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
601. If GDP for Barbados is $260 million in 2011 and its population is 260,000 GDP per capita is ?
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A. 0.001

B. 260

C. 259740

D. 1000
602. If a group of countries abolish trade barriers between them and set same tariffs on goods coming in from other countries they are a ?
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A. free trade area

B. customs union

C. common market

D. federation

603. _______ is needed to balancell the balance of payments statements?
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A. statistical discrepancy

B. debit transactions

C. credit transactions

D. unilateral transfers

604. Tariffs are used to protect infant industries these industries are those which ?
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A. are not yet large enough to achieve economies of scale

B. use a new technology

C. are competing with well-established overseas firms

D. employ many young or untrained workers

605. If desired spending in the economy exceeds income we would expect ?
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A. households to save more

B. firms to produce less

C. the MPC to change

D. firms to produce more
606. Which of the following country was not a major LDC debtor in 2001 ?
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A. Malaysia

B. Thailand

C. Argentina

D. Brazil

607. Major trading partners of the United States including all of the following countries except ?
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A. Canada

B. China

C. North Korea

D. Mexico

608. In an economy measuring (1) total value added (2)total spending on final goods and (3)total factor earning gives the result that ?
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A. 3=2=1

B. any measure can be larger or smaller than any other

C. 3<2<1

D. 3>2>1

609. Term of trade for a country are the ratio of _______________ to _____________?
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A. Value of exports; value of imports

B. its opportunity costs; world opportunity costs

C. export prices; import prices

D. its currency; other currencies

610. International trade in goods and services is sometimes used as a substitute for all of the following except ?
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A. International movements of labor

B. Domestic production of different goods and services

C. International movements of technology

D. International movements of capital

611. The total multiplier for the economy will reflect ?
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A. MPC and MPT

B. MPC, MPT and MPZ

C. MPT and MPZ

D. MPC and MPZ

612. All of the following are debit items in the balance of payments except ?
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A. capital outflows

B. merchandise exports

C. foreign aid granted to other nations

D. private gifts to foreigners

613. Import substitution is the replacement of ____ by domestic production _____ protection of ________?
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A. imports, high tariffs or import quotas

B. exports, patents

C. imports, subsidies

D. exports, subsidies

614. The Phillips curve is an extension of the model of aggregate supply and aggregate demand because, in the short run, an increase in aggregate demand increase price and ?
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A. increases unemployment

B. decreases unemployment

C. decrease growth

D. decreases inflation

615. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the long run ?
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A. Output and the price level are unchanged from their initial values

B. Output falls; prices are unchanged from the initial value

C. Price fall; output is unchanged from its initial value

D. Prices rise; output is unchanged from its initial value
616. To prevent the external value of the currency from falling the government might ?
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A. Increase its own spending

B. Sell its own currency

C. Reduce interest rates

D. Buy its own currency with foreign reserves
617. when the level of income _________ there will be a tendency for the trade balance to improve as imports?
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A. falls, increase

B. falls, fall

C. increase, fall

D. increase, increase

618. Real GNP is a crude measure of national welfare because it excludes ?
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A. exports

B. work in the home

C. investment

D. consumption

619. Economists suggest that an optimum tariff would be one which reduce imports to a point where___________?
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A. import prices are the same as export prices

B. Comparative advantage is achieved

C. marginal social cost equals marginal social benefit

D. Price elasticity of imports is unity and tariff revenue is maximized

620. One of the main advantages of trade economists suggest is ?
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A. technological change

B. development of tourism

C. competitions with foreign suppliers

D. lower tariffs

621. The length of a business cycle would be measured from ?
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A. trough to peak

B. peak to peak

C. the slump to the expansion

D. peak to trough

622. If a nation has an open economy it means that the nation ?
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A. conducts trade with other countries

B. Has fixed exchange rates

C. Allows private ownership of capital

D. Has flexible exchange rates

623. Injection into the circular flow are ______ and __________?
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A. investment government expenditure exports

B. taxes exports, transfer payments

C. investment exports transfer payments

D. consumption investment exports

624. For the first time since World War I, in the mid-1980s the United States became a net international ?
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A. exporter

B. creditor

C. importer

D. debtor
625. The Paasche index uses _________ weights?
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A. base-year

B. Purchasing Power Parity (PPP)

C. fisher-ideal index

D. current-year
626. Which of the following country did not experience large capital flights from 1976 to 1984 ?
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A. Argentina

B. Canada

C. Mexico

D. Venezuela

627. Criticisms of Rostows stages of development include ?
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A. All of the above are correct

B. conditions for takeoff are contradicted by historical evidence

C. the difficulty of testing the stages scientifically

D. characteristics of one stage are not unique to that stage

628. Total injection are made up of?
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A. savings + government expenditure + exports

B. investment + government expenditure + exports

C. investment + tax + exports

D. investment + government expenditure + imports

629. For given government spending and taxation the government budget deficit will grow in _________ and decline in __________?
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A. recessions, booms

