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
2451. Which of the following is true regarding tradable pollution permits and Pigouvian taxes ?
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A. Pigovian taxes are more likely to reduce pollution to a targeted amount than tradable pollution permits.

B. All of these answers are true

C. To set the quantity of pollution with tradable pollution permits, the regulator must know everything about the demand for pollution rights.

D. Tradable pollution permits efficiently reduce pollution only if they are initially distributed to the firms that can regulator pollution at the lowest cost.

E. Pigouvian taxes and tradable pollution permits create an efficient market for pollution.
2452. If the bank is selling francs for $0.45, then what is the implied franc price of the dollar ?
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A. 2.323

B. 1.999

C. 2

D. 2.222
2453. Consulting firms that use large-scale econometric models to forecast exchange rate movements are engaging in ?
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A. technical analysis

B. nontechnical analysis

C. judgmental analysis

D. fundamental analysis
2454. The idea that the money supply should change to accommodate changes in aggregate demand is associated with the idea of ?
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A. John Maynard Keynes

B. Milton Friedman

C. Margaret Thatcher

D. Ronald Reagan

2455. G. MacDougalls empirical results can be interpreted as ?
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A. evidence against the classical model

B. evidence against the Heckscher-Ohlin model

C. Support for the Ricardian modal

D. Support for the Heckscher-Ohlin model

2456. Suppose that rising U.S income leads to higher sales and profits in the United States This would likely result in ?
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A. decreasing direct investment into the United States

B. decreasing portfolio investment into the United States

C. increasing portfolio investment into the United States

D. increasing direct investment into the United States
2457. In 1971, most countries ?
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A. gave up trying to fix exchange rates formally and began allowing them to be determined essentially by supply and demand

B. adopted a new system of fixed exchange rates

C. returned to the gold standard

D. adopted single internationally accepted currency whose use is limited to international transactions

2458. A profit-maximizing firm will hire labour until _____ equals the _______?
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A. marginal revenue, marginal cost

B. long run marginal revenue, long run marginal cost

C. marginal cost of labor, marginal revenue product

D. labor output ratio, capital output ratio

2459. Because of the J curve effect and partial currency pass through, a depreciation of the domestic currency tends to increase the size of a ?
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A. trade surplus in the short run

B. trade deficit in the short run

C. trade deficit in the long run

D. trade surplus in the long run

2460. The balance of trade can only worsen if income ____ relative to absorption ?
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A. increases

B. does not change

C. None of the above

D. decreases
2461. Which exchange rate mechanism calls for frequent redefining of the par value by small amounts to remove a payments disequilibrium ?
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A. managed floating exchange rates

B. crawling pegged exchange rates

C. dual exchange rate

D. adjustable pegged exchange rates

2462. In autarky, when a community maximizes its standard of living its production point is ?
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A. below the production possibility frontier

B. on the production possibility frontier

C. above the production possibility frontier

D. cant tell without more information

2463. Which exchange rate system involves a leaning against the wind|| strategy in which short-term fluctuations in exchange rates are reduced without adhering to any particular exchange rate over the long run ?
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A. pegged of fixed exchange rates

B. adjustable pegged exchange rates

C. managed floating exchange rates

D. free floating exchange rates

2464. Small nations whose trade and financial relationships are mainly with a single partner tend to utilize ?
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A. pegged exchange rates

B. freely floating exchange rates

C. managed floating exchange rates

D. crawling exchange rates

2465. If the exchange rate is 11 Mexican pesos per U.S dollar, then it takes _______ to buy 1 peso?
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A. $1.10

B. $0.0909

C. $0.10

D. $0.28

2466. An externality is ?
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A. the cost that accrues to the seller in a market

B. the benefit that accrues to the buyer in a market

C. The uncompensated impact of one persons actions on the well-being of a bystander

D. the compensation paid to a firms external consultants.

E. none of these answers

2467. 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. Americas demand for Swiss merchandise rises

B. Switzerlands demand for American merchandise falls

C. Americas demand for Swiss merchandise falls

D. Switzerlands demand for American merchandise rises
2468. Which of the following is not an assumption of Schumpeters stationary state ?
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A. An economy below full employment

B. No savings or technical change

C. Perfect competition

D. No entrepreneurial function is required

2469. Capitalism is an economies system ?
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A. that originated in the United States in the 19th Century

B. based on government intervention in the means of production

C. Where private owners of capital make decisions based on profit

D. that dominated developing economies in the 19 Century

2470. Competitive markets tend to ?
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A. increase labour market discrimination because bigoted employers can charge any price they want in a competitive market to cover the cost of their discrimination

B. reduce labour market discrimination because non-discrimination firms will employ cheaper labour earn more profits and drive discriminating firms out of the market

C. Increase labor market discrimination because some workers can charge more for their services than other workers in a competitive market

D. have no impact on labour market discrimination

2471. The gas-guzzler tax that is placed on new vehicles that are very fuel inefficient is an example of ?
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A. an application of the Coase theorem

B. an attempt to internalize a positive externality

C. an attempt to internalize a negative externality.

D. a tradeable pollution permits.

2472. If two jobs require the same amount of skills and experience the job that pays the most is most likely to be the one that is ?
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A. easy

B. all these answers

C. unpleasant

D. safe

E. fun

2473. 1. The most widely traded currency in the foreign exchange market is the ?
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A. U.S dollar

B. British pound

C. euro

D. Chinese Yuan

2474. Which approach predicts that is an economy operates a full employment and faces trade deficit currency devaluation will improve the trade balance only if domestic spending is cut thus freeing resources to produce exports ?
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A. the monetary approach

B. the absorption approaches

C. the Marshall Lerner approach

D. the elasticities approach

2475. Country A has an absolute advantage in__________?
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A. Product X

