economics MCQs – Page 32

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 Review each marked answer and report any item that may be outdated or unclear.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
621. The length of a business cycle would be measured from ?
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A. trough to peak

B. peak to peak

C. the slump to the expansion

D. peak to trough

622. If a nation has an open economy it means that the nation ?
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A. conducts trade with other countries

B. Has fixed exchange rates

C. Allows private ownership of capital

D. Has flexible exchange rates

623. Injection into the circular flow are ______ and __________?
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A. investment government expenditure exports

B. taxes exports, transfer payments

C. investment exports transfer payments

D. consumption investment exports

624. For the first time since World War I, in the mid-1980s the United States became a net international ?
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A. exporter

B. creditor

C. importer

D. debtor
625. The Paasche index uses _________ weights?
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A. base-year

B. Purchasing Power Parity (PPP)

C. fisher-ideal index

D. current-year
626. Which of the following country did not experience large capital flights from 1976 to 1984 ?
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A. Argentina

B. Canada

C. Mexico

D. Venezuela

627. Criticisms of Rostows stages of development include ?
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A. All of the above are correct

B. conditions for takeoff are contradicted by historical evidence

C. the difficulty of testing the stages scientifically

D. characteristics of one stage are not unique to that stage

628. Total injection are made up of?
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A. savings + government expenditure + exports

B. investment + government expenditure + exports

C. investment + tax + exports

D. investment + government expenditure + imports

629. For given government spending and taxation the government budget deficit will grow in _________ and decline in __________?
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A. recessions, booms

B. booms, recessions

C. recession, recession

D. booms, booms

630. Suppose the price level falls but suppliers only notice that the price of their particular product has fallen Thinking there has been a fall in the relative price of their product they cut back on production, This is a demonstration of the ?
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A. classical dichotomy theory of the short run aggregate supply curve

B. misperceptions theory of the short run aggregate supply curve

C. sticky wage theory of the short run aggregate supply curve

D. sticky price theory of the short run aggregate supply curve

631. The essential difference between capitalism and socialism is that ?
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A. capitalism exploits the worker and socialism exploits the property owner

B. capitalism relies on consumer satisfaction to dictate choices and socialism relies on producer satisfaction

C. capitalism relies on the market to make economic decisions and socialism uses central planning

D. capitalism grows through rent seeking and socialism grows through government direction

632. The natural rate hypothesis argues that ?
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A. in the long run the unemployment rate returns to the natural rate, regardless of inflation

B. Unemployment is always below the natural rate

C. Unemployment is always above the natural rate

D. Unemployment is always equal to the natural rate

633. The Vicious circle theory states that ?
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A. low income levels create pressure for cheap imports

B. low per capita incomes creates low savings that keep incomes low

C. low income levels create pressure for money creation

D. growing government assistance create addiction to welfare programs

634. PPP is ?
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A. a theory that tells us that exchanged rates between currencies are in equilibrium when their purchasing power is the same in both countries

B. GDP divided by exchange rate

C. a measure of income inequality

D. a measure of infant mortality in developing countries

635. Which of the following statements is true regarding the long-run aggregate supply curve? The long-run aggregate supply cruve ?
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A. shifts right when the government raises the minimum wage

B. shifts left when the natural rate of unemployment falls

C. is positively sloped because price expectations and wages tend to be fixed is the long run

D. Is vertical because an equal change in all prices and wages leaves output unaffected
636. Refer to Exhibit 6. Suppose the economy is Operating in long-run equilibrium at point E. In the long run a monetary contraction will move the economy in the direction of point ?
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A. F

B. I

C. H

D. a

637. Recent pressures for protectionism in the United States have been motivated by all of the following except ?
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A. High profit levels for American corporations

B. U.S firms shipping component production overseas

C. High unemployment rates among America workers

D. Sluggish rates of productivity growth in the United States

638. Tuvalu is composed of 9 coral atolls along a 360-mile chain in Polynesia They gained independence in 1978 The former Ellice Island are home to 9,700 people if GNP of Tuvalu is $300 million in 2005 GNP per capital is ?
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A. 9700 (1978 / 2005)

B. 300 000 000 / 9700

C. 32.333

D. 300 / 360

639. The underground economy consists of ?
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A. legal transactions not declared for tax and illegal activities

B. the water distribution system

C. part of the rail network

D. legal transactions

640. Shortly after 1979 World Bank introduced loans that emphasized reforms in trade, agriculture industry public enterprise financial energy education or other sectors and were know as ?
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A. sectoral adjustment loans

B. external leverage loans

C. Structural adjustment loans

D. internal adjustment loans