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
1351. Which of the following is true regarding the similarities and differences in monopolistic competition and monopoly ?
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A. the monopolist faces a downward-sloping demand curve while the monopolistic competitor faces an elastic demand curve

B. the monopolist charges a price above marginal cost while the monopolistic competitor charges a price equal to marginal cost

C. The monopolist makes economic profits in the long run while the monopolistic competitor makes zero economic profits in the long run

D. Both the monopolist and the monopolistic competitor operate at the efficient scale

1352. The monetary base is ________ and _________?
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A. retail deposits, wholesale deposits

B. bank deposits, building society deposits

C. Currency in circulation, banks cash reserves

D. retail sight deposits building society deposits

1353. Which of the following is true with regard to monopolistically competitive firms scale of production and pricing decisions Monopolistically competitive firms produce ?
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A. With excess capacity and charge a price equal to marginal cost

B. at the efficient scale and charge a price above marginal cost

C. at the efficient scale and charge a price equal to marginal cost

D. With excess capacity and charge a price above marginal cost
1354. Quotas are government-imposed limits on the _________ of goods trade between countries?
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A. costs

B. revenue

C. prices

D. quantity
1355. What is the share of population over 60 years in the total population of Pakistan ?
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A. 4%

B. 9%

C. 10%

D. 8%

1356. Suppose that the domestic government allows a specific number of goods to be imported each year, but it does not specify from where the product is shipped or who is permitted to import Such a trade barrier is known as ?
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A. a global quota

B. an import tariffs

C. a tariff rate quota

D. a selective quota

1357. The largest spoken language in Pakistan is ?
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A. Pushto

B. Sindhi

C. Panjabi

D. Urdu

1358. A bank has excess reserves to lend but is unable to find anyone to borrow the money This will _________ the size of the money multiplier?
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A. have no effect on

B. double

C. reduce

D. increase

1359. According to Schumpeter ?
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A. Monopoly profits ac as an incentive for innovation

B. Monopolies are alocatively efficient

C. Monopolies are inefficient

D. Monopolies are productively efficient

1360. The refinancing rate is ?
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A. The interest rate at Which commercial banks lend to and borrow from each other

B. The interest rates the public pays when borrowing from banks

C. The interest rate the European Central Bank pays on reserves

D. He interests rate banks pay on the publics deposits

E. The interest rates the European Central Bank charges on loans to banks
1361. The form of international price discriminations (dumping) normally associated with economic recession or excess inventories in the exporting nation is known as ?
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A. persistent dumping

B. sporadic dumping

C. Predatory dumping

D. year end dumping

1362. Which of the following activities is one of the responsibilities of the Bank of England to the banking system ?
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A. Loaning money to other countries that are friendly to the UK.

B. Auditing the various agencies and department of the government

C. Assisting Banks that are in a difficult financial position

D. Issuing new bonds to finance the PSBR.

1363. The second major profession in Pakistan is ?
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A. Trade

B. Industry

C. Agriculture

D. Civil Service
1364. Many economics argue that resale price maintenance ?
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A. is price fixing and therefore, is prohibited by law and enhances the market power of the producer

B. is price fixing and, therefore is prohibited by law

C. has a legitimate purpose of stopping discount retailers from free riding on the services provided by full services retailers?

D. enhances the market power of the producer

1365. If a marginal revenue exceeds marginal cost, a monopolists should?
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A. decrease output

B. increase should

C. raise the price

D. keep output the same because profits are maximized when marginal revenue exceeds marginal cost

1366. The firm would maximize profit by selling computers in the United States at a price of __________ and _________ computers in Japan at a price of __________?
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A. 300, $1,800, 800 $800

B. 500, $1,400, 400 $800

C. 200, $2,000, 100 $1,000

D. 300, $1,800, 400 $800

1367. One source of inefficiency in monopolistic competition is that since price is above marginal cost, some units are not produced that buyers value in ?
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A. monopolistically competitive firms produce beyond their efficient scale

B. Since price is above marginal cost surplus is redistributed from buyers to sellers

C. monopolistically competitive firms earn economic profits in the long run

D. excess of the cost of production and this causes a deadweight loss.
1368. Which of the following is a characteristic of pure monopoly ?
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A. perfect information

