economics MCQs – Page 129

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 Review each marked answer and report any item that may be outdated or unclear.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

2561. The earliest statement of the principle of comparative advantage is associated with ?
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A. David Ricardo

B. Eli Heckscher

C. Berti IOhlin

D. Adam Smith

2562. If a Big Mac hamburger sells for the same dollar value in New York as in London then ?
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A. the inflation rate in each country will necessarily equal 1 percent

B. purchasing power parity holds

C. the exchange rates are said to be fixed pegged to each other

D. the inflation rate in each country will necessarily equal zero

2563. According to the human capital view of education ?
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A. can make any worker into a superstar

B. has no impact on the human capital of workers?

C. increases human capital and the wages of workers

D. only helps firms sort workers into high ability and low-ability workers.

2564. If a country has a bowed out (concave to the origin) production possibility frontier then production is said to be subject to ?
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A. increasing opportunity costs

B. constant opportunity costs

C. first increasing and then decreasing opportunity costs

D. decreasing opportunity costs

2565. A positive externality generates ?
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A. a social cost curve that is above the supply curve (private cost curve) for a good

B. a social value curve that is below the demand curve (private value curve) for a good

C. none of these answers

D. a social value curve that is above the demand curve (private value curve) for good

2566. Which of the following could be considered critical s in development economics ?
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A. What are the major theories of economic development

B. How do the poorest 2/3 of the world live?

C. All of the above are correct

D. what factors affect labor skills in the third world?

2567. Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?
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A. e of the above

B. depreciate by 8 percent against the yen

C. remain at its existing exchange rate

D. appreciate by 8 percent against the yen

2568. According to the Classical theory of international trade ?
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A. Only countries with high wages will import

B. Only countries with low wages will export

C. Countries with high wages will have higher prices

D. All of the above are false

2569. If countries were to trade along the lines of comparative advantage ?
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A. A would export X to B

B. None of the above

C. Neither country would want to trade

D. A would export Y to B

2570. Which of the following are not third-world regions ?
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A. Africa

B. Asia

C. Australia

D. Latin America

2571. The shorter the ______ pass through period the ______ the desirable BOT effects of evaluation on quantities traded will appear ?
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A. sooner

B. bigger

C. longer

D. smaller

2572. A fiscal expansion in the UK ?
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A. tends to appreciate the pound sterling

B. does not affect the price of the pound sterling

C. tends to depreciate the pound sterling

D. has no predictable effect on the price of the pound sterling?

2573. For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from ?
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A. The Japan to United States, causing the dollar to appreciate

B. The Japan to United States, causing the dollar to depreciate

C. The United States to Japan causing the dollar to appreciate

D. The United States to Japan causing the dollar to depreciate

2574. To internalize a positive externality an appropriate public policy response would be to ?
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A. have the government produce the good until the value of an additional unit is zero

B. tax the good

C. ban the good creating the externality

D. subsidize the good

2575. The difference between bid (buying) rates and ask (selling) rates is called the ?
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A. forward transaction

B. spread

C. profit

D. arbitrage

2576. With international trade, what would be the maximum number of DVDs that Japan would be willing to export to South Korea in exchange for each ton of steel ?
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A. Three DVDs

B. Four DVDs

C. One DVD

D. Two DVDs

2577. The reduction or covering of foreign exchange risk is called ?
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A. hedging

B. arbitrage

C. intervention

D. speculation

2578. The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the ?
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A. trade feedback theory

B. J-curve theory

C. price feedback theory

D. purchasing power parity theory

2579. Due to Japans high saving rate, suppose that the Japanese invest abroad. This investment may result in a/an _______ of the Japanese yen and therefore a for Japan?
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A. depreciation; trade deficit

B. appreciation; trade surplus

C. appreciation; trade deficit

D. depreciation; trade surplus

2580. The analysis considers the ability of domestic and foreign price of adjust to devaluation in the short run ?
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A. currency contract period

B. pass through

C. absorption

D. adjustment mechanism

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