economics MCQs – Page 130

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 Review each marked answer and report any item that may be outdated or unclear.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

2581. The relative price (MRT) of T in terms of S is ?
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A. 2-Jan

B. 2

C. 1000

D. 500

2582. According to the Coase theorem, private parties can solve the problem of externalities if ?
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A. There are a large number of affected parties.

B. there are no transaction costs.

C. the party affected by the externality has the initial property right to be left alone.

D. each affected party has equal power in the negotiations.

E. the government requires them to negotiate with each other

2583. The negative effect on the economy that occurs when average tax rates increase because taxpayers have moved into higher income brackets during an expansion is ?
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A. fiscal drag

B. the Laffer curves

C. bracket creep

D. debt burden

2584. To internalize a negative externality an appropriate public policy response would be to ?
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A. have the government take over the production of the good causing the externality

B. tax the good

C. subsidize the good

D. ban the production of all goods creating negative externalities

2585. Empirical evidence regarding in the effects of currency depreciation on the balance of trade indicates that?
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A. no strong generalization is possible

B. depreciation has no effect on the trade balance

C. depreciation generally hurts the trade balance

D. depreciation generally improves the trade balance

2586. Suppose that Boeing is to receive payment in euros in 6 month and wants to engage in hedging the firm would _______ euros on the 6-month forward market in order to protect itself from a/an of the euro?
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A. buy; depreciation

B. sell; appreciation

C. buy; appreciation

D. sell; depreciation

2587. Which example of market expectations causes the dollar to appreciate against the yen expectations that the U.S economy will have ?
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A. higher inflation rates than japan

B. more rapid money supply growth than japan

C. higher future interest rates than Japan

D. faster economic growth than Japan

2588. According to William Baumol under oligopolistic competition among large, high tech business firms. innovation has ?
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A. limited the expansion of firms

B. maintained the relationship between firms and their clients

C. replaced price as the important

D. created stationary economies of scale

2589. Country B has an absolute advantage in ?
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A. Product X

B. Product Y

C. Neither X nor Y

D. Both X and Y

2590. Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored) ?
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A. tradable pollution permits command-and-control policies, Pigovian taxes.

B. tradable pollution permits, Pigouvian taxes, command-and-control policies

C. command-and-control policies, tradable pollution permits, Pigovian taxes.

D. Pigouvian taxes, command-and-control policies, tradable pollution permits.

E. They would all rank equally high because the same result can be obtained from any one of the policies

2591. Which country is not a transitional economy ?
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A. Mexico

B. Russia

C. china

D. Hungary

2592. If Hong Kong and Taiwan have identical production possibilities curves that are subject to increasing opportunity costs ?
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A. Trade would depend on difference in demand conditions

B. Trade would depend on the use of different currencies

C. Trade would depend on economies of large-scale production

D. There would be no basis for gainful trade

2593. Which of the following countries are not newly industrialized countries (NICs) ?
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A. Singapore

B. North Korea

C. Taiwan

D. Hong kong

2594. Given free trade, small nations tend to benefit the most from trade since they ?
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A. Realize terms of trade lying near the MRTs of their large trading partners

B. Are more productive than their large trading partners

C. Are less productive than their large trading partners

D. Have demand preferences and income levels lower than their large trading partners

2595. The essential feature of a _______ is that it immediately fixed the rate at which a specified amount of one currency is to be delivered in exchange for a specific amount of another at a future date ?
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A. money contract

B. spot contract

C. bid contract

D. forward contract

2596. Imagine there is no tax on income up to Rs 1000 after that there is a tax of 505 what is the average tax rate on an income of Rs 20,000 ?
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A. Rs 10000

B. Rs 50000

C. 20%

D. 25%

2597. Speculators in foreign exchange markets do all of the following except ?
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A. attempt to buy currency at a low price and later resell that currency at a higher price

B. bear risk as they attempt to ____ beat the market||

C. Simultaneously buy a currency at a low price and sell that currency at a higher price, making a riskless profit

D. attempt to profit by trading on expectations about future currency prices

2598. Many developing countries instituted import substitution policies because ?
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A. the price of goods they exported were increasing

B. their terms of trade were improving

C. their terms of trade were deteriorating

D. the prices of the goods they imported were falling

2599. Why has the growth of the German and Japanese economies after World War|| not been repeated in LDCs ?
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A. low interest rates

B. human capital or technical skills were lacking

C. real domestic currency depreciation exists

D. political instability inhibits world-wide investment

2600. Effective branding will tend to make ?
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A. Supply more income elastic

B. Demand more income elastic

C. Demand more price inelastic

D. Supply more price inelastic

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