economics MCQs – Page 352

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 Review each marked answer and report any item that may be outdated or unclear.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
7021. Which of the following is Not true about external debt ?
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A. International lenders required LDC governments to guarantee private debt

B. When debts are denominated in U.S dollars their appreciation during the 1990s increased the cost of servicing such debts

C. External debt accumulates with international balance on goods services and income deficcits

D. In the 19901s LDCs relied increasingly on aid from DCs
7022. Fundamentalists want the IMF to lend to crisis-stricken countries on condition that they undertake fundamental structural reforms in banking Joseph Stiglitz however thinks it is______________?
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A. impractical for the IMF to loan short term as reforms can only be effective in the middle to long run

B. crucial that the IMF intervene in the reform of fiscal policy of the country and not the monetary policy

C. unrealistic for IMF to intervene in the financial markets of poor countries during the crisis

D. None of the statements above is correct

7023. Which of the following groups would be most harmed by a UK government budget deficit ?
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A. Foreigners who wish to buy assets in the UK

B. BAe Systems wishing to sell aircraft to Saudi Arabia

C. Lenders of loanable funds

D. UK residents wishing to buy foreign Produced cars

7024. An export subsidy should have the opposite effect of ?
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A. A government budget deficit

B. An increase in Private saving

C. A tariff

D. Capital flight

7025. An example of a trade policy is ?
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A. All are examples of trade policy

B. capital flight because it increases a countrys net exports

C. A tariff on sugar

D. an increase in the government budget deficit because it reduces a countrys net exports

7026. An increase in the government budget deficit ?
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A. decreases the real interest rate and crowds out investment

B. None of these answers

C. Increases the real interest rate and crowds out investment

D. has no impact on the real interest rate and fails to crowed out investment

7027. Which of the following statements about trade policy is true ?
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A. None of these answers

B. A countrys trade policy has no impact on the size of its trade balance

C. A restrictive import quota decreases a countrys net exports

D. A restrictive imports quota increases a countrys net exports

7028. An increase in Pakistans private saving ?
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A. Increase Pakistans net exports and decrease Pakistans net capital outflow

B. decrease Pakistans net exports and increase Pakistans net capital outflow

C. increase Pakistans net exports and Pakistans net capital outflow the same amount

D. decreases Pakistans net exports and Pakistans net capital outflow the same amount

7029. Which of the following statements regarding the market for foreign currency exchange is true ?
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A. An increase in Pakistans net exports decrease the demand for rupees and the rupees appreciates

B. An increase in Pakistans net exports increase the demand for rupees and the rupees appreciates

C. An increase in Pakistans net exports decreases the supply of rupees and the rupees depreciates

D. An increase in Pakistans net exports increases the Supply of rupees and the rupees depreciates

7030. Which of the following statement regarding the loanable funds market is true ?
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A. An increase in the government budget deficit shifts the supply of loanable funds to the right

B. An increase in private saving shifts the supply of loanable funds to the left

C. An increase in the government budget deficit shifts the supply of loanable funds to the left

D. A decrease in the government budget deficit increase the real interest rate

7031. An increasing in Europes taste for UK produced Hondas would cause the pound to ?
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A. appreciate and would increase UK net exports

B. depreciate and would increase UK net exports

C. appreciate, but the total value of UK net export stays the same

D. depreciate and would decrease UK net exports

7032. Suppose, due to political instability, Russians suddenly choose to purchase UK assets as opposed to Russian assets Which of the following statements is true regarding the value of the pound and UK net exports ?
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A. The pound appreciates, and UK net exports rise

B. The pound appreciates, and UK net exports fall

C. The pound depreciates, and UK net exports rise

D. The pound depreciates, and UK net exports fall

7033. Suppose, due to political instability, Russians suddenly choose to invest in UK assets as opposed to Russian assets Which of the following statements is true regarding UK net foreign investment ?
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A. UK net foreign investment rises

B. UK net foreign investment falls

C. UK net foreign investment is unchanged because only UK residents can after UK net foreign investment

D. None of the above

7034. The Phrase twin deficits refers to ?
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A. a countrys trade deficit and its net capital outflow deficit

B. A countrys trade deficit and its government budget deficit

C. the equality of a countrys saving deficit and its investment deficit

D. The fact that if a country has a trade deficit, its trading partners must also have trade deficits

7035. If the EU imposes a quota on the importing of clothing produced in China, so reducing UK imports of clothing Which of the following is true regarding the market for foreign currency exchange ?
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A. The Supply of pounds increases, and the pound depreciates

B. The demand for Pounds increases and the pound appreciates

C. The demand for pounds decreases and the pound depreciates

D. The Supply of pounds decreases, and the pound appreciates

7036. An increase in the Pakistans government budget deficit ?
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A. decreases Pakistans net exports and increase Pakistans net capital outflow

B. Increase Pakistans net exports and Pakistans net capital outflow the same amount

C. Increase Pakistans net exports and decrease Pakistans net capital outflow

D. decreases Pakistans net exports and Pakistans net Capital outflow the Pakistans same amount
7037. Which of the following statements regarding the loanable funds market is not true ?
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A. An increase in domestic investment shifts the demand for loanable funds to the right

B. An increase in a countrys net capital outflow raises its real interest rate

C. A decrease in a countrys net capital outflow shifts the demand for loanable funds to the left

D. An increase in a countrys net capital outflow shifts the supply of loanable funds to the left
7038. Which of the following groups would not benefit from an EU imports quota on Japanese cars ?
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A. Eu consumers who buy electronics from Japan

B. EU farmers who export grain

C. employees of EU car manufacturers

D. Shareholders of German carmaker BMW

7039. Capital flight ?
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A. increases a countrys net exports and increases its long-run growth path

B. increases a countrys net exports and decreases its long-run growth path

C. decreases a countrys net exports and decreases its long-run growth path

D. decreases a countrys net exports and increases its long-run growth path

7040. Which of the following statements regarding the market for foreign currency exchange is true ?
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A. An increase in Pakistans net capital outflow increase the supply of rupees and the rupees depreciate

B. An increase in Pakistans net capital outflow increase the supply of rupees and the rupees appreciate

C. An increase in Pakistans net capital outflow increase the demand of rupees and the rupees depreciate

D. An increase in Pakistans net capital outflow increase the demand of rupees and the rupees appreciate