economics MCQs – Page 394

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 Review each marked answer and report any item that may be outdated or unclear.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
7861. The gas-guzzler tax that is placed on new vehicles that are very fuel inefficient is an example of ?
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A. a tradeable pollution permits.

B. an attempt to internalize a negative externality.

C. an application of the Coase theorem

D. an attempt to internalize a positive externality

7862. The government engages in a technology policy ?
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A. to internalize the positive externality associated with technology-enhancing industries.

B. by allocating tradable technology permits to high technology industry.

C. to internalize the negative externality associated with industrial pollution

D. to help stimulate private solution to the technology externality

7863. When an individual buys a car in a congested urban area, it generates ?
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A. a technology spillover

B. a positive externality

C. a negative externality

D. an efficient market outcome.

7864. Roberto and Thomas live in a university hall of residence Roberto values playing loud music at a value of 100. Thomas values Pease and quiet at a value of 150. Which of the following statements is true ?
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A. It is efficient for Roberto to stop playing loud music only if Thomas has the property right to peace and quiet

B. It is efficient for Roberto to stop playing loud music only if Roberto has the property right to play loud music

C. It is efficient for Roberto to stop playing loud music regardless of who has the property right to the level of sound

D. it is efficient for Roberto to continue to play loud music

7865. An externality is ?
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A. the cost that accrues to the seller in a market

B. The uncompensated impact of one persons actions on the well-being of a bystander

C. the compensation paid to a firms external consultants.

D. none of these answers

E. the benefit that accrues to the buyer in a market

7866. A reflationary (expansionist) fiscal policy could include ?
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A. Increased lending by the banks

B. An increase in discretionary government spending

C. An increase in corporation tax

D. Lower interest rates

7867. The negative effect on the economy that occurs when average tax rates increase because taxpayers have moved into higher income brackets during an expansion is ?
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A. fiscal drag

B. debt burden

C. bracket creep

D. the Laffer curves
7868. As the required reserve ratio is decreased the money multiplier ?
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A. decrease

B. remain the same, as long as bank hold no excess reserves

C. could either increase or decrease

D. increase
7869. Fiscal Policy refers to ?
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A. The actions of the central bank in controlling the money supply

B. The governments attitude to taxation

C. The government regulation of financial intermediaries

D. The spending and taxing policies used by the government to influence the economy
7870. The response lag of stabilization policy represents ?
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A. the time that it takes for policy makers to recognize the existence of boom of bust

B. the time needed for parliament to agree to a tax cut.

C. the time that it takes for the economy to adjust to the new conditions after a new policy has been implemented

D. the time that is necessary to put the desired policy into effect

7871. The implementation lag for monetary policy is generally ?
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A. unrelated to central bank action

B. the same as it is for fiscal policy

C. much shorter than it is for fiscal policy

D. mush longer than it is for fiscal policy

7872. Fiscal drag occurs when ?
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A. Tax banks increase with inflation

B. Government spending falls to reduce aggregate demand

C. Tax bands do not increase with inflation

D. Tax rates move inversely with inflation

7873. Net taxes are ?
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A. taxes paid by firms and households to the government minus the cost of collecting the taxes

B. government expenditures minus government revenues

C. Taxes paid firms and households to the government minus the transfer payments made to firms and household

D. Taxes paid by firms and households to the government plus transfer payments made to firm and households

7874. Time lags which often erode effectiveness of monetary and fiscal policy measures represent ?
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A. the change in exports and imports prices

B. delays in the response of the economy is stabilization policy

C. the foreign response to price changes

D. the change in exchange rates

7875. If the economy grows the governments budget position will automatically ?
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A. Stay the same

B. worsen

C. Improve

D. Increase with inflation

7876. By financial crowding out economist mean ?
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A. government borrowing drives up interest rates

B. what the government borrows cannot be used for private investment

C. credit rationing

D. Bank of England controls on commercial bank lending

7877. The idea that the money supply should change to accommodate changes in aggregate demand is associated with the idea of ?
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A. Margaret Thatcher

B. Milton Friedman

C. John Maynard Keynes

D. Ronald Reagan

7878. If the marginal rate of tax is 40% and consumers income increase from Rs10,000 to Rs12,000 ?
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A. The amount of tax paid will increase by Rs 800

B. The amount of tax paid will increase by Rs4,800

C. The amount of tax paid will increase by Rs4,000

D. The total tax paid will be Rs4,800
7879. Automatic stabilisers act to ____ government expenditures and ____ government revenues during recessions ?
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A. increase; decrease

B. decrease; decrease

C. increase: increase

D. decrease; increase

7880. By controlling the monetary base economists mean ?
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A. making banks keep a certain % of their assets as M0

B. not allowing commercial banks to issue notes and coins

C. controlling the money multiplier

D. restricting the amount of cash in circulation