economics MCQs – Page 254

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 Review each marked answer and report any item that may be outdated or unclear.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 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
5061. A group of modern economists who believe that institutional factors and confidence strongly influence business behaviour and that expanding demand will usually increase output rather than prices are the ?
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A. monetarists.

B. keynesians

C. new classical school

D. post-keynesians
5062. The quantity theory of money implies that a given percentage change in the money supply will cause ?
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A. a larger percentage change in nominal GDP

B. a smaller percentage change in nominal

C. an equal percentage change in nominal DGP.

D. an equal percentage change in real GDP

5063. A group of modern economists who believe that markets clear very rapidly and that expanding the money supply will always increase prices rather than employment are the ?
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A. Keynesians

B. monetarists

C. post-keynesians

D. new classical school
5064. New classical theories were an attempt to explain ?
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A. the stagflation of the 1970s

B. how unemployment could have persisted for so long during the Great Depression

C. The increase in the growth rate of real output in the 1950s

D. Why policy changes that are perceived as permanent have more of an impact on a persons behaviour than policy changes that are viewed as temporary.

5065. If the demand for money depends on the interest rate the velocity of circulation is ?
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A. not constant and the quantity theory of money does not hold.

B. not constant and the quantity theory of money does hold.

C. constant and the quantity theory of money does hold.

D. constant and the quantity theory of money does not hold.

5066. It is difficult to determine if the velocity of money is constant over time because ?
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A. whether velocity is constant or not may depend on how the money supply is measure.

B. it is difficult to measure the value of nominal GDP over time

C. it is difficult to measure the demand for money over time

D. there has been very little fluctuation in the money supply over time.

5067. Keynesian economics became popular because it was able to explain ?
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A. The prolonged existence of high unemployment during the Great depression

B. stagflation in the late 1970s

C. demand-pull inflation in the 1960s

D. low growth rates in the 1950s

5068. According of Keynes, the level of employment is determined by ?
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A. the behaviour of trade unions.

B. the level of aggregate demand for goods and services

C. price and wages

D. the quantity of money

5069. The nation that the government can establish the macroeconomic is known as ?
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A. monestarism

B. the classical model

C. microeconomics foundations of macroeconomics

D. fine tuning
5070. The regarding the new classical macroeconomics is hoe realistic is the assumption ?
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A. that fiscal policy affects aggregate demand

B. of rational expectations.

C. that monetary policy affects aggregates demand

D. that markets do not clear quickly

5071. The hypothesis that people know the true model of the economy and that they use this model to form their expectations of the future is the ?
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A. adaptive expectations hypothesis

B. Passive-expectations hypothesis

C. Rational-expectations hypothesis

D. lagged-expectations hypothesis.

5072. Prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded are ?
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A. sticky prices

B. market prices

C. fixed prices

D. regulatory prices

5073. According to the classical economists the economy ?
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A. requires fine tuning to reach full employment

B. can never deviate from full employment

C. will never be at full employment

D. is self-correcting.
5074. Rapid increase in the price level during periods of recession of high unemployment are known as ?
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A. slump

B. stagnation

C. inflation

D. stagflation
5075. The rational-expectation hypothesis suggests that the forecasts that people make concerning future inflation rates ?
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A. consistently overestimate the actual rate of inflation in the future.

B. are correct on average, but are subject to errors that are distributed randomly

C. are always correct

D. consistently underestimate the actual rate of inflation in the future

5076. The economists who emphasised wage flexibility as a solution for unemployment were ?
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A. post-Keynesian.

B. classical economists.

C. new-Keynesian.

D. Keynesian.

5077. The government increase government spending to try to reduce unemployment This is an example of ?
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A. automatic stablisers

B. fine tuning

C. monetary policy

D. laissez-faire.

5078. People are said to have rational expectations if they ?
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A. merely guess at the inflation rate.

B. assume that this years inflation rate will be the same as last years inflation rate

C. Use all available information in forming their expectations.

D. assume that this years inflation rate will be equal to the average inflation rate over the past 10 years

5079. A competitive profit-maximizing firm should hire workers up to the point where ?
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A. the marginal product of labor equals the wage

B. the wage, the rental price of capital and the rental price of land are all equal

C. the marginal product of labor equals zero and the production function is maximized

D. the value of the marginal product of labor equals the wage
5080. What will a decrease in the supply of fishermen do to the market for capital employed in the fishing industry ?
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A. decreases the demand for fishing boats and increase rental rates on fishing boats.

B. increase the demand for fishing boats and decrease rental rates on fishing boats

C. decreases the value of the marginal product of fishermen, reduces their wage, and increases employment in the fishing industry

D. increase the demand for fishing boats and increase rental rates on fishing boats