economics MCQs – Page 123

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 Review each marked answer and report any item that may be outdated or unclear.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

2441. Assume identical interest rates on comparable securities in the United States and foreign countries. Suppose investors anticipate that in the future the U.S dollar will depreciate against foreign currencies. investment funds would tend to ?
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A. flow from the United States to foreign countries

B. flow from foreign countries to the United States

C. remain totally in foreign countries

D. remain totally in the United States

2442. Currency speculation is _____ if speculators bet against market forces that cause exchange fluctuations, thus moderating such fluctuations ?
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A. destabilizing

B. stabilizing

C. deflationary

D. inflationary

2443. A pigovian tax on pollution ?
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A. Sets the price of pollution

B. determines the demand for pollution rights.

C. reduces the incentive for technological innovations to further reduce pollution

D. Sets the quantity of pollution

2444. Which exchange rate system does not require monetary reserves for official exchange rate intervention ?
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A. pegged exchanged rates

B. dual exchange rates

C. managed floating exchange rates

D. floating exchange rates

2445. According to the Marshall-Lerner condition if a countrys currency depreciates its trade balance will worsen if ?
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A. elasticity of demand for exports = 0.9; elasticity of demand for imports = 0.4

B. elasticity of demand for exports = 0.7; elasticity of demand for imports = 0.3

C. elasticity of demand for exports = 0.5; elasticity of demand for imports = 0.7

D. elasticity of demand for exports = 0.3; elasticity of demand for imports = 0.6

2446. By restricting labor supply a trade union can _____ and _______?
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A. increase the wage, lower employment

B. maintain the wage, increase employment

C. increase the wage, increase employment

D. maintain the wage, lower employment

2447. If the state Bank of Pakistan wished to pursue an expansionary monetary policy it would ?
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A. sell government securities on the open market

B. increase the minimum reserve asset ratio.

C. raise interest rates

D. buy government securities on the open market

2448. Given a system of floating exchange rates falling income in the United States would trigger a (an) ?
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A. increase in the demand for imports and a decrease in the demand for foreign currency

B. decrease in the demand for imports and a decrease in the demand for foreign currency

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

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

2449. A government might use tax to ?
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A. Discourage consumption of public goods

B. Discourage consumption of positive externalities

C. Discourage consumption of merit goods

D. Discourage consumption of negative externalities

2450. Under managed floating exchange rates if the rate of inflation in the United States is less than the rate of inflation of its trading partners the dollar will likely ?
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A. be officially revalued by the government

B. be officially devalued by the government

C. depreciates against foreign currencies

D. appreciates against foreign currencies

2451. Which of the following is true regarding tradable pollution permits and Pigouvian taxes ?
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A. Pigovian taxes are more likely to reduce pollution to a targeted amount than tradable pollution permits.

B. All of these answers are true

C. To set the quantity of pollution with tradable pollution permits, the regulator must know everything about the demand for pollution rights.

D. Tradable pollution permits efficiently reduce pollution only if they are initially distributed to the firms that can regulator pollution at the lowest cost.

E. Pigouvian taxes and tradable pollution permits create an efficient market for pollution.

2452. If the bank is selling francs for $0.45, then what is the implied franc price of the dollar ?
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A. 2.323

B. 1.999

C. 2

D. 2.222

2453. Consulting firms that use large-scale econometric models to forecast exchange rate movements are engaging in ?
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A. technical analysis

B. nontechnical analysis

C. judgmental analysis

D. fundamental analysis

2454. The idea that the money supply should change to accommodate changes in aggregate demand is associated with the idea of ?
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