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
2351. If the exchange rate between Swiss francs and British pounds is 5 francs per pound, then the number of pounds that can be obtained for 200 francs equals ?
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A. 60 pounds

B. 80 pounds

C. 20 pounds

D. 40 pounds
2352. The agreements that were reached at the Bretton Woods conferences in 1944 established a system ?
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A. That prohibited governments from intervening in the foreign exchange markets

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

C. 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

D. 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
2353. In order for a market to support superstars it must have which of the following characteristics ?
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A. Every customer must be willing to pay an enormous amount for the product and the product must be a necessity

B. Every customer must want the good supplied by the best producer and the technology must exist for the best producer to supply every customer at low cost

C. Every customer must be indifferent to the price they pay, and the seller must be a competitor in the market for the product

D. It must be involved in professional athletics

2354. 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. cable transfer

B. letter a credit

C. foreign currency option

D. bill of exchange

2355. In autarky equilibrium ?
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A. there is no trade

B. Production equals consumption

C. All of the above

D. Exports equal imports

2356. Which of the following is not a reason why Joe Smith (an American) might participate as a demander in the foreign exchange market ?
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A. his desire to purchase Treasury bills issued by the British government

B. his desire to travel to Europe

C. his desire to open a bank account in Japan

D. his desire to purchase an automobile produced domestically
2357. The government engages in a technology policy ?
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A. to help stimulate private solution to the technology externality

B. to internalize the negative externality associated with industrial pollution

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

D. to internalize the positive externality associated with technology-enhancing industries.
2358. G. MacDougal compared export ratios and labor productivity ratios for the United States and the United Kingdom in order to test the:
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A. Linder theory of overlapping demand all of the above

B. Ricardian theory of comparative

C. Heckscher Ohl in theory of comparative advantage

D. None of these

2359. Under free trade, Canada would not realize any gains from trade with Sweden if Canada ?
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A. Specializes completely in the production of its export good

B. Trade at Swedens marginal rate of transformation

C. Trades at Canadas marginal rate of transformation

D. Specializes partially in the production of its exports goods

2360. Under a pegged exchange rate system which does not explain why a country would have a balance of payments deficit ?
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A. the domestic currency is undervalued relative to other currencies

B. technological advance is superior abroad

C. very high rates of inflation occur domestically

D. foreigners discriminate against domestic products

2361. The response lag of stabilization policy represents ?
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A. the time that it takes for the economy to adjust to the new conditions after a new policy has been implemented

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

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

D. the time that it takes for policy makers to recognize the existence of boom of bust

2362. The franc is said to be selling at a _______ if the spot dollar price is $0.48 and the nine-month forward rate is $0.42 ?
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A. None of these

B. forward premium

C. forward spread

D. forward discount
2363. Disguised unemployed is?
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A. due to capital formation and the level of technology remaining constant.

B. when marginal revenue productivity of labor is zero

C. the rigid factor proportions in LDC agriculture and industry

D. the same as seasonal unemployment of LDC agricultural

2364. The extent to which a change in the exchange rate leads to changes in import and export prices is known as the ?
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A. absorption effect

B. J Curve effect

C. pass through effect

D. Marshall Lerner effect

2365. If the economy grows the governments budget position will automatically ?
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A. Increase with inflation

B. worsen

C. Improve

D. Stay the same

2366. Which of the following is true regarding the earning of attractive versus unattractive workers ?
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A. Attractive people tend to earn less because attractive people are viewed as shallow and more self-absorbed and therefore, as less productive

B. Attractive people tend to earn more because they may actually have a larger value of marginal product

C. Attractive people tend to earn less because attractive people usually have less human capital

D. Attractive people tend to earn more because attractive people usually have greater human capital

2367. International trade is based on the nation that ?
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A. Resources are more mobile internationally that are goods

B. Different currencies are an obstacle to international trade

C. Goods are more mobile internationally than are resources

D. A countrys exports should always exceed its imports

2368. The real effective exchange rate for the U.S dollar ?
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A. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners unadjusted for inflation?

B. reflects only transactions in the currency futures market

C. reflects only the influences of merchandise or real trade on the dollars exchange value

D. is the weighted average of the dollar exchange rate relative to the currencies of important U.S trading partners adjusted for inflation?
2369. For the United States suppose the annual interest rate on government securities equals 8 percent while the annual inflation rate equals 4 percent, For Switzerland the annual interest rate on government securities equal 10 percent while the annual inflation rate equals 7 percent the above variables would cause investment funds to flow from ?
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A. the United States to Switzerland causing the dollar to depreciate

B. the United States to Switzerland causing the dollar to appreciate

C. Switzerland to the United States causing the franc to depreciate

D. Switzerland to the United States causing the franc to appreciate

2370. The least common type of transaction in the foreign exchange is a ?
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A. spot transaction

B. None of the above

C. swap transaction

D. forward transaction
2371. Under a system of floating exchange rates relatively high productivity and low inflation rates in the United States results in a (an) ?
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A. increase in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar

B. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar

C. increase in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar

D. decrease in the demand for foreign currency an increase in the supply of foreign currency and a appreciation in the dollar

2372. Goodharts Law suggests that ?
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A. monetary policy can only be effective if it is a long-term policy

