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
7801. Evidence suggests that the price elasticity of demand for motoring is ?
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A. absolutely inelastic

B. inelastic

C. Unitarily elastic

D. Elastic

7802. Sales staff are keen to sell extended warranties because ?
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A. they are paid commission on each extended warranty they sell.

B. the cost of repair will usually exceed the cost of the warranty

C. They are concerned about customer satisfaction.

D. extended warranties offer value for money.

7803. Supporters of antimonopoly enforcement argue that the real gain from such enforcement ?
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A. is that it forces firms to produce efficiently.

B. is that if encourages firms to engage in research which leads to new products

C. is the revenue generated from the fines paid by those individuals who are found guilty of antitrust violation?

D. Is that this policy serves to deter firms from engaging in such practices as collusion, price-fixing and deceptive advertising
7804. Economists use the term regulatory capture to mean a situation where the private sector firms being regulated ?
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A. Persuade the government to change the regulatory regime.

B. Persuade the regulator to act in the firms interests.

C. Persuade the regulator to operate in the industrys interests

D. Bribe the regulator.

7805. A horizontal merger is a merger of?
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A. firms producing the same product

B. firms producing complementary products

C. firms producing unrelated products

D. firms at various stages in a production process.

7806. The theory of the second best suggests that in the absence of perfect competition a privatized industry should charge a price of ?
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A. p = Z

B. p = MC

C. P = MC Z

D. P = MC + Z
7807. In the country X it is now becoming possible to buy electricity from a gas company and gas from an electricity company. This is called ?
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A. natural monopoly.

B. cross-subsidization.

C. deregulation

D. making markets contestable
7808. A merger in which firms at various stages in a production process combine is a ?
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A. horizontal merger

B. vertical merger

C. production merger

D. conglomerate merger.

7809. A firm charging different buyers different prices for the same product is practicing ?
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A. price fixing.

B. Price discrimination

C. price discounting.

D. Competitive pricing.

7810. Antimonopoly legislation is undertaken to ____ competition and market regulation is undertaken to ____ competition ?
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A. restrict; promote

B. promote; promote

C. restrict; restrict

D. promote; restrict
7811. Between 1990 and 1999 car ownership per thousand of the population fell in ?
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A. Belgium

B. USA

C. Spain

D. UK

7812. Antimonopoly laws are based on the proposition that ?
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A. competition is the best way to achieve efficiency.

B. increasing market power is the best way to achieve efficiency.

C. public ownership is the best way to achieve efficiency

D. regulation is the best way to achieve efficiency.

7813. Spending on motoring as a % of household expenditure in the UK shows that motoring is ?
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A. a potential public good

B. a superior good

C. an inferior good

D. Environmentally damaging

7814. Which city has the following transport policy ?
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A. Singapore

B. London

C. Car licenses are very expensive vehicle entry to the city center is very restricted road pricing is being introduced and modern cheap rail transport is being expanded.

D. New York

E. Athens

7815. A merger between a paper producer and a book publisher is an example of?
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A. a complementary products merger.

B. a horizontal merger

C. a conglomerate merger.

D. a vertical merger
7816. A combined measure of productivity that takes account of both labor and capital productivity is known as ?
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A. labour/capital productivity

B. total productivity

C. total exploitation

D. total factor productivity
7817. The growth rates of economies tend to converge because ________ is easier when capital per worker is low and because of?
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A. capital-widening technical innovation

B. capital-deepening, catch-up in technology

C. capital-deepening technical innovation

D. capital-widening Catch-up in technology

7818. The multiplier accelerator model assumes ____ depends on ______?
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A. investment, interest rates

B. consumption expected future profits

C. stock building interest rates

D. investment expected future profits
7819. The growth path resulting from technological progress for a given saving rate is known as the ?
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A. Steady state invention rate

B. Steady state level of output

C. Steady state growth path

D. teady state growth path

7820. The business cycle describes fluctuations in output around the?
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A. short-run fluctuations in output

B. boom

C. recession

D. trend path of output
7821. Real business cycle theory suggests that ____ not important in explaining short-term fluctuations around actual output ?
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A. aggregate demand is

B. potential output is

C. aggregate supply is

D. real variables are

7822. Real business cycle theories suggest that _____ to correct departures from the desired growth path?
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A. There is a role for stabilizing output ever the business cycle

B. There is a role for supply-side policy

C. There is a role for monetary policy

D. There is a role for fiscal policy

7823. Supply side policies are considered effective in ?
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A. increasing the money supply

B. reducing taxation

C. encouraging technological progress

D. Increasing government expenditure

7824. The impossibility of negative gross investment provides a ______ to fluctuation in ______?
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A. floor, output

B. ceiling, stock building

C. floor, the capital-output ratio

D. ceiling, capital prices

7825. The belief that the rate of growth depends upon technological progress facilitated by institutions incentives and government is known as ________ growth theory?
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A. beta