B. One seller of the product

C. low barriers to entry

D. close substitute products

1369. ________ occurs when a firm disposes on foreign markets a temporary increases in inventories caused by unforeseen changes in supply and demand conditions in the home economy?
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A. persistent dumping

B. foreign dumping

C. predatory dumping

D. sporadic dumping
1370. What is the density of population in Pakistan according to census of 1998 ?
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A. 185 persons per square KM

B. 150 persons per square KM

C. 158 persons per square KM

D. 164 persons per square KM
1371. Which of the following is necessary for a natural monopoly ?
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A. a high proportion of the total cost in the cost of capital goods

B. all of the above

C. the market is very small

D. economies of scale

1372. Thomas is a monopolist in the production of your textbook because ?
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A. Thomson has a legally protected exclusive right to produce this textbook

B. Thomson is a very large company

C. Thomson is a natural monopoly,

D. Thomson owns a key resource in the production of textbooks.

1373. If there is a general shortage of liquidity in the money market then ?
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A. The short-term interest rate at which the economys commercial banks lend to and borrow from each other will rise and the long-term interest rate may be expected to rise as a result

B. the long-term interest rate in the economy will rise and the central bank will raise its interest rate in response

C. The short-term interest rate at which the economys commercial banks lend to and borrow from each other will fall and the central bank may be expected to reduce the supply of liquidity to the banks

D. The banks will increase their lending

E. The short-term interest rate at which the economys commercial banks lend to and borrow from each other will rise and the central bank may be expected to increase the supply of liquidity to the banks.
1374. The standard of living is often measured by ?
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A. Real GDP plus depreciation

B. Real GDP per capita

C. Real GDP population

D. Real GDP

1375. Governments around the world tend to auction quota licenses ?
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A. always

B. seldom

C. often

D. never

1376. Which of the following is not a characteristic of a monopolistically competitive market ?
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A. differentiated products

B. long run economic profits

C. free entry and exit

D. many sellers

1377. Money that a government has required has required to be accepted in settlement of debts is ?
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A. barter money

B. currency value

C. legal tender

D. commodity money

1378. The purpose of antitrust (also known as competition) laws is to ?
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A. increase merger activity to help generate synergies that reduce costs and raise efficiency.

B. create public ownership of natural monopolies

C. Increase competition in an industry by preventing mergers and breaking up large firms.

D. regulate the prices charged by a monopoly

E. all of these answers

1379. Which of the following firms has the least incentive to advertise ?
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A. a manufacturer of home heating and air conditioning

B. a manual fracture of breakfast cereal

C. a wholesaler of crude oil

D. a restaurant

1380. An example of an expansionary monetary policy is ?
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A. the Central bank buying government securities in the open market

B. an increase in the discount rate

C. an increase in the required reserve ratio

D. a reduction in the taxes banks pay on their profits.

1381. The market for hand tools (such as hammers and screwdrivers) is dominated by Draper Stanley, and Craftsman This market is best described as ?
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A. a monopoly

B. an oligopoly

C. competitive

D. monopolistically competitive

1382. If Pakistans GDP exceeds Pakistans GNP, then ?
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A. real GNP exceeds nominal GNP

B. intermediate production exceeds final production

C. foreigners are producing more in the Pakistan then Pakistanis are producing in foreign countries

D. real GDP exceeds nominal GDP

1383. Export subsidies levied by foreign governments on products in which the Pakistan the comparative disadvantage ?
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A. encourage Pakistans production of competing goods

B. encourage Pakistani workers to demand higher wages

C. lower the welfare of all Pakistanis

D. lead to increases in Pakistani consumer surplus
1384. Equilibrium in the Money market will change if there is ?
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A. a change in real income

B. any of the above

C. a change in the real money supply

D. a change in competition in the banking industry

1385. Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount rate is likely to ?
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A. Decrease the money supply because it is now cheaper for banks to borrow from the central bank instead instead of buying government securities

B. decrease the money supply because it will now be more expensive for business firms and consumers to borrow money

C. Not change the money supply because banks already have excess reserves they cannot lend

D. increase the money supply because it is now cheaper for banks to borrow from the central bank

1386. A situation in which oligopolists interacting with one another each choose their best strategy given the strategies that all the other oligopolists have chosen is known as a ?
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A. dominant strategy.

