prices is known as the ?
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A. absorption effect

B. J Curve effect

C. pass through effect

D. Marshall Lerner effect

2365. If the economy grows the governments budget position will automatically ?
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A. Increase with inflation

B. worsen

C. Improve

D. Stay the same

2366. Which of the following is true regarding the earning of attractive versus unattractive workers ?
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A. Attractive people tend to earn less because attractive people are viewed as shallow and more self-absorbed and therefore, as less productive

B. Attractive people tend to earn more because they may actually have a larger value of marginal product

C. Attractive people tend to earn less because attractive people usually have less human capital

D. Attractive people tend to earn more because attractive people usually have greater human capital

2367. International trade is based on the nation that ?
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A. Resources are more mobile internationally that are goods

B. Different currencies are an obstacle to international trade

C. Goods are more mobile internationally than are resources

D. A countrys exports should always exceed its imports

2368. The real effective exchange rate for the U.S dollar ?
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A. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners unadjusted for inflation?

B. reflects only transactions in the currency futures market

C. reflects only the influences of merchandise or real trade on the dollars exchange value

D. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners adjusted for inflation?

2369. For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflation rate equals 7 percent the above variables would cause investment funds to flow from ?
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A. the United States to Switzerland causing the dollar to depreciate

B. the United States to Switzerland causing the dollar to appreciate

C. Switzerland to the United States causing the franc to depreciate

D. Switzerland to the United States causing the franc to appreciate

2370. The least common type of transaction in the foreign exchange is a ?
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A. spot transaction

B. None of the above

C. swap transaction

D. forward transaction

2371. Under a system of floating exchange rates relatively high productivity and low inflation rates in the United States results in a (an) ?
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A. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar

B. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar

C. increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar

D. decrease in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar

2372. Goodharts Law suggests that ?
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A. monetary policy can only be effective if it is a long-term policy

B. controlling one part of the money supply will merely result in that item becoming less important

C. the money supply must only expand at the rate of growth of real national income

D. bad money drives out good

2373. The Relative price (MRT)of S in terms of T i ?
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A. 2

B. 1/2

C. 0

D. 1000

2374. The opportunity cost of one DVD in Japan is ?
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A. Two tons of steel

B. Four tons of steel

C. One ton of steel

D. Three tons of steel

2375. The Protestant Ethic and the Spirit of Capitalism was written by ?
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A. Max Weber

B. Adam Smith

C. Joseph Schumpeter

D. William Baumol

2376. According to the signaling view of the education ?
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A. only helps firms sort workers into high ability and low-ability workers

B. can make any worker into a superstar

C. reduces the wage gap between high-skill and low-skill workers.

D. increases human capital and the wages of workers

2377. The marginal rate of tax paid is ?
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A. Total income / total tax paid

B. Change in income / change in tax paid

C. The total tax paid / total income

D. Change in the tax paid / change in income

2378. Which of the following is not a reason why some workers are paid above the equilibrium wage ?
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A. unions

B. minimum-wage laws

C. beauty

D. efficiency wages

2379. Assume that a Big Mac hamburger cost $3 in the United States 2 pesos in Mexico The implied purchasing power parity exchange rate between the peso and the dollar is ?
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A. 1.67 pesos = $1

B. 0.8 pesos = $1

C. 1.25 pesos = $1

D. 0.67 pesos = $1

2380. John Stuart Mill was the founder of the ?
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A. Theory of reciprocal demand

B. Theory of absolute advantage

C. Theory of mercantilism

D. Theory of comarative advantage

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