economics MCQs – Page 258

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 Review each marked answer and report any item that may be outdated or unclear.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

5141. What is fiscal federalism ?
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A. A fiscal system for a group of countries in which fiscal policy is set in a treaty signed by all the countries

B. A fiscal system for a group of countries involving a common fiscal budget and a system of taxes and fiscal transfers across countries

C. A fiscal system in which fiscal policy is jointly determined by local and national politicians

D. A fiscal system for a group of countries in which government budget deficits are strictly limited

5142. How does the eurozone compare with USA as a possible optimal currency area (OCA) ?
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A. The eurozone has a lower degree of labour mobility than the USA and labour law is much less restrictive in the erozone than in the USA On these measures it is hard to judge whether the eurozone is more or less likely to be an OCA than is the USA

B. The eurozone has a lower degree of labour mobility than the USA and labour law is much more restrictive in the erozone than in the USA On these measures the eurozone is less likely to be an OCA than is the USA

C. The eurozone has a higher degree of labour mobility than the USA but labour law is much more restrictive in the erozone than in the USA On these measures it is hard to judge whether the eurozone is more or less likely to be an OCA than is the USA

D. The eurozone has a higher degree of labour mobility than the USA and labour law is much less restrictive in the erozone than in the USA On these measures the eurozone is more likely to be an OCA than is the USA

5143. Which one of the following is not an argument in support of the UK joining the EMU ?
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A. None of these arguments they are all arguments in support of the UK joining the UMU

B. The UK needs to be a member of the EMU in order to continue to attract such large share of foreign direct investment in EU countries

C. The characteristics of the UK housing market make UK consumers expenditure very sensitive to changes in interest rates

D. The UK risks exclusion from the Euroland capital market with damaging consequences with damaging

5144. Which of the following is a problem for fiscal policy in a currency union ?
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A. government of the member countries of the currency union may run large budget deficits and so impose costs on other countries by pushing up interest rates on the bonds these countries governments issue

B. It is difficult to raise enough tax revenue to pay for the operation of the currency union

C. Government of the member countries of the currency union may run large budget deficit and so crowd out private investment

D. The central bank controls interest rates on long-term bonds issued by the governments of the member countries of the currency union

5145. Under a pegged exchange rate system which does not explain why a country would have a balance of payments deficit ?
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A. very high rates of inflation occur domestically

B. the domestic currency is undervalued relative to other currencies

C. technological advance is superior abroad

D. foreigners discriminate against domestic products

5146. The exchange rate system that best characterizes the present international monetary arrangement used by industrialized countries is ?
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A. freely fluctuating exchange rates

B. managed floating exchange rates

C. pegged or fixed exchange rates

D. adjustable pegged exchange rates

5147. Which exchange rate system does not require monetary reserves for official exchange rate intervention ?
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A. dual exchange rates

B. pegged exchanged rates

C. floating exchange rates

D. managed floating exchange rates

5148. Which exchange rate system involves a leaning against the wind|| strategy in which short-term fluctuations in exchange rates are reduced without adhering to any particular exchange rate over the long run ?
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A. pegged of fixed exchange rates

B. adjustable pegged exchange rates

C. free floating exchange rates

D. managed floating exchange rates

5149. Small nations with more than one major trading partner tend to peg the value of their currencies to ?
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A. gold

B. a single currency

C. silver

D. a basket of currencies

5150. Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners ?
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A. U.S imports tend to rise, and exports tend to fall

B. U.S exports tend to rise, and imports tend to fall

C. U.S foreign exchange reserves tend to rise

D. U.S foreign exchange reserves remain constant

5151. Which exchange rate mechanism in intended to insulate the balance of payments from short-term capital movements while providing exchange rate stability for commercial transactions ?
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A. dual exchange rates

B. managed floating exchange rates

C. crawling pegged exchange rates

D. adjustable pegged exchange rates

5152. Small nations whose trade and financial relationships are mainly with a single partner tend to utilize ?
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A. managed floating exchange rates

B. crawling exchange rates

C. pegged exchange rates

D. freely floating exchange rates

5153. Which exchange rate mechanism calls for frequent redefining of the par value by small amounts to remove a payments disequilibrium ?
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A. managed floating exchange rates

B. adjustable pegged exchange rates

C. crawling pegged exchange rates

D. dual exchange rate

5154. Under managed floating exchange rates if the rate of inflation in the United States is less than the rate of inflation of its trading partners the dollar will likely ?
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A. be officially revalued by the government

B. appreciates against foreign currencies

C. depreciates against foreign currencies

D. be officially devalued by the government

5155. Asian tigers or newly industrializing countries (NICs) of East and Southeast Asia include the following except ?
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A. Singapore

B. Taiwan

C. South Korea

D. China

5156. More than seventy percent of the population of fast g: owers lives in ?
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A. Europe

B. Russia

C. China

D. United States

5157. Based on Mankiw Romer and Weil (1992) with conditional convergence holding fertility rates, education and government spending as a share of GDP constant ?
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A. income per capita in poor countries grows conditional upon foreign aid

B. income per capita in rich countries grows faster than in poor countries

C. income per capita in poor countries grows faster than in rich countries

D. income per capita is the same regardless of poor or rich countries

5158. How has the relative gap between GNP per capita for Western Europe and GNP per capita for African less-developed countries changed from the late nineteenth century to the present ?
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A. remained the same

B. cannot be determined

C. increased

D. declined

5159. The 1993 World Bank study entitled The East Asian Miracle (1993) identifies eight high performing Asian economies Which of the following is not one of them ?
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A. Vietnam

B. Four tigers

C. Thailand

D. Japan

5160. The 1993 World Bank study entitled The East Asian Miracle identifies eight high performing Asian economies. Which of the following is not one of them ?
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A. Thailand

B. Vietnam

C. The four tigers

D. Japan

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