B. booms, recessions

C. recession, recession

D. booms, booms

630. Suppose the price level falls but suppliers only notice that the price of their particular product has fallen Thinking there has been a fall in the relative price of their product they cut back on production, This is a demonstration of the ?
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A. classical dichotomy theory of the short run aggregate supply curve

B. misperceptions theory of the short run aggregate supply curve

C. sticky wage theory of the short run aggregate supply curve

D. sticky price theory of the short run aggregate supply curve

631. The essential difference between capitalism and socialism is that ?
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A. capitalism exploits the worker and socialism exploits the property owner

B. capitalism relies on consumer satisfaction to dictate choices and socialism relies on producer satisfaction

C. capitalism relies on the market to make economic decisions and socialism uses central planning

D. capitalism grows through rent seeking and socialism grows through government direction

632. The natural rate hypothesis argues that ?
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A. in the long run the unemployment rate returns to the natural rate, regardless of inflation

B. Unemployment is always below the natural rate

C. Unemployment is always above the natural rate

D. Unemployment is always equal to the natural rate

633. The Vicious circle theory states that ?
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A. low income levels create pressure for cheap imports

B. low per capita incomes creates low savings that keep incomes low

C. low income levels create pressure for money creation

D. growing government assistance create addiction to welfare programs

634. PPP is ?
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A. a theory that tells us that exchanged rates between currencies are in equilibrium when their purchasing power is the same in both countries

B. GDP divided by exchange rate

C. a measure of income inequality

D. a measure of infant mortality in developing countries

635. Which of the following statements is true regarding the long-run aggregate supply curve? The long-run aggregate supply cruve ?
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A. shifts right when the government raises the minimum wage

B. shifts left when the natural rate of unemployment falls

C. is positively sloped because price expectations and wages tend to be fixed is the long run

D. Is vertical because an equal change in all prices and wages leaves output unaffected
636. Refer to Exhibit 6. Suppose the economy is Operating in long-run equilibrium at point E. In the long run a monetary contraction will move the economy in the direction of point ?
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A. F

B. I

C. H

D. a

637. Recent pressures for protectionism in the United States have been motivated by all of the following except ?
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A. High profit levels for American corporations

B. U.S firms shipping component production overseas

C. High unemployment rates among America workers

D. Sluggish rates of productivity growth in the United States

638. Tuvalu is composed of 9 coral atolls along a 360-mile chain in Polynesia They gained independence in 1978 The former Ellice Island are home to 9,700 people if GNP of Tuvalu is $300 million in 2005 GNP per capital is ?
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A. 9700 (1978 / 2005)

B. 300 000 000 / 9700

C. 32.333

D. 300 / 360

639. The underground economy consists of ?
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A. legal transactions not declared for tax and illegal activities

B. the water distribution system

C. part of the rail network

D. legal transactions

640. Shortly after 1979 World Bank introduced loans that emphasized reforms in trade, agriculture industry public enterprise financial energy education or other sectors and were know as ?
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A. sectoral adjustment loans

B. external leverage loans

C. Structural adjustment loans

D. internal adjustment loans

641. Which American industry has least been affected by import competition in recent years ?
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A. Automobiles

B. Radios and TVs

C. Steel

D. Computer software
642. It has become conventional classify a recession as a period where national output falls for _________ or more?
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A. two years

B. three years

C. a year

D. six months
643. If the government increases spending and raises taxes by just enough to finance this increase it will ?
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A. leave output unchanged

B. increase output

C. reduce output

D. increase the MPC

644. Arguments for free trade are sometimes disregarded by politicians because ?
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A. There exist sound economic reasons for keeping ones economy isolated from other economies

B. Maximizing consumer welfare may not be a chief priority

C. Economists tend to favor high protected domestic markets

D. Maximizing domestic efficiency is not considered imports

645. Which of the following is not an argument for protectionism ?
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A. To protect infant industries

B. To improve the balance of payments

C. To Protect strategic industries

D. To increase the level of imports
646. All of the following are credit items in the balance of payments except ?
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A. private gives to foreign residents

B. investment inflows

C. payments for American services to foreigners

D. merchandise exports

647. The debt-service ratio is the______________?
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A. interest and principle payments divided by exports of goods and services

B. ratio of debt net of portfolio investment financing and foreign direct investment

C. long-term debt divided by GDP of a country in a given year

D. default and reschedule debt minus annual export revenues that must be devoted to paying interest

648. International specialization takes place because of______________?
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A. scale economies

B. differences in technology

C. differences in factor endowments

D. All of the above
649. Starting from a balanced budget, for a given tax rate, an increasing in income will cause the government budget to ?
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A. None of the above above

B. remain unchanged

C. move into deficit

D. move into surplus
650. The main cause of different relative costs between countries are ?
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A. relative factor competition

B. relative factor substitution

C. relative factor endowments

D. relative factor mobility