B. Product Y

C. Neither X nor Y

D. Both X and Y

2476. In which of the following countries would you expect material lifestyles to be most like those in the United States ?
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A. Nigeria

B. Mali

C. Japan

D. India

2477. Absolute advantage is determined by ?
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A. actual differences in labor production between countries

B. relative differences in labor productivity between countries

C. Both (a) and (b)

D. Neither (a) nor (b)

2478. If the State Bank of Pakistan wished to pursue a tight monetary policy it would ?
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A. buy government securities on the open market

B. sell government securities on the open market

C. reduce the minimum reserve asset ratio.

D. lower interest rates

2479. If Canada runs a balance of payments surplus and exchange rates are floating ?
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A. the value of other currencies will rise relative to the dollar

B. the price of foreign goods will rise for Canadians

C. the dollar will depreciate relative to other currencies

D. the price of foreign goods will become cheaper to Canadians
2480. Net taxes are ?
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A. Taxes paid firms and households to the government minus the transfer payments made to firms and household

B. government expenditures minus government revenues

C. taxes paid by firms and households to the government minus the cost of collecting the taxes

D. Taxes paid by firms and households to the government plus transfer payments made to firm and households

2481. Of the Worlds population what portion lives in developing countries ?
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A. approximately 35%

B. nearly 10 billion people

C. nearly 1 billion people

D. approximately 80%
2482. Suppose there occurs an increase in the Canadian demand for Japanese computers This results in a (an) ?
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A. decrease in the demand for yen

B. decrease in the Supply of yen

C. increase in the demand for yen

D. increase in the supply of yen

2483. Relatively high real interest rates in the United States tend to ?
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A. increase the foreign demand for dollars causing the dollar to appreciate

B. decrease the foreign demand for dollars causing the dollar to appreciate

C. decrease the foreign demand for dollars causing the dollar to depreciate

D. increase the foreign demand for dollars causing the dollar to depreciate

2484. The opportunity cost of one DVD in South Korea is ?
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A. Two tons of steel

B. One ton of steel

C. One-half ton of steel

D. One and one-half tons of steel

2485. Country A has an absolute advantage in ?
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A. Beer

B. Wine

C. Both products

D. neither products
2486. The most efficient pollution control system would ensure that ?
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A. the regulators decide how much each polluter should reduce its pollution.

B. the polluters with the lowest cost of reducing pollution reduce their pollution the greatest amount

C. no pollution of the environment is tolerated

D. each polluter reduces its pollution an equal amount

2487. The price of one countrys currency in terms of another countrys currency is the ?
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A. balance of trade

B. currency valuation

C. terms of trade

D. exchange rate
2488. As the required reserve ratio is decreased the money multiplier ?
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A. remain the same, as long as bank hold no excess reserves

B. could either increase or decrease

C. increase

D. decrease

2489. According to Webers thesis ?
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A. Protestants disapproved of accumulating wealth

B. Protestants failed to restrict extravagance and conspicuous consumption

C. Roman Catholicism expressed its asceticism in a secular vocation

D. capitalism was most advanced in Protestant countries
2490. In a regressive tax system ?
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A. The amount of tax paid increase with income

B. The average rate of tax is constant as income increases

C. The average rate of tax falls as income increase

D. The marginal rate of tax decrease with more income

2491. Under a system of floating exchange rates relatively low productivity and high inflation rates in the United States results in a (an) ?
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A. decrease in the demand for foreign currency a decrease in the supply of foreign currency and a depreciation in the dollar

B. increase 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 and increase in the supply of foreign currency and a appreciation in the dollar

2492. Which of the following characteristics are most likely found in developing countries ?
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A. All of the above

B. large number of people living in poverty

C. high population growth rates

D. very traditional methods of agricultural production

2493. Which of the following is not considered a transaction cost incurred by parties in the process of contracting to eliminate a pollution externality ?
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A. costs incurred due to a large number of parties affected by the externality

B. costs incurred to enforce the agreement

C. costs incurred to reduce the pollution

D. All of these answers are considered transaction costs

E. costs incurred due to lawyers fees

2494. Mercantilism ?
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A. Is the philosophy of free international trade?

B. Was a system of export promotion and barriers to imports practiced by governments?

C. Was praised by Adam Smith in the Wealth of Nations

D. Both (a) and (c)

2495. The purchasing power parity theory has limitations in forecasting exchange rate fluctuations for all of the following reasons except ?
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A. not all products are internationally tradeable

B. inflation effects exchange rates

C. international capital flows affect exchange rates

D. governments sometimes impose trade restrictions such as tariffs and quotas

2496. Which of the following was a socialist country ?
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A. Soviet Union

B. #NAME?

C. India

D. Holland

2497. Which of the following is an example of a Schumpeterian innovation ?
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A. An existing internet provider provides competition to two other providers in Dayton Ohlio

B. An American buying a stock in the Philippines stock market

C. The invention of the Stanley steamer

D. The production and marketing of the Model T Ford in the 19-teens
2498. If export contracts are written in terms of foreign currency and import contracts are denominated in domestic currency a depreciation of the dollar during the currency contract period ?
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A. should increase the dollar value of exports

B. All of the above

C. should not have any effect on the dollar value of U.S imports

D. must increase the balance of trade

2499. Given a two-country world, suppose Japan devalues the yen by 20 percent and west German devalues the mark by 15 percent This result is a (an)?
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A. appreciation in the value of both currencies

B. depreciation in the value of both currencies

C. appreciation in the value of the yen against the mark

D. depreciation in the value of the yen against the mark
2500. The assets market approach is most helpful in explaining ?
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A. why governments change their money supplies

B. why exchange rates remain quite stable

C. short term exchange rate movements

D. long term exchange rate movements