economics MCQs – Page 417

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 Review each marked answer and report any item that may be outdated or unclear.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
8321. Suppose that tomatoes from Mexico face a 20 percent tariff in the United States and a 25 percent tariff in Canada. If the United States and Canada maintain free trade between each other, the these two countries belong to a ?
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A. customs union

B. free-trade area

C. monetary union

D. common market

8322. A ____ is a regional trading bloc in Which member countries eliminate internal trade barriers but maintain existing barriers against countries that are not member ?
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A. free trade area

B. monetary union

C. customs union

D. common market

8323. Members of the EU find that trade creation|| is fostered when their economies are ?
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A. highly noncompetitive

B. geographically distant

C. small in economic importance

D. highly competitive
8324. Which level of economic integration best applies to the U.S economy ?
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A. free trade area

B. customs union

C. common market

D. monetary union
8325. Trade creation takes place when ?
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A. economic integration results in a movement in product origin to a lower-cost member country

B. a movement to a customs union reduces the cost of trade through standardization

C. a country moves from autarky to free trade

D. economic integration results in a shift in product origin from a lower cost nonmember country to a member country having higher costs

8326. The implementation of the European Union has ?
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A. made it easier for Americans to compete against the Germans in the British market

B. made it harder for Americans of compete against the Germans in the British market

C. made it easier for Americans to compete against the Japanese in the British

D. made it harder for Americans to compete against the Japanese in the British market

8327. When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists ?
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A. trade diversion

B. dynamic welfare effects

C. comprehensive welfare effects

D. trade creation

8328. Under a system of floating exchange rates there is a general tendency for ?
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A. the currencies of relatively low inflation countries to depreciate

B. the currencies of relatively high-inflation countries to depreciate

C. exchange rates to be insensitive to the differential rates of inflation between countries

D. the currencies of relatively high inflation countries to appreciate

8329. Suppose that a Swiss television set that costs 400 francs in Switzerland cost $200 in the United States. The exchange rate between the franc and the dollar is ?
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A. $3 per franc

B. 1 franc per dollar

C. $2 per franc

D. 2 francs per dollar
8330. The J-curve effect refers to the observation that ?
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A. GDP usually decreases before it increases after a currency depreciation

B. GDP usually decreases before it increases after a currency appreciation

C. the trade balance usually gets worse before it improves after a currency depreciation

D. the trade balance usually gets better before it gets worse after a currency appreciation

8331. If Swedens currency depreciates relative to Norways currency ?
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A. Swedens export goods become cheaper to Norways residents

B. Swedens export goods become cheaper to Swedens residents

C. Norways export goods become more expensive to Norways residents

D. Norways exports goods become cheaper to Swedens residents

8332. Under a system of floating exchange rates the pound would depreciate in value if there occurs ?
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A. Price inflation in the United States

B. an increase in U.S real income

C. falling interest rates in Britain

D. a decrease in the British money supply

8333. A fiscal expansion in the UK ?
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A. tends to appreciate the pound sterling

B. has no predictable effect on the price of the pound sterling?

C. tends to depreciate the pound sterling

D. does not affect the price of the pound sterling

8334. If the bank is selling francs for $0.45, then what is the implied franc price of the dollar ?
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A. 1.999

B. 2

C. 2.222

D. 2.323

8335. The largest volume of foreign exchange trading takes place in ?
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A. Germany

B. USA

C. United Kingdom

D. China

8336. An important feature of a _______ is that the holder has the right but not the obligation to buy or sell currency ?
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A. foreign exchange option

B. foreign exchange arbitrage

C. Swap

D. futures market contract

8337. Expansionary monetary policy ?
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A. tends to lead to an appreciation of a nations currency

B. usually has no effect on a currencys exchange value

C. tends to lead to a depreciation of the currencies of other nations

D. tends to lead to a depreciation of a nations currency
8338. The supply of foreign currency tends to be ?
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A. upward sloping

B. any of the above

C. downward sloping

D. vertical

8339. Given the foreign currency market for the Swiss franc, the supply of franc slopes upward, because as the dollar price of the franc rises ?
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A. Switzerlands demand for American merchandise falls

B. Switzerlands demand for American merchandise rises

C. Americas demand for Swiss merchandise rises

D. Americas demand for Swiss merchandise falls

8340. The agreements that were reached at the Bretton Woods conferences in 1944 established a system ?
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A. of essentially fixed exchange rates under which each country agreed to intervene in the foreign exchange market when necessary to maintain the agreed upon value of its currency

B. of floating exchange rates determined of the supply and demand of one nations currency relative to the currency of other nations

C. That prohibited governments from intervening in the foreign exchange markets

D. in which the value of currencies was fixed in terms of a specific number of ounces of gold, which in turn determined their values in international trading