economics MCQs – Page 121

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 Review each marked answer and report any item that may be outdated or unclear.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

2401. Comparative advantage is determined by ?
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A. actual differences in labor productivity between countries

B. relative differences in labor productivity between countries

C. Both (a) and (b)

D. Neither (a) nor (b)

2402. Which of the following explanations of wage differentials is not likely to be true ?
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A. Men have more job experience than women

B. None of the above

C. Employers in competitive markets are bigots

D. Men have more human capital than women

2403. The notion that, following a currency depreciation the balance of trade falls for a while before increasing is called an effect ?
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A. relative price

B. elasticity

C. Pass through

D. J Curve

2404. In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _______ against European currencies?
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A. decrease; appreciate

B. decrease; depreciate

C. increase; appreciate

D. increase; depreciate

2405. An important feature of a _______ is that the holder has the right but not the obligation to buy or sell currency ?
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A. foreign exchange option

B. futures market contract

C. Swap

D. foreign exchange arbitrage

2406. Suppose that the purchasing power parity estimate of the dollar/euro exchange rate is $1.30 per euro, and the current spot rate is $1.3 8 per euro. Comparing these two exchange rates from a long-run viewpoint you would ?
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A. anticipate the dollar to appreciate against the euro

B. anticipate the dollar to depreciate against the euro

C. anticipate the dollars exchange rate against the euro to remain constant

D. have no anticipation concerning future movements in the dollar/euro exchange rate

2407. Roberto and Thomas live in a university hall of residence. Reberto values playing loud music at a value of 100. Thomas values peace and quiet at a value of 150. Which of the following statements is true about an efficient solution to this externality problem if Roberto has the right to play loud music and if there are no transaction costs ?
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A. Thomas will pay Roberto between 100 and 150 and Roberto will continue to play loud music

B. Roberto will pay Thomas 100 and Roberto will stop playing loud music

C. Thomas will pay Roberto between 100 and 150 and Roberto will stop playing loud music

D. Roberto will pay Thomas 150 and Roberto will continue to play loud music

2408. As an economy grows ?
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A. The governments budget position should automatically improve

B. This will have no effect on the governments budget position

C. This will reduce the governments tax revenue

D. The governments budget position should automatically worsen

2409. Given a system of floating exchange rates rising income in the United States would trigger a (an) ?
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A. decrease in the demand for imports and a decrease in the demand for foreign currency

B. increasing in the demand for imports and an increasing in the demand for foreign currency

C. increase in the demand for imports and decrease in the demand for foreign currency

D. decrease in the demand for imports and an increase in the demand for foreign currency

2410. Which example of market expectations causes the dollar to depreciate against the yen expectation that the U.S economy will have ?
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A. lower inflation rates than Japan

B. more rapid money supply growth than Japan

C. higher future interest rates than Japan

D. faster growth than Japan

2411. The budget deficit tends to decrease then ?
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A. GDP decrease slightly

B. GDP decrease rapidly

C. GDP remains unchanged

D. GDP increase

2412. The exchange rate system that best characterizes the present international monetary arrangement used by industrialized countries is ?
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A. managed floating exchange rates

B. pegged or fixed exchange rates

C. adjustable pegged exchange rates

D. freely fluctuating exchange rates

2413. The poorest region of the World is ?
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A. Asia

B. Sub Saharan Africa

C. the Middle East

D. Latin America

2414. If the relative Price (MRT) of T were to increase, then the price line would ?
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A. Become flatter

B. Shift out in a parallel fashion

C. shift in a parallel fashion

D. become steeper

2415. Joseph Schumpeter is the exceptional economist who links the entrepreneur to ?
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A. oligopolistic capitalism

B. land and labor

C. innovation

D. resource management

2416. The J-curve effect refers to the observation that ?
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A. the trade balance usually gets better before it gets worse after a currency appreciation

B. GDP usually decreases before it increases after a currency appreciation

C. GDP usually decreases before it increases after a currency depreciation

D. the trade balance usually gets worse before it improves after a currency depreciation

2417. With International trade, what would be the maximum amount of steel that South Korea would be willing to export to Japan in exchange for each DVD ?
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A. One-half ton of steel

B. One ton of steel

C. Two tons of steel

D. Two and one-half tons of steel

2418. All currencies other than the domestic currency of a given country are referred to as ?
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A. near monies

B. hard currency

C. foreign exchange

D. reserve currencies

2419. If a nations interest rates are relatively low compared to those of other countries then the exchange value of its currency will tend to ?
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A. depreciate under a system of fixed exchange rates

B. depreciate under a system of floating exchange rates

C. appreciate under a system of floating exchange rates

D. appreciate under a system of floating fixed rates

2420. If the autarky price of S were lower in country A than in country B then if trade were allowed ?
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A. None of the above

B. A would likely import S from B

C. A would likely export S to B

D. neither country would want to trade

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