B. controlling one part of the money supply will merely result in that item becoming less important

C. the money supply must only expand at the rate of growth of real national income

D. bad money drives out good

2373. The Relative price (MRT)of S in terms of T i ?
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A. 2

B. 1/2

C. 0

D. 1000

2374. The opportunity cost of one DVD in Japan is ?
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A. Two tons of steel

B. Four tons of steel

C. One ton of steel

D. Three tons of steel

2375. The Protestant Ethic and the Spirit of Capitalism was written by ?
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A. Max Weber

B. Adam Smith

C. Joseph Schumpeter

D. William Baumol

2376. According to the signaling view of the education ?
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A. only helps firms sort workers into high ability and low-ability workers

B. can make any worker into a superstar

C. reduces the wage gap between high-skill and low-skill workers.

D. increases human capital and the wages of workers

2377. The marginal rate of tax paid is ?
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A. Total income / total tax paid

B. Change in income / change in tax paid

C. The total tax paid / total income

D. Change in the tax paid / change in income
2378. Which of the following is not a reason why some workers are paid above the equilibrium wage ?
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A. unions

B. minimum-wage laws

C. beauty

D. efficiency wages

2379. Assume that a Big Mac hamburger cost $3 in the United States 2 pesos in Mexico The implied purchasing power parity exchange rate between the peso and the dollar is ?
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A. 1.67 pesos = $1

B. 0.8 pesos = $1

C. 1.25 pesos = $1

D. 0.67 pesos = $1
2380. John Stuart Mill was the founder of the ?
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A. Theory of reciprocal demand

B. Theory of absolute advantage

C. Theory of mercantilism

D. Theory of comarative advantage

2381. Suppose that U.S dollar depreciates 70 percent against the yen yet Japanese export prices to Americans did not decrease by the full extent of the dollar depreciation. This is best explained by ?
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A. partial currency pass through

B. complete J curve effect

C. complete currency pass through

D. partial J curve effect

2382. Starting from a position where the nations money demand equals the money supply and its balance of payments is in equilibrium its balance of payments would move into a surplus position if there occurred in the nation a (an) ?
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A. increase in the money supply

B. None of the above

C. decrease in the money supply

D. decrease in the money demand

2383. During the era of dollar appreciation from 1981 to 1985 a main reason why the dollar did not fall in value was ?
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A. rising price inflation in the United States

B. a substantial decrease in U.S imports

C. a substantial increase in U.S exports

D. flows of foreign investment into the United States
2384. The exchange value of the U.S dollar is primarily determined by ?
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A. the monetary value of gold held at Fort Knox, Kentucky

B. the number of dollars printed by the U.S government

C. the rate of inflation in the United States

D. the international demand and supply for dollars
2385. The entrepreneur can be viewed as the ?
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A. #NAME?

B. coordinator of other production resources

C. decision maker under uncertainty

D. gap filler and input completer

2386. The unemployment rate is the ?
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A. unemployed divided by employed

B. total employment divided by population

C. labor force divided by population

D. employed plus unemployed divided by labor force
2387. In a supply and demand diagram for Japanese yen, with the exchange rate in dollars per yen on the vertical axis, the demand schedule for yen is drawn sloping ?
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A. horizontal

B. vertical

C. downward

D. upward

2388. Which countries terms of trade improved between 1990 and 2000 ?
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A. Mexico and Sweden

B. Sweden and Spain

C. Sweden and Denmark

D. Mexico and Denmark

2389. Automatic stabilizers act to ______ government expenditures and _______ government revenue during an expansionary period?
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A. decrease; increase

B. decrease; decrease

C. increase; decrease

D. increase; increase

2390. Exchange rate overshooting often occurs because ?
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A. elasticities are smaller in the short run than the long run

B. military spending during military conflicts

C. domestic prices adjust slowly to shifts in demand

D. elasticities are smaller in the long run than the short run

2391. When an individual buys a car in a congested urban area, it generates ?
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A. a technology spillover

B. a negative externality

C. a positive externality

D. an efficient market outcome.

2392. In the presences of purchasing power parity, if one-dollar exchanges for 2 British pounds and if a DVD player costs $400 in the United States then in Britain the DVD player should cost ?
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A. 400 pounds

B. 200 pounds

C. 800 pounds

D. 600 pounds

2393. 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. exchange rates to be insensitive to the differential rates of inflation between countries

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

D. the currencies of relatively high inflation countries to appreciate

2394. Development economics focuses primarily on the poorest ______ of the worlds?
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A. one third

B. 28 percent

C. two thirds

D. 5 percent

E. population
2395. 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. interest arbitrage

B. currency arbitrage

C. long positions

D. short positions

2396. Which of the following could not be considered a major economic system ?
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A. communism

B. socialism

C. None of the above

D. physical quality of life index

E. capitalism

2397. The shift toward imperfectly competitive markets in domestic and international trade the concept of ?
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A. exchange arbitrage

B. trade adjustment assistance

C. official exchange rates

D. complete currency pass through
2398. In aukarky, when a community maximizes its standard of living, its production and consumption point is ?
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A. below the production possibility frontier

B. cant tell without more information

C. On the production possibility frontier

D. above the production possibility frontier

2399. Expansionary monetary policy ?
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A. tends to lead to a depreciation 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 an appreciation of a nations currency

2400. 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