B. endogenous

C. convergence

D. exogenous

7826. The percentage of the working age population that is part of the workforce is known as the ?
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A. participation rate

B. workers

C. diligent rate

D. non-slackers

7827. In the neoclassical theory of growth a higher saving rate leads to ?
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A. no change in the growth rate

B. a higher growth rates

C. a fluctuating growth rates

D. a fluctuating growth rate

7828. Identify below what does NOT affect productivity ?
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A. Private investment in new physical caital

B. The phase of the lunar cycle

C. Public investment in education

D. Innovation and the application of new technology

7829. Economic growth may depend upon _____ and _____?
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A. Population age distribution, education

B. Population size, x-efficiency

C. Population growth education

D. Population growth technical progress
7830. Policies to encourage productivity do not include ?
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A. encouraging risk-taking

B. encouraging R & D

C. encouraging innovation

D. building more retail outlets
7831. The best way to achieve economic growth is to ?
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A. increase government spending

B. reduce taxation

C. increase personal consumption

D. save more
7832. Governments can stimulate productivity by ?
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A. encouraging private investment

B. encouraging more labour intensive work to reduce unemployment

C. Imposing higher taxes on capital

D. reducing spending in education

7833. The neoclassical theory of growth identifier the steady state rate of growth as the ____ just sufficient to keep _____ constant while labor grows?
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A. labor growth, output

B. investment capital per person

C. saving, investment

D. capital per person, productivity

7834. The business cycle is not transmitted from one country to another through ?
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A. labor supply changes

B. private sector imports and exports

C. economic policy

D. the duration of compulsory education
7835. GDP per head may be an imperfect measure of economic welfare because it excludes ?
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A. Externalities

B. Change in the distribution of income

C. All of the above

D. Untraded goods

E. the value of leisure

7836. Potential output can be increased by ____ or by ______?
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A. increasing the use of all inputs, technical advances

B. increasing the use of labor increasing the use of land

C. increasing the use of land increasing the use of capital

D. increasing the use of capital increasing the use of labour

7837. The long run equilibrium level of national income is the level at which ?
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A. All investment is used in the manufacturing sector

B. economic growth is Zero

C. All investment is used to maintain the existing capital stock at its current level

D. Economic growth is growing

7838. Identify below what is NOT considered to be a cause of economic growth ?
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A. An increase in labor productivity

B. An increase in the money supply

C. An increase in technology

D. An increase in the quantity of labor and capital

7839. The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the ?
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A. multiplier accelerator model

B. sun spot theory

C. Solow theory

D. New classical theory

7840. Real business cycles are cycles in ?
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A. real output

B. international trade

C. actual output

D. potential output
7841. The golden-rule saving rate is the rate of saving that ?
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A. maximizes the level of long-run consumption

B. maximizes the level of long-run investment

C. gets the highest rate of interest

D. maximizes human capital

7842. All of the following are parts of the business cycle except ?
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A. boom

B. recovery

C. slump

D. acceleration
7843. Economic growth is important because ?
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A. People want a better environment

B. People want higher incomes and more consumer goods.

C. People want to be happier

D. People want less crime

7844. Real business cycle theorists argue that _________ can explain short- and long-term fluctuation in output?
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A. sun spot cycles

B. imperfect labor markets

C. intertertemporal decisions of households, firms and government

D. rational expectations

7845. The idea of convergence of GDP in Europe suggests that ?
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A. Poorer less developed countries will catch up with richer ones.

B. Poorer countries have higher capital/labour ratios than richer countries.

C. The gap between countries GDP per head will widen

D. All countries will eventually join the EEC

7846. Tradable pollution permits ?
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A. Set the quantity of pollution

B. determine the demand for pollution rights.

C. set the price of pollution.

D. reduce the incentive for technological innovations to further reduce pollution.

7847. The most efficient pollution control system would ensure that ?
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A. the polluters with the lowest cost of reducing pollution reduce their pollution the greatest amount

B. no pollution of the environment is tolerated

C. the regulators decide how much each polluter should reduce its pollution.

D. each polluter reduces its pollution an equal amount

7848. According to the Coase theorem, private parties can solve the problem of externalities if ?
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A. the party affected by the externality has the initial property right to be left alone.

B. there are no transaction costs.

C. the government requires them to negotiate with each other

D. There are a large number of affected parties.

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

7849. To internalize a positive externality an appropriate public policy response would be to ?
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A. tax the good

B. subsidize the good

C. have the government produce the good until the value of an additional unit is zero

D. ban the good creating the externality

7850. Which of the following is not considered a transaction cost incurred by parties in the process of contracting to eliminate a pollution externality ?
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A. costs incurred due to a large number of parties affected by the externality

B. costs incurred to enforce the agreement

C. All of these answers are considered transaction costs

D. costs incurred due to lawyers fees

E. costs incurred to reduce the pollution