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
2301. The neoclassical theory of growth identifier the steady state rate of growth as the ____ just sufficient to keep _____ constant while labor grows?
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A. saving, investment

B. investment capital per person

C. capital per person, productivity

D. labor growth, output

2302. The migrations of electricians from low-paying nations to high-paying nations is most likely to be challenged by ?
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A. electrician employers in the high-paying nations

B. electrician unions in the high-paying nations

C. electrician unions in the low paying nations

D. electricians who stay in the low paying nations

2303. The Phillips curve shows the relationship between inflation and what ?
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A. The rate of price increase

B. Unemployment

C. The balance of trade

D. The rate of growth in an economy

2304. Which of the following is likely to generate a compensating differential ?
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A. One employee is more attractive than another

B. One employee is more educated than another

C. All of these answers generated

D. One employee works harder than another

E. One employee is willing to work the nightshift while another is not.
2305. Potential output can be increased by ____ or by ______?
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A. increasing the use of capital increasing the use of labour

B. increasing the use of labor increasing the use of land

C. increasing the use of all inputs, technical advances

D. increasing the use of land increasing the use of capital

2306. Mariam earns more than Seamus and she came by her income fairly and honestly which of the following political philosophies would argue against the redistribution of income from Mariam to Seamus ?
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A. utilitarianism

B. none of these answers

C. libertarianism

D. all of these answers

2307. Economists have hypothesized that the widening gap between the wages of unskilled workers and skilled workers may be due to ?
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A. decrease in the demand for unskilled workers are more poorly educated

B. increase in the number of unskilled workers available due to immigration into the UK.

C. increase in the number of unskilled workers available because workers are more poorly educated

D. decrease in the demand for unskilled workers because of increases in technology and increases in international trade
2308. According to the Phillips curve unemployment will return to the natural rate when ?
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A. Inflation is higher than the growth of nominal wages

B. Nominal wages are growing faster than inflation

C. Nominal wages are equal to expected wages

D. Real wages are back at equilibrium level

2309. The term rent as it is used by economists. refers to ?
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A. the amount paid each year by a tenant for an apartment

B. the profit earned by the owner of any housing unit.

C. the return to any factor of production that is in fixed supply

D. any profit earned by stockholders when they sell their stock

2310. Sector shifts tend to raise which type of unemployment ?
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A. Frictional Unemployment

B. Unemployment due to efficiency wages

C. Unemployment due to unions

D. Structural Unemployment

2311. Suppose your income rises from Rs19,000 to Rs31,000 while the CPI rises from 122 to 169 Your standard of living has likely ?
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A. fallen

B. stayed the same

C. You cant tell without knowing the base year

D. risen
2312. Unemployment benefits may increase the unemployment rate because unemployment benefits ?
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A. reduce the cost of job search

B. encourage people to quit their jobs

C. enable people to quit searching for work

D. reduce the benefits of additional job searching

2313. Economic growth is important because ?
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A. People want higher incomes and more consumer goods.

B. People want less crime

C. People want to be happier

D. People want a better environment

2314. Which of the following statements about efficiency wage theory is true ?
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A. Paying above the competitive equilibrium wage tends to cause workers to shirk their responsibilities

B. Paying the lowest possible wage is always the most efficient (Profitable)

C. Firms do not have a choice about whether they pay efficiency wages or not because these wages are determined by law

D. Paying above the competitive equilibrium wage may improve worker health lower worker turnover improve worker quality and increase worker effort
2315. A good produced by a natural monopoly is ?
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A. rival but not excludable

B. neither rival nor excludable

C. not rival but excludable

D. both rival and excludable

2316. Economic growth may depend upon _____ and _____?
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A. Population age distribution, education

B. Population growth technical progress

C. Population growth education

D. Population size, x-efficiency

2317. The growth path resulting from technological progress for a given saving rate is known as the ?
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A. teady state growth path

B. Steady state growth path

C. Steady state level of output

D. Steady state invention rate

2318. Which business device involves the creation of a new business by two or more companies often for a limited period of time ?
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A. horizontal merger

B. multinational corporation

C. international joint venture

D. vertical merger

2319. Different capital intensity in different industries is mainly explained by _______ and ________?
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A. government grants, international competition

B. technology, the ease of factor substitution

C. patents, skill shortages

D. wage differentials, skill levels

2320. Real business cycle theory suggests that ____ not important in explaining short-term fluctuations around actual output ?
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A. aggregate supply is

B. aggregate demand is

C. potential output is

D. real variables are

2321. New technology in the form of computer spreadsheets has increased the productivity of accountants. This will cause ?
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A. firms to move down their demand curves for accountants

B. the demand curve for accountants to shift to the right, since the productivity of accountants has increased

C. the demand curve for accountants to shift to the left, since it requires fewer accountants than it did before to do the same amount of work.

D. firms to move up their demand curves for accountants

2322. Supply side policies are most appropriate to cure ?
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A. Cyclical unemployment

B. A fall in aggregate demand

C. Involuntary unemployment

D. Voluntary unemployment

2323. Which city is famous for the textile mills that produce finest worsted suiting in the world ?
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A. Haripur

B. Faisalabad

C. Karachi

D. Lawrencepur

2324. IF Unemployment insurance were so generous that it paid laid off workers 95 percent of their regular salary ?
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A. The official unemployment rate would probably overstate true unemployment

B. Frictional Unemployment would fall

C. There would be no impact on the official unemployment rate

D. The official unemployment rate would probably understate true unemployment

E. None of these answers

2325. In the neoclassical theory of growth a higher saving rate leads to ?
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A. a fluctuating growth rates

