economics MCQs – Page 419

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 Review each marked answer and report any item that may be outdated or unclear.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
8361. If the Bank of England reduces the money supply to reduce inflation a floating exchange rate will aid the Bank of England in fighting inflation because ?
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A. as the money supply is decreased the interest rate will increase and the price of UK exports will rise and the Price of UK imports will fall

B. as the money supply is decreased the interest rate will increase, and the price of UK exports will fall and the price of UK imports will rise

C. as the money supply is decreased the interest rate will increase and the price of UK exports and UK imports will fall.

D. as the money supply is decreased the interest rate will increase and the price of both UK exports and UK imports will rise

8362. The rise in value of one currency relative to another is ?
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A. An appreciation of a currency

B. A depreciation of a currency

C. a weakening of a currency

D. a debasement of a currency

8363. The real effective exchange rate for the U.S dollar ?
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A. reflects only the influences of merchandise or real trade on the dollars exchange value

B. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners unadjusted for inflation?

C. reflects only transactions in the currency futures market

D. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners adjusted for inflation?
8364. Which financial instrument provides a buyer the right to purchase or sell a fixed amount of currency at a prearranged price, within a few days to a couple of years ?
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A. foreign currency option

B. letter a credit

C. cable transfer

D. bill of exchange

8365. Investor engage in _____ when they move funds into foreign currencies in order to take advantage to interest rates abroad that are higher than domestic interest rates ?
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A. long positions

B. short positions

C. currency arbitrage

D. interest arbitrage
8366. Suppose there occurs an increase in the Canadian demand for Japanese computers This results in a (an) ?
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A. increase in the supply of yen

B. increase in the demand for yen

C. decrease in the Supply of yen

D. decrease in the demand for yen

8367. The least common type of transaction in the foreign exchange is a ?
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A. None of the above

B. spot transaction

C. forward transaction

D. swap transaction

8368. The fall in value of one currency relative to another is ?
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A. a floating of a currency

B. an appreciation of a currency

C. a strengthening of a currency

D. a depreciation of a currency
8369. The reduction or covering of foreign exchange risk is called ?
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A. speculation

B. hedging

C. arbitrage

D. intervention

8370. A difference between forward and futures contracts is that ?
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A. futures contracts have negotiable delivery dates

B. forward contracts can be tailored in amount and delivery date to the need of importers of exporters

C. futures contracts involve no brokerage fees or other transactions costs

D. forward contracts occur in a specific locations-for example, the Chicago Mercantile Exchange

8371. In the early eighties, the Federal Reserve pursed a tight monetary policy. All else being equal. the impact of that policy was to interest rates in the United States relative to those in Europe and cause the dollar to _______ against European currencies?
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A. decrease; depreciate

B. increase; depreciate

C. decrease; appreciate

D. increase; appreciate
8372. Resources in an economy ?
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A. Are limited at any moment in time

B. Are always found

C. Can never decease

D. Always increase over time

8373. If marginal benefit is greater than marginal cost, a rational choice involves ?
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A. more of the activity

B. no more of the activity.

C. less of the activity

D. more or less, depending on the benefits of other activities

8374. The sacrifice involved when you choose a particular course of action is called the ?
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A. Alternative

B. Consumer cost

C. Producer cost

D. Opportunity cost
8375. The opportunity cost of a good is______________?
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A. the loss of interest in using savings

B. the time lost in finding it

C. the expenditure on the good

D. the quantity of other goods sacrificed to get another unit of that good
8376. Economics is the study of ?
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A. how society manages its unlimited resource

B. how to reduce our wants until we are satisfied.

C. how to avoid having to make trade-offs

D. how to fully satisfy our unlimited wants

8377. In a command (planned) economy ?
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A. The public sector is large

B. Individual firms make decisions for themselves about what to produce and how to produce it

C. The price mechanism acts as an incentive

D. Resources are allocated by market forces
8378. Unemployment means that ?
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A. at the going wage rate, there are people who want to work but cannot find work.

B. there are some people who will not work at the going wage rate.

C. people are not willing to work at the going wage rate.

D. there is excess demand in the labour market

8379. A student chooses to study because the marginal benefit is greater than the ______________ cost?
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A. total

B. marginal

C. expected

D. average

8380. In a free market?
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A. government intervenes

B. government interferes

C. Prices adjust to reconcile scarcity and desires

D. government plan production