economics MCQs – Page 126

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 Review each marked answer and report any item that may be outdated or unclear.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 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
2501. The implementation lag for monetary policy is generally ?
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A. the same as it is for fiscal policy

B. unrelated to central bank action

C. much shorter than it is for fiscal policy

D. mush longer than it is for fiscal policy

2502. A reflationary (expansionist) fiscal policy could include ?
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A. An increase in corporation tax

B. Lower interest rates

C. Increased lending by the banks

D. An increase in discretionary government spending

2503. If the international terms of trade settle at a level that is between each countrys opportunity cost ?
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A. There is no basis for gainful trade for either country

B. Both countries gain from trade

C. Only one country gains from trade

D. One country gain and the other country loses from trade

2504. A production function ?
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A. is a function of natural resources in a country

B. depicts the relationship between input and output

C. states the relationship between products and income distribution

D. shows the dependency output of the working population

2505. A difference between forward and futures contracts is that ?
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A. futures contracts involve no brokerage fees or other transactions costs

B. forward contracts occur in a specific locations-for example, the Chicago Mercantile Exchange

C. forward contracts can be tailored in amount and delivery date to the need of importers of exporters

D. futures contracts have negotiable delivery dates

2506. In a production function Y = F(L, K,N,E,T) Y is ?
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A. capital

B. natural resources

C. prevailing technology

D. national product
2507. Monopoly advantage is usually the result of greater opportunities such as ?
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A. #NAME?

B. superior access to training and education

C. access to more economic information than competitors

D. larger firm size

2508. Starting from a position where the nations money demand equals the money supply and its balance of payments is in equilibrium economic theory suggests that the nations balance of payments would move into a surplus position if there occurred in the nation a (an) ?
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A. increase in the money demand

B. decrease in the money demand

C. increase in the money demand

D. None of the above

2509. Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners ?
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A. U.S foreign exchange reserves tend to rise

B. U.S exports tend to rise, and imports tend to fall

C. U.S foreign exchange reserves remain constant

D. U.S imports tend to rise, and exports tend to fall
2510. The simplest explanation based on Lewiss model for rural-urban migration is ?
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A. the availability of labor-intensive jobs in urban areas

B. a higher expected income in urban areas

C. better infrastructure in urban areas

D. That people migrate when urban wages exceed rural wages

2511. If Japan runs current account deficit and exchange rates are floating?
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A. Japanese exports become less expensive for foreign buyers

B. Japanese imports become less expensive for German buyers

C. Japanese exports become more expensive to foreign buyers

D. Japanese imports become more prestigious to German buyers

2512. Automatic stabilisers act to ____ government expenditures and ____ government revenues during recessions ?
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A. decrease; decrease

B. increase: increase

C. decrease; increase

D. increase; decrease
2513. If the marginal rate of tax is 40% and consumers income increase from Rs10,000 to Rs12,000 ?
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A. The amount of tax paid will increase by Rs4,000

B. The amount of tax paid will increase by Rs 800

C. The total tax paid will be Rs4,800

D. The amount of tax paid will increase by Rs4,800

2514. The classical trade theories of Smith and Ricardo predict that ?
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A. Small countries could obtain of the gains from trade when trading with large countries

B. All of the above

C. Countries will completely specialize in the production of export goods

D. Considerable trade will occur between countries with different levels of technology

2515. The supply of foreign currency tends to be ?
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A. upward sloping

B. any of the above

C. downward sloping

D. vertical

2516. According to the Principle of absolute advantage Japan should ?
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A. There is no basis for gainful specialization and trade

B. Export steel

C. Export DVDs

D. Exports steel and DVDs

2517. If the relative price (MRT) of S were to increase, then the price line would ?
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A. shift out in a parallel fashion

B. shift in a parallel fashion

C. Become steeper

D. Become flatter

2518. Exchange rates that are determined by the unregulated forces of supply and demand are ?
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A. fixed exchange rates

B. managed exchange rates

C. pegged exchange rates

D. floating exchange rates
2519. The rise in value of one currency relative to another is ?
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A. An appreciation of a currency

B. a debasement of a currency

C. A depreciation of a currency

D. a weakening of a currency

2520. According to the asset market approach increased investor confidence in the Mexican economy would cause the peso to ?
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A. appreciated because of an increased demand for peso denominated assets

B. depreciated because of an increased demand for peso denominated assets

C. depreciate because of an increased supply of peso denominated assets

D. appreciate because of an increase supply of peso denominated assets