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
1801. An increase in national income is ?
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A. Likely to decrease investment

B. Likely to decrease savings

C. Likely in increase exports

D. Likely to increase spending on imports

1802. The Coase theorem states that ?
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A. if there are external costs in production the government must intervene in the market to assure that the efficient level of output is produced

B. under certain conditions, private parties can arrive at the efficient solution without government involvement

C. public goods should be produced up to the point where the additional benefit received by society equals the additional cost of producing the good

D. the private sector will fail to produce the efficient amount of a public good because of the free-rider problem.

1803. An economy may operate outside the production possibility Frontier if ?
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A. It is being productively efficient

B. It is a mixed economy

C. It is trading other economies

D. It is not utilizing its resources fully

1804. The Bank of England and the Federal Reserve ?
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A. use fiscal policy to influence GDP

B. loan money to most of LDC commercial banks

C. are branches of commercial banks

D. are central banks
1805. If some gain and some lose as the result of a proposed change and it can be demonstrated that the value of the gains would exceed the value of the losses then the change is said to be ?
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A. inefficient.

B. potentially efficient

C. unequivocally Pareto optimal

D. technically efficient.

1806. A variable whose value is determined by the model of which it is a part is termed ?
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A. endogenous

B. exogenous

C. constant

D. independent

1807. Investment is a unstable element of aggregate demand because it depends heavily on ?
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A. Expectations

B. Historic trends

C. National income

D. Government policy
1808. Private goods are ?
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A. non-rival in consumption and their benefits excludable

B. rival in consumption and their benefits are non-excludable

C. rival in consumption and their benefits are excludable

D. non-rival in consumption and their benefits are nonexcludable:

1809. If marginal cost is positive and falling ?
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A. Total cost is increasing at an increasing rate

B. Total cost is falling

C. Total cost is increasing at a falling rate

D. Total cost is falling at a falling rate

1810. The In suppliers are most likely to get nervous and feel pressure to put their best foot forward in which of the following types of buying situations ?
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A. indirect rebuy

B. straight rebuy

C. modified rebuy

D. new task buying

1811. M4 is a __________ measure of money and includes deposits at both __________ and _________?
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A. Narrow, banks insurance companies

B. Wide, banks building societies

C. narrow, banks, building societies

D. wide, banks insurance companies

1812. _______ beliefs values are open to some degree of change ?
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A. Crucial

B. Primary

C. Core

D. Secondary
1813. If injections are less than withdrawals at the full-employment level of national income, there is ?
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A. an inflationary gap

B. A deflationary gap

C. hysteresis

D. hyperinflation

1814. When an economy first begins to grow more slowly ?
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A. Stock levels are likely to increase

B. Investment in equipment is likely to increase

C. GDP increase

D. Inflation is likely to increase

1815. _________ describes changes in an individuals behavior arising from experience?
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A. Learning

B. Perception

C. Motivation

D. Modeling

1816. In Which of the business cycle do firms try to cut stocks in order to save costs ?
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A. The expansion

B. The peeking out

C. The recession

D. The upturn

1817. Friedmans theory of consumption focuses on ?
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A. Current income

B. Disposable income

C. Past income

D. permanent income
1818. The idea that when externalities are present private parties can arrive at the efficient solution without government intervention under certain circumstance is known as ?
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A. free rider problem

B. the drop -in-the bucket problem.

C. The coase theorem

D. Arrows impossibility theorem

1819. An increase in investment is most likely to be caused by ?
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A. Lower interest rates

B. An increase in withdrawals

C. Lower national income

D. A decrease in the marginal propensity to consume
1820. With _______ prices rise in the first sector, remain the same in the second and increase overall?
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A. ratchet inflation

B. inflationary expectations

C. import substitution

D. demand pull inflation

1821. If the Keynesian consumption function is C = 10 + 0.8 Td when disposable income is Rs1000 the marginal propensity to consume is what ?
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A. 0.81

B. 800

C. 810

D. 0.8

1822. When the financial system lacks the capability of making judgement about investment opportunities due to asymmetric information leading to potentially bad credit risks lending is subject to ?
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A. social goods

B. moral hazard

C. hyperinflation

D. adverse selection
1823. According to the quantity theory of money an increase in the money supply is most likely to lead to inflation if ?
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A. The velocity of circulation decrease

B. The velocity of circulation and the number of transactions is constant

C. The number of transaction decrease

D. There is deflation

1824. Economic growth can be seen by an outward shift of ?
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A. The Gross Domestic Barrier

B. The Marginal Consumption Frontier

C. The Minimum Efficient Scale

D. The Production Possibility Frontier

1825. Open Market Operations occur when the government ?
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A. Increase the exchange rate

B. Buys and sells bonds and securities

C. Increases taxation

D. Reduces the interest rate

1826. A profit maximising firm will invest up to the level of investment where ?
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A. The cost of borrowing is less then the marginal efficiency of capital

