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
8351. A depreciation of the dollar will have its most pronounced impact on imports if the demand for imports is ?
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A. inelastic

B. Unitary elastic

C. constant

D. elastic
8352. The price of one countrys currency in terms of another countrys currency is the ?
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A. exchange rate

B. currency valuation

C. terms of trade

D. balance of trade

8353. 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. sell; appreciation

B. buy; depreciation

C. sell; depreciation

D. buy; appreciation

8354. If the exchange rate is 11 Mexican pesos per U.S dollar, then it takes _______ to buy 1 peso?
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A. $0.0909

B. $1.10

C. $0.28

D. $0.10

8355. Currency speculation is _____ if speculators bet against market forces that cause exchange fluctuations, thus moderating such fluctuations ?
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A. stabilizing

B. destabilizing

C. inflationary

D. deflationary

8356. 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. purchasing power parity theory

B. J-curve theory

C. price feedback theory

D. trade feedback theory

8357. If a nations interest rates are relatively low compared to those of other countries then the exchange value of its currency will tend to ?
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A. appreciate under a system of floating exchange rates

B. depreciate under a system of floating exchange rates

C. depreciate under a system of fixed exchange rates

D. appreciate under a system of floating fixed rates

8358. The franc is said to be selling at a _______ if the spot dollar price is $0.48 and the nine-month forward rate is $0.42 ?
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A. forward spread

B. forward discount

C. None of these

D. forward premium

8359. During the era of dollar appreciation from 1981 to 1985 a main reason why the dollar did not fall in value was ?
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A. rising price inflation in the United States

B. flows of foreign investment into the United States

C. a substantial increase in U.S exports

D. a substantial decrease in U.S imports

8360. In a supply and demand diagram for Japanese yen, with the exchange rate in dollars per yen on the vertical axis, the demand schedule for yen is drawn sloping ?
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A. horizontal

B. upward

C. vertical

D. downward
8361. If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ?
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A. as the money supply is decreased the interest rate will increase and the price of UK exports will rise and the Price of UK imports will fall

B. as the money supply is decreased the interest rate will increase, and the price of UK exports will fall and the price of UK imports will rise

C. as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall.

D. as the money supply is decreased the interest rate will increase and the price of both UK exports and UK imports will rise

8362. The rise in value of one currency relative to another is ?
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A. An appreciation of a currency

B. A depreciation of a currency

C. a weakening of a currency

D. a debasement of a currency

8363. The real effective exchange rate for the U.S dollar ?
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A. reflects only the influences of merchandise or real trade on the dollars exchange value

B. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners unadjusted for inflation?

C. reflects only transactions in the currency futures market

D. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners adjusted for inflation?
8364. Which financial instrument provides a buyer the right to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a couple of years ?
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A. foreign currency option

B. letter a credit

C. cable transfer

D. bill of exchange

8365. Investor engage in _____ when they move funds into foreign currencies in order to take advantage to interest rates abroad that are higher than domestic interest rates ?
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A. long positions

B. short positions

C. currency arbitrage

D. interest arbitrage
8366. Suppose there occurs an increase in the Canadian demand for Japanese computers This results in a (an) ?
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A. increase in the supply of yen

B. increase in the demand for yen

C. decrease in the Supply of yen

D. decrease in the demand for yen

8367. The least common type of transaction in the foreign exchange is a ?
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A. None of the above

B. spot transaction

C. forward transaction

D. swap transaction

8368. The fall in value of one currency relative to another is ?
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A. a floating of a currency

B. an appreciation of a currency

C. a strengthening of a currency

D. a depreciation of a currency
8369. The reduction or covering of foreign exchange risk is called ?
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A. speculation

B. hedging

C. arbitrage

D. intervention

8370. A difference between forward and futures contracts is that ?
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A. futures contracts have negotiable delivery dates

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

C. futures contracts involve no brokerage fees or other transactions costs

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

8371. In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _______ against European currencies?
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A. decrease; depreciate

B. increase; depreciate

C. decrease; appreciate

D. increase; appreciate
8372. Resources in an economy ?
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A. Are limited at any moment in time

B. Are always found

C. Can never decease

D. Always increase over time

8373. If marginal benefit is greater than marginal cost, a rational choice involves ?
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A. more of the activity

B. no more of the activity.

C. less of the activity

D. more or less, depending on the benefits of other activities

8374. The sacrifice involved when you choose a particular course of action is called the ?
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A. Alternative

B. Consumer cost

C. Producer cost

D. Opportunity cost
8375. The opportunity cost of a good is______________?
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A. the loss of interest in using savings

B. the time lost in finding it

C. the expenditure on the good

D. the quantity of other goods sacrificed to get another unit of that good
8376. Economics is the study of ?
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A. how society manages its unlimited resource

B. how to reduce our wants until we are satisfied.

C. how to avoid having to make trade-offs

D. how to fully satisfy our unlimited wants

8377. In a command (planned) economy ?
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A. The public sector is large

B. Individual firms make decisions for themselves about what to produce and how to produce it

C. The price mechanism acts as an incentive

D. Resources are allocated by market forces
8378. Unemployment means that ?
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A. at the going wage rate, there are people who want to work but cannot find work.

B. there are some people who will not work at the going wage rate.

C. people are not willing to work at the going wage rate.

D. there is excess demand in the labour market

8379. A student chooses to study because the marginal benefit is greater than the ______________ cost?
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A. total

B. marginal

C. expected

D. average

8380. In a free market?
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A. government intervenes

B. government interferes

C. Prices adjust to reconcile scarcity and desires

D. government plan production

8381. If the diagram of a line shows that lower values on the vertical scale are associated with higher values on the horizontal scale this is an example of ?
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A. a negative linear relationship

B. a nonlinear relationship

C. a scatter diagrams

D. a positive linear relationship

8382. The circular flow of goods and incomes shows the relationship between?
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A. Wages and salaries.

B. income and money

C. goods and services.

D. ms and households

8383. If a price increase of good A increases the quantity demanded of good B, then good B is a________________?
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A. inferior good

B. substitute good

C. complementary good

D. bargain

8384. Suppose you find Rs 20. If you choose to use the Rs 20 to go to a football match your opportunity cost of going to the game is ?
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A. nothing because you found the money.

B. Rs20 (because you could have used the Rs20 to buy other ghings)

C. Rs 20 (because you could have used the Rs 20 to buy other things) plus the value of your time spent at the game plus the cost of the dinner you purchased at the game.

D. Rs20 (because you found the money Rs 20 to buy other things) plus the value of your time spent at the game.

E. None of these

8385. Opportunity cost is_________________?
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A. the additional benefit of buying an additional unit of a product

B. a cost that cannot be avoided. regardless of what is done in the future

C. that which we forgo, or give up, when we make a choice or a decision.

D. the cost incurred in the past before we make a decision about what to do in the future.

8386. Workers in Western Europe enjoy a high standard of living because ?
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A. Unions in Western Europe keep the wage high

B. the countries of Western Europe have set high minimum wage rates.

C. none of these answers.

D. The countries of Western Europe have protected their industries from foreign corporation

E. Workers in the united states are highly productive

8387. An increase in the price of beef providers information which ?
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A. provides no information because prices in a market system are managed by planning boards.

B. tells producers to produce more beef.

C. tells consumers to buy less pork

D. tells consumers to buy more beef.

8388. You are planning to run a hot dog stand during a forthcoming fair. You originally estimated that you will generated sales revenue of Rs 2000 and you have already spent Rs 1000 building the hot dog stand. The hot dog stand is nearly completed but now you estimate total sales to be only Rs 800 because the fair clashes with a major music festival in a nearby location. You can complete the hot dog stand for another Rs 300 Your decision rule should be to complete the hot dog stand as long as the cost to complete the stand is less than ?
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A. Rs 800

B. Rs 500

C. Rs 1000

D. Rs 300

8389. Normative economics Forms ________ based on ________?
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A. positive statements values

B. positive statements, facts

C. opinions personal facts

D. opinions facts

8390. On a graph, a positive linear relationship___________________?
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A. moves up to the left

B. moves up to the right

C. moves down to the right

D. moves down to the left

8391. Which of the following is not part of the opportunity cost of going on holiday ?
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A. The money you could have made if you had stayed at home and worked

B. The money you spent on a theater show

C. the money you spent on food

D. The money you spend on airline tickets

8392. The free market involves ?
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A. All trade via barter

B. Market forces of supply and demand

C. The Subsidizing of products by the government

D. The free provision of products

8393. The basic economic problems will not be solved by ?
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A. Government intervention

B. The creation of unlimited resources

C. Market forces

D. A mixture of government intervention and the free market

8394. The concept of opportunity cost ?
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A. Would be relevant if we eliminated poverty

B. is relevant only for a capitalist economy like the United States.

C. Suggests a major increase in public health care spending means an expansion in other areas will be harder to achieve.

D. Suggests all our wants can be achieved.

8395. A supply curve is directly affected by ?
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A. technology

B. government regulation

C. input costs

D. all of the above
8396. An increase in consumer income will increase demand for a _________ but decrease demand for a?
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A. substitute good, inferior good

B. inferior good normal good

C. normal good inferior good

D. normal good, complementary good

8397. The Phillips curve shows that ?
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A. none of these

B. inflation and unemployment are unrelated in the short run.

C. a decrease in inflation temporarily increases unemployment.

D. an increase in inflation temporarily increases unemployment.

E. the business cycle has been eliminated

8398. Microeconomics is not concerned with the behavior of ?
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A. Consumers

B. firms

C. aggregate demand

D. industries.

8399. High and persistent inflation is caused by ?
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A. OPEC raising the price of oil too much

B. regulations raising the cost of production too much

C. governments increasing the quantity of money too much

D. unions increasing wages too much
8400. The equilibrium price clears the market it is the price at which _________________?
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A. Buyers spend all their money

B. Everything is sold

C. Excess demanded equals quantity

D. C and D

E. Quantity demanded equal quality supplied