B. no change in the growth rate

C. a higher growth rates

D. a fluctuating growth rate

2326. The marginal revenue product of capital is the ?
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A. changing value of the capital stock

B. change in a companys balance sheet when it acquires new plant

C. additional value of output from using more capital

D. change in companys share price

2327. Unions achieve a higher wage differential the more _____ and the more ______?
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A. members they have, aggressive they behave

B. inelastic the demand for labour, they can restrict the supply of labour

C. the economy is growing, people prefer leisure

D. the productivity is growing vacancies exist

2328. Which of the following is not an example of foreign direct investment ?
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A. the purchase of bonds or stock issued by a textile company overseas

B. the construction of a new auto assembly plant overseas

C. the creation of a wholly owned business firm overseas

D. the acquisition of an existing steel mill overseas

2329. ____ was a strategy for industrial development popular in Latin America in the 1950s 1 1960s for promoting domestic production by erecting high protective tariffs on imports of manufactured goods ?
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A. import substitution

B. export led growth

C. countervailing duties

D. dynamic hedging

2330. The growth rates of economies tend to converge because ________ is easier when capital per worker is low and because of?
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A. capital-widening Catch-up in technology

B. capital-deepening technical innovation

C. capital-widening technical innovation

D. capital-deepening, catch-up in technology
2331. A Gini coefficient of zero means that the ?
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A. one person has all the income and every one else has nothing

B. all the income is received by the top 20% of the income distribution

C. income is equally distributed

D. the income is split equally between the top 20% and the rest of the distribution

2332. GDP per head may be an imperfect measure of economic welfare because it excludes ?
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A. Externalities

B. Untraded goods

C. Change in the distribution of income

D. All of the above

E. the value of leisure

2333. If, for any reason the wage is held above the competitive equilibrium wage?
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A. Unions will likely Strike and the wage will fall to equilibrium

B. The quality of workers in the applicant pool will tend to fall

C. The quantity of labour supplied will exceed the quantity of labour demanded and there will be Unemployment

D. The quantity of labour demanded will exceed the quantity of labour supplied and there will be a labour shortage

2334. The Marginal Revenue Product is likely to be wage inelastic if ?
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A. It is relatively easy to substitute capital for labour

B. There are many substitutes for the final product

C. Labour costs are a high percentage of total costs

D. Demand for the final product is price inelastic

2335. The greatest advantage of a negative income tax is that it ?
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A. ensures that the poor actually receive what the government thinks they need does all these answers.

B. generates a smaller disincentive to work than most alternative anti-poverty policies.

C. would not provide benefits to lazy people

D. reduces the cost to the government of fighting poverty

2336. Which of the following is an example of a public good ?
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A. Whales in the ocean

B. hot dogs at a picnic

C. national defense

D. apples on a tree in a public park

2337. Horizontal equity holds that ?
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A. those with equal ability to pay should bear unequal tax burdends.

B. those who benefits the most from government services should bear the higher tax burden.

C. those with equal ability to pay should bear equal tax burdens.

D. those who benefit the most from government services should have the greatest voice in determining what gets produced

2338. A period of unemployment due to recession will ?
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A. increase a workers current income and permanent income

B. reduce a workers current income but not necessarily their permanent income

C. affect neither the current nor the permanent income of a worker

D. reduce a workers permanent income but not their current income

2339. Assuming that leisure is a normal good. if an individuals labour supply curve is backward bending then the ?
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A. income effect and the substitution effects are equal

B. substitution effect outweighs the income effect

C. income effect is zero

D. income effect outweighs the substitution effect
2340. In a competitive market, which of the following is least, likely to be the source of a persistent discriminatory wage differential ?
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A. the government

B. All of these answers could be source of a persistent discriminatory wage differential

C. the customer

D. the employer
2341. American labor unions have maintained that U.S multinational corporations have been ?
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A. exporting American jobs by investing overseas

B. importing cheap foreign workers by shifting U.S investment overseas

C. exporting American jobs by keeping investment in the U.S

D. importing cheap foreign workers by keeping U.S investment at home

2342. The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the ?
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A. sun spot theory

B. Solow theory

C. New classical theory

D. multiplier accelerator model
2343. The most important source of wage differentials are ?
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A. unionization

B. relative danger

C. skills

D. regional variation

2344. All of the following would tend to increase a workers wage except ?
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A. having a greater amount of natural ability

B. doing a job that is fun

C. working harder

D. Working the night shift

E. more education

2345. If the economy is in the recessionary 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. is static; low; rises; deficit

B. falls; rises; falls; surplus

C. rises; falls; rises; deficit

D. falls; falls; falls; surplus

2346. If the real wage is too high in the labour market ?
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A. It will automatically adjust in the short run to bring equilibrium

B. The quantity demanded of labour is higher than the quantity supplied

C. The quantity demanded of labour is lower than the quantity supplied

D. The quantity demanded of labour equals the quantity supplied
2347. Top footballers tend to earn more than lecturers because ?
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A. lecturers are lazy

B. footballers give more entertainment

C. top footballers are relatively scarce in relation to lecturers

D. the labor markets are imperfect

2348. Country B has the comparative advantage in ?
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A. Wine

B. Beer

C. Both wine and beer

D. Neither wine nor beer

2349. The high foreign exchange value of the U.S dollar in the early 1980s can best be explained by ?
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A. market expectations of rising inflation in the United States

B. American tourists overseas finding costs increasing

C. additional investment funds made available from overseas

D. lack of investor confidence in U.S fiscal policy

2350. The public Sector Net Cash Requirement (PSNCR) is ?
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A. A measure of the countrys budget position

B. A measure of the governments monetary stance

C. A measure of the countrys total debt

D. A measure of the countrys trade position