B. The cost of borrowing is greater than the marginal efficiency of capital

C. The cost of borrowing equals the marginal propensity to consume

D. The cost of borrowing equals the marginal efficiency of capital

1827. _______ states that as real GNP per capita rises, people demand relatively more social goods and relatively fewer private goods?
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A. Fiscal policy

B. incomes policy

C. Wagners law

D. Moral hazard

1828. When internal economies of scale occur ?
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A. Total costs fall

B. Average costs fall

C. Marginal costs increase

D. Revenue falls

1829. R&D and engineering first produce the product concept into a physical product during which of the following stages of the new product development process ?
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A. Product development

B. Marketing strategy

C. Concept development and testing

D. Business analysis

1830. Potential growth measures ?
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A. The fastest growth an economy has ever achieved

B. the growth of the fastest economy in the world

C. The rate of growth that could be achieved if resources were fully employed

D. The present rate of growth of an economy

1831. The average variable cost curve ?
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A. Equals the total costs divided by the output

B. Converges with the average cost as output increases

C. is derived from the average fixed costs

D. Equals revenue minus profits

1832. The optimal level of provision of public goods is where society total willingness to pay per unit is equal to the ?
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A. total cost of producing the good

B. marginal cost of producing the good

C. variable cost of producing the good

D. average cost of producing the good

1833. If one persons enjoyment of the benefits of a good does not interfere with anothers consumption of it, the good is said to be ?
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A. congestible in consumption

B. non-excludable

C. limitless in utility

D. non-rival in consumption
1834. If firms earn normal profits ?
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A. They will aim to leave the industry

B. Other firms will join the industry

C. The revenue equal total costs

D. No profit is made is accounting terms

1835. According the law of diminishing returns ?
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A. The marginal product fall as more units of a variable factor are added to a fixed factor

B. The marginal product increases as more units of a variable factor are added to a fixed factor

C. Marginal utility falls as more unity of a product are consumed

D. The total product falls as more units of a variable factor are added to a fixed factor

1836. _______ factors are the most popular bases for segmenting customer groups?
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A. Demographic

B. Geographic

C. Psychographic

D. Behavioral

1837. _______ is the general term for a buying and selling process that is supported by electronic means?
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A. Computer commerce

B. Internet commerce

C. Electronic commerce

D. Web commerce

1838. If marginal revenue equals marginal cost ?
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A. No profit is being made

B. Total revenue equals total cost

C. Profits are maximised

D. Producing another unit would increase profits

1839. When producers, wholesalers, and retailers act as a unified system they comprise a ?
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A. vertical marketing system

B. conventional marketing system

C. power-based marketing system

D. horizontal marketing system

1840. An outward shift in the Marginal Efficiency of Capital should ?
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A. Reduce aggregate supply

B. Increase aggregate demand

C. Slow economic growth

D. Decrease consumption

1841. If the Keynesian consumption function is C = 10 + 0.8 Td when disposable income is Rs1000 the average propensity to consume is what ?
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A. 0.81

B. 810

C. 800

D. 0.8

1842. Assuming there is no government or foreign sector, if the MPC is 8 the multiplier is ?
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A. 8

B. 1.25

C. 5

D. 2

1843. A deflationary policy could include ?
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A. increasing injections

B. Reducing government spending

C. Reducing interest rates

D. Reducing taxation rates

1844. The total costs are Rs2000 and 10 units are produced. The marginal cost of an 11th unit is Rs1300 Which of the following is true ?
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A. The average cost for 10 units is Rs1300

B. The average cost for 11 units is Rs1300

C. The average cost increase from Rs20 to Rs30

D. The total costs for 11 units are Rs700

1845. A public good ?
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A. Has the properties of being non-excludable and non-diminishable

B. Is provided by the government

C. Is free

D. Gas external costs

1846. If Mark Mars pays Hershey Foods Corporation for the right to use their name on his line of T-shirts then Mr. Mars is using which type of branding ?
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A. Manufacturers brand

B. Private brand

C. Co-brand

D. Licensed brands
1847. If Honda uses its company name to cover such different products as its automobiles lawn mowers and motorcycles, it is practicing which of the following strategies ?
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A. new brand strategy

B. line extension strategy

C. multiband strategy

D. brand extension strategy
1848. With a positive externality ?
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A. The government may tax to decrease production

B. There is under-consumption in the free market

C. There is over consumption in the free market

D. Society could be made off it less was produced

1849. Which of the following statements regarding taxes is correct ?
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A. A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.

B. A decrease in taxes shifts the aggregate supply curve to the left

C. An increase in taxes shifts the aggregate demand curve to the right

D. Most economists believe that in the short run the greatest impact of a change in taxes is on aggregate supply, not aggregate demand

1850. If the economy is in the though phase of the business cycle, aggregate demand ____ unemployment ______ inflation ______ and the current account of the balance of payments is likely to move towards ________?
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A. falls; rises; falls; surplus

B. is static; low; rises; deficit

C. falls; falls; falls; surplus

D. rises; falls; rises; deficit