economics MCQs – Page 48

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 Review each marked answer and report any item that may be outdated or unclear.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 economy 2. profit maximizing under perfect competition and monopoly 3. application of economics 4. the aggregate demand aggregate supply model 5. surplus 6. money interest rates and output 7. average and total cost 8. stabilization adjustment reform and privatization 9. risks and diversification efficient market hypothesis 10. the phillips curve 11. supply and demand 12. capital formation investment choice information technology and technical progress 13. aggregate supply unemployment and inflation 14. elasticity 15. comparative gdp 16. roots of modern macroeconomics 17. production factors 18. poverty malnutrition and income inequality 19. trade regulations and industrial policies 20. monetary union 21. exchange rate systems and currency crises 22. economic development in historical perspective 23. exchange rate determination 24. monopoly competition 25. the balance of payments 26. inflation productivity 27. macroeconomic issues and analysis 28. employment migration and urbanization 29. macroeconomic policy tools 30. supply side policies 31. exchange rate adjustments and the balance of 32. miscellaneous 33. taxation 34. trade policies for the developing nations 35. markets efficiency and the public interest 36. the external debt and financial crises 37. budget deficits and the trade balance 38. alternative theories of the firm 39. public goods 40. the meaning and measurement of economic development 41. characteristics and institutions of developing countries 42. agriculture irrigation system of pakistan 43. education health and human capital 44. economic problems of developing countries 45. theories of economic development 46. basic of economics 47. consumer theory vs real consumers 48. applied microeconomics 49. long term economic growth 50. externality internality 51. fiscal and monetary policy 52. prices wages taxes 53. balance of payments aid and foreign investment 54. international factor movements and multinational corporations 55. entrepreneurship organization and innovation 56. the international economy and globalization 57. population and development 58. non tariff trade barriers 59. foundations of modern trade theory 60. global economic development 61. market 62. rural poverty and agricultural transformation 63. regional trading arrangements 64. foreign exchange 65. introduction to economics 66. world economy miscellaneous 67. sources of comparative advantage 68. natural resources and the environment toward sustainable development 69. monopoly 70. asymmetric information 71. income inequality 72. labour market 73. tariffs 74. development planning and policy making the state and the market 75. oligopoly 76. industrial development 77. costs supply and perfect competition 78. human capital 79. monetary fiscal and incomes policy and inflation 80. stocks

941. Suppose the economy is initially in long-run equilibrium Then suppose there is an increase in military spending due to rising international tensions According to the model of aggregate demand and aggregate supply what happens to prices and output in the short run ?
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A. Price fall; output rises

B. Price rise; output fall

C. Price rise; output rise

D. Price fall; output falls

942. A movement along the demand curve to the left may be caused by ?
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A. a rise in the price of inputs

B. a fall in the number of substitute goods

C. a decrease in supply.

D. a rise in income

943. When the market operates without interference, price increases will distribute what is available to those who are willing and able to pay the most. This process is known as ?
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A. Quantity setting

B. price fixing

C. price rationing

D. quantity adjustment.

944. The price of burgers increase by 22% and the quantity of burgers demanded falls by 25% This indicates that demand for burgers is ____________?
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A. inelastic.

B. unitarily elastic

C. perfectly elastic

D. elastic

945. If the world price of steel is $500 a ton a specific tariff $50 is equivalent to an ad valorem tariff of______________?
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A. 5 percent

B. 15 percent

C. 10 percent

D. 20 percent

946. Credit risk refers to a bonds ?
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A. Probability of default

B. dividend

C. Price-earnings ratio

D. tax treatment

947. Wassily Leontief used an input output table in order to test the ?
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A. Ricardian theory of comparative advantage

B. Linder theory of overlapping demand

C. All of the above

D. Heckscher Ohl in theory of comparative advantage

948. Which of the following will NOT cause a shift in the demand curve for compact discs ?
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A. A change in the price of compact discs

B. A change in income.

C. A change in wealth

D. hange in the price of pre-recorded cassette tapes

949. Refer to Exhibit 4. If a tax is placed on the product in this market, producer surplus is the area?
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A. A + B + E

B. D

C. A + B + C + D

D. A

950. Which of the following may constitute the International Monetary Funds conditionality for borrowing?
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A. limiting credit creation and liberalizing trade

B. restraining public sector employment and wage rates

C. government reducing budget deficts

D. . achieving market-clearing price

951. The deadweight cost of the tariff equals ?
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A. $25,000

B. $10,000

C. $50,000

D. $75,000

952. In todays world, most countries impose tariffs ?
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A. only on imports

B. only on exports

C. on both imports and exports

D. on imports exports and nontraded goods

953. According to supply-side economists, as tax rates are reduced, labor supply should increase. This implies that ?
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A. there is no substitution effect when tax rates are changed

B. there is no income effect when tax rates are changed

C. the substitution effect of a wage change is greater than the income effect of a wage change

D. the income effect of a wage change is greater than the substitution effect of a wage change.

954. Adam smiths invisible hand concept suggests that a competitive market outcome ?
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A. maximizes total surplus

B. generates equality among the members of society

C. minimizes total surplus

D. both maximizes total surplus and generates equality among the members of society

955. The appropriate tax rate to consider gauging how much the tax system distorts incentives and decision making is the ?
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A. Proportional tax rate

B. vertical tax rate

C. marginal tax rate

D. average tax rate

E. horizontal tax rate

956. Suppose the price level falls but because of fixed nominal wage contracts the real wage rises and firms cut back on production This is a demonstration of the ?
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A. misperceptions theory of the short-run aggregate supply curve

B. sticky-price theory of the short run aggregate supply curve

C. classical dichotomy theory of the short-run aggregate supply curve

D. sticky-wage theory of the short-run aggregate supply curve

957. An increase in productivity should ?
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A. Lead to a contraction of supply

B. Lead to a higher equilibrium and lower equilibrium quantity

C. Lead to a shift in supply outwards (i.e more supplied at each and every price)

D. Lead to an expansion of supply

958. Internal balance refers to ?
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A. exports minus imports

B. full employment and price stability

C. exports equal to imports

D. monetary policy offsetting fiscal policy

959. Jamil has ten pairs of football boots and saleem has none. A pair of football boots cost Rs50. to produce. If jamil values an additional pair of boots at RS100 and saleem values a pair of boots at Rs40, then the maxime ?
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A. efficiency Saleem should receive the glove

B. Efficiency Jamil should receive the glove

C. equity Jamil should receive the glove

D. consumer surplus both should receive a glove

960. Increased level consumption ?
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A. shift aggregate supply to the right

B. shift aggregate demand to the left

C. shift aggregate supply to the left

D. shift aggregate demand to the right

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