B. cartel

C. collusion solution

D. Nash equilibrium
1387. To maintain that South koreans are dumping their DVDs in the United States is to maintain that ?
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A. The cost of manufacturing DVDs in Korea is lower in Korea than in the U.S since wages are lower in Korea

B. The cost of manufacturing DVDs in Korea is higher in Korea than in the U.S since wages are higher in Korea

C. Koreans are selling DVDs is the U.s above their productions cost

D. Koreans are selling DVDs in the U.S below their production cost
1388. In the UK the government ?
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A. Has the right to investigate monopolies and will assess each one on its own merits

B. Bans monopolies

C. Fines all monopolies

D. Prevents firms acquiring more than 25% of the market

1389. Suppose that ABC publishing sells an economics textbook and accompanying study guide. Raheel is willing to pay Rs75 for the text and Rs15 for the study guide. Mariam is willing to spend Rs60 for the text and Rs25 for the study guide. Suppose both the book and study guide have a zero marginal cost of study production. If ABC publishing engages in tying the two products its best strategy is to charge a combined price of ?
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A. Rs 90

B. Rs 75

C. Rs 60

D. Rs 85
1390. In order to practice price discrimination which of the following is needed ?
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A. some degree of monopoly power

B. an ability to separate the market

C. all of the above

D. an ability to prevent reselling

1391. The Kinked Demand curve theory assumes ?
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A. Firms are not profit maximisers

B. Firms cooperate

C. Firms are competitive

D. Firms act as part of cartel

1392. Which one of the following is not true ?
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A. The difference between the price at which commercial bank sells an asset to the central bank and the price it agrees to buy it back can be expressed as an annualized percentage of the selling price and this is called the refinancing rate

B. In the UK the refinancing rate is known as the repo rate and in the USA it is referred to as the discount rate.

C. If the central bank raises its refinancing rate then the commercial banks will try to reduce their lending and so reduce the need to borrow from the central bank

D. If the central bank has bought some assets from a commercial bank with an agreement that the commercial bank will buy them back at a later date, then this would be called a repo

E. Commercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate
1393. Suppose all banks maintain a 100 percent reserve ratio. If an individual deposits Rs 1,000 of currency in a bank ?
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A. the money supply decrease by less than Rs 1,000

B. the money supply increases by more than Rs 1,000

C. the money supply increase by less than Rs 1,000

D. The money supply is unaffected

E. the money supply decrease by more than Rs 1,000

1394. The demand for money represents the idea that there is ?
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A. a negative relationship between the level of aggregate output and the quantity of money demanded

B. a negative relationship between the price level and the quantity of money demanded

C. a negative relationship between the interest rate and the quantity of money demanded

D. a positive relationship between the interest rate and the quantity of money demanded

1395. How is your purchase in Pakistan of a Rs40,000 BMW automobile that was produced entirely in Germany recorded in the Pakistans GDP accounts ?
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A. Net exports increase by Rs40,000

B. Investment increased by Rs40,000 and net exports increases by Rs40,000

C. There is no impact because this transaction does not involve domestic production

D. Consumption in increase by Rs40,000 and net export decreases by Rs40,000
1396. Theodore panayotou (1993) argues that environment degradation originates from the following EXCEPT ?
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A. the expansion of capitalism

B. defective economic policies

C. inadequate property

D. markets distortions

1397. When real income increases other things equal we can expect the demand for real money holdings to ?
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A. None of these

B. not change

C. increase

D. fall

1398. From the perspective of the American public as a whole, export subsidies levied by overseas governments on goods sold to the United States ?
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A. are equivalent to an import quota

B. are equivalent to an export quota

C. help more than they hurt

D. hurt more then they help

1399. Reserve requirements that may be imposed on an economys banks by its central bank specify that banks by its central bank specify that banks reserve must be a minimum percentage of them ?
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A. government bonds

B. deposits

C. assets

D. loans

1400. The motive for holding money that encourages investors to hold bonds when interest rates are low, with the hope of selling them when interest rates are high, is the ?
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A. precautionary motive

B. speculation motive

C. Transactions motive

D. profit motive