economics MCQs – Page 257

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 Review each marked answer and report any item that may be outdated or unclear.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

5121. Concerning dumping, which of the following is true ?
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A. U.S firms can obtain protection from foreign dumping, even though this protection tends to harm overall U.S welfare

B. dumping can never be a profit-maximizing strategy for U.S firms to pursue

C. predatory dumping represents the most common form of dumping by U.S firms

D. U.S firms rarely if ever, engage in distress dumping or persistent dumping

5122. ________ are quotas that result in a total prohibition of trade?
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A. embargoes

B. tariff-rate quotas

C. voluntary export restraints

D. nontariff barriers

5123. According to the United States ____ is the number one violator of intellectual property rights
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A. Australia

B. China

C. Canada

D. Japan

5124. Countervailing duties levied by the U.S government are imposed to offset ?
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A. foreign dumping of goods in the U.S

B. buy national policies of foreign government

C. stringent environmental regulations of foreign government s

D. subsidies granted to foreign firms that export to the U.S

5125. The effect of the most favored nation (normal trade relations) clause is to ?
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A. maintain a nondiscriminatory structure of tariffs

B. increase all tariffs between countries

C. maintain a discriminatory structure of tariffs

D. eliminate all tariffs between countries

5126. The World Trade Organization is sometimes criticized for all of the following reasons except?
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A. it has no way to solve trade disputes among member countries

B. it is a puppet of multinational corporations

C. favors free trade over the quality of the environment

D. it reduces the sovereignty of member countries

5127. Concerning economic sanctions, export embargo induces greater losses in consumer surplus for the target country the?
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A. more elastic the target country demand schedule

B. more in elastic the target country supply scheduleB.

C. greater then available output from alternative suppliers

D. lesser it initial dependence on foreign produce goods.

5128. The U.S has granted China permanent most favored nation treatment (normal trade relations) This means that the tariff schedules which apply to U.S imports from china ?
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A. have tariff rates that are identical to the rates that apply to other countries to which the U.S grants most-favored nation treatment

B. have tariff rates equal to zero suggesting a free trade policy for the United States

C. have lower tariff rates than the rates that apply to any other country sending goods to the United States

D. have lower tariff rates than the rates that apply to other countries to which the U.S grants most favored nation treatment

5129. Those who argue in favor of import protection generally give the impression that such restricted trade will?
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A. provide benefits to some particular industry

B. decrease the level of national security

C. provide benefits to the entire nation

D. not yield welfare losses for the nation

5130. The institutional framework developed in 1947 to promote trade liberalization is known sa?
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A. the WTO

B. the IMF

C. the World Bank

D. the GATT

5131. The theory of suggests that government can assist domestic companies in capturing economic profits from foreign competitors ?
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A. Strategic trade policy

B. export promotion policy

C. international dumping

D. countervailing duties

5132. In 1980 the U.S imposed export quotas on grain sold to the Soviet Union in response to its armed invasion of Afghanistan if other nations do not increase grain exports to the soviets all the following would likely occur except?
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A. Export revenues would decrease for U.S producers

B. Consumer surplus would decrease for the soviets

C. Grain prices would rise in the Soviet union

D. Grains prices would rise in the united States

5133. The strongest political pressure for a trade policy that results in higher protectionism comes from?
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A. domestic workers lobbying for export restrictions

B. domestic consumers lobbying for export restrictions

C. domestic workers lobbying for import restriction

D. domestic consumers lobbying for import restrictions

5134. Economic sanctions?
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A. are prohibited by the World Trade Organization

B. affect international trade but not international financial flows

C. involve restrictions on imports, but not exports

D. involve restrictions in imports exports and or financial flows

5135. If two countries A and B are member of a currency union and there is a shift in consumer preferences away from the goods of country A and towards those of country B than which one of the following would help to offset the effect of the resulting changes in aggregate demand in A and B on inflation and unemployment in the tow countries ?
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A. An increase in government spending in country (A)

B. A low degree of capital mobility between the two countries

C. A high degree of labour mobility between the tow countries

D. A depreciation in the foreign exchange value of the common currency

5136. Which one of the following is not a characteristic that reduces the cost of a signals currency ?
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A. A high degree of capital mobility among the countries of the common currency area

B. None of the characteristics described in these answers They are all characteristics that reduce the cost of a single currency

C. A high degree of trade integration among the countries of the common currency area

D. A high degree of labour mobility among the countries of the common currency area

5137. To try to overcome the free rider problem, the members of EMU signed ?
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A. the European solidarity packs

B. the exchange rate mechanism pact

C. the stability and growth pack

D. the responsibility and growth pack

5138. Which of the following could not be described as an asymmetric macroeconomic shock ?
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A. An epidemic of an animal disease in a country that significantly reduces the countrys agricultural output

B. A sudden and substantial fall in the worldwide demand for French wine

C. A sudden and substantial rise in prices on the world oil market

D. None of these answers All of them are asymmetric macroeconomic shocks

5139. Which of the following is a problem for monetary policy in a currency union ?
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A. The inflation-unemployment trade-off is more unstable in a currency union

B. Money supply is more difficult to control in a currency union.

C. All of these answers describe problems for monetary policy in a currency union

D. The interest rate may be higher than is appropriate for economic conditions in some countries while its lower than is appropriate in some others monetary policy must be one size fits all

5140. A high degree of real wage flexibility will tend to reduce the cost to a country of joining a currency union because ?
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A. real wages fall rapidly in a recession and the economy moves quickly back to long run equilibrium so limiting the duration of the recession even when exchange rate adjustment is not possible

B. All of the reasons given in these answers are correct

C. workers will move from a country in which aggregate demand falls to other countries of the currency union, and so unemployment remains lower than it otherwise would

D. real wages fall and so offset the inflationary effect of switching from the old currency to the new common currency

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