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
2501. The implementation lag for monetary policy is generally ?
comments icon0

A. the same as it is for fiscal policy

B. unrelated to central bank action

C. much shorter than it is for fiscal policy

D. mush longer than it is for fiscal policy

2502. A reflationary (expansionist) fiscal policy could include ?
comments icon0

A. An increase in corporation tax

B. Lower interest rates

C. Increased lending by the banks

D. An increase in discretionary government spending

2503. If the international terms of trade settle at a level that is between each countrys opportunity cost ?
comments icon0

A. There is no basis for gainful trade for either country

B. Both countries gain from trade

C. Only one country gains from trade

D. One country gain and the other country loses from trade

2504. A production function ?
comments icon0

A. is a function of natural resources in a country

B. depicts the relationship between input and output

C. states the relationship between products and income distribution

D. shows the dependency output of the working population

2505. A difference between forward and futures contracts is that ?
comments icon0

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

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

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

D. futures contracts have negotiable delivery dates

2506. In a production function Y = F(L, K,N,E,T) Y is ?
comments icon0

A. capital

B. natural resources

C. prevailing technology

D. national product
2507. Monopoly advantage is usually the result of greater opportunities such as ?
comments icon0

A. #NAME?

B. superior access to training and education

C. access to more economic information than competitors

D. larger firm size

2508. Starting from a position where the nations money demand equals the money supply and its balance of payments is in equilibrium economic theory suggests that the nations balance of payments would move into a surplus position if there occurred in the nation a (an) ?
comments icon0
A. increase in the money demand

B. decrease in the money demand

C. increase in the money demand

D. None of the above

2509. Under adjustable pegged exchange rates, if the rate of inflation in the United States exceeds the rate of inflation of its trading partