economics MCQs – Page 235

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 Review each marked answer and report any item that may be outdated or unclear.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

4681. Positive statements are ?
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A. Macroeconomic

B. Microeconomics

C. statements of description that can be tested

D. Statements of prescription that involve value judgments.

4682. Which of the following statements regarding the circular-flow diagram is true ?
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A. If BAe Systems sells a military aircraft, the transaction takes place in the market for factors for production

B. None of these

C. The factors of production are owned by households

D. If Susan works for BAe Systems and receives a salary payment, the transaction takes place in the market for good and services.

4683. Which of the following is not a factor of production ?
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A. capital

B. land

C. labor

D. money

4684. Economic growth is depicted by ?
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A. a movement from inside the curve toward the curve.

B. a movement along a production possibilities frontier toward capital goods.

C. a shift in the production possibilities frontier inward

D. a shift in the production possibilities frontier outward.

4685. Which of the following will not shift a countrys production possibilities frontier outward ?
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A. an advance in technology

B. a reduction in unemployment

C. an increase in the capital stock

D. an increase in the labor force

4686. Which of the following statements is normative ?
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A. People work harder if the wage is higher

B. Printing too much money causes inflation

C. The unemployment rate should be lower

D. Large government deficits cause an economy to grow more slowly

4687. Points on the production possibilities frontier are ?
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A. normative

B. unattainable

C. inefficient

D. efficient

4688. In which of the following cases is the assumption most reasonable ?
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A. To model the benefits of trade. an economist assumes that there are two people and two goods

B. To address the impact of money growth on inflation, an economist assumes that money is strictly coins.

C. To address the impact to taxes on income distribution an economist assumes that everyone earns the same income.

D. To estimate the speed at which a beach ball falls, a physicist assumes that if falls in a vacuum.

4689. Economic models are ?
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A. created to duplicate reality.

B. useless if they are simple.

C. Usually made of wood and plastic

D. built with assumptions.

4690. Which of the following issues is related to microeconomics ?
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A. The impact of the deficit on saving

B. the impact of oil prices on car production

C. The impact of money on inflation

D. The impact of technology on economics growth

4691. Which of the following is most likely to produce scientific evidence about a theory ?
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A. An economist employed by the Trades union congress doing research on the impact of trade policy on workers wages

B. An economist permanently employed at a leading university analyzing the impact of bank regulations on lending to small businesses

C. A radio talk show host collecting data from listeners on how capital markets respond to taxation

D. A lawyer employed by Renault addressing the impact of air bags on passenger safety.

4692. Which of the following statements about microeconomics and macroeconomics is not true ?
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A. Microeconomics is a building block for macroeconomics

B. Macroeconomics is concerned with economy-wide phenomena

C. Microeconomics and macroeconomics cannot be entirely separated

D. The study of very large industries is a topic within macroeconomics

4693. Which of the following would not cause a shift in the long-run aggregate supply curve ?
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A. An increase in the available capital

B. An increase in the available labour

C. All of these answers shift the long-run aggregate supply curve

D. An increase in price expectations

4694. 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 short run ?
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A. Price rise; output rise

B. Price rise; output fall

C. Price fall; output falls

D. Price fall; output rises

4695. 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

4696. Suppose the economy is initially is long run equilibrium Then suppose there is a drought that destroys much of the wheat crop According to the model of aggregate demand and aggregate supply, what happens of prices and output in the short run ?
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A. Price fall; output falls

B. Price rise; output rises

C. Price rise; output falls

D. Price fall; output rises

4697. Policy makers are said to accommodate an adverse supply shock if they ?
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A. fail to respond to the adverse supply shock and allow the economy to adjust on its own.

B. respond to the adverse supply shock by decreasing aggregate demand which lower prices

C. respond to the adverse supply shock by increasing aggregate demand, which further raises prices

D. respond to the adverse supply shock by decreasing short run aggregate supply

4698. The natural rate of output is the amount of real GDP produced ?
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A. When the economy is at the natural rate of aggregate demand

B. When there is no no unemployment

C. When the economy is at the natural rate of investment

D. When the economy is at the natural rate of unemployment

4699. Stagflation occurs when the economy experiences ?
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A. falling prices and falling output

B. falling prices and rising output

C. rising prices and falling output

D. rising prices and rising output

4700. According to the model of aggregate supply and aggregate demand in the long run an increase in the money supply should cause ?
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A. Prices to rise and output to rise

B. prices to rise and output to remain unchanged

C. Price to fall and output to remain unchanged

D. Prices to fall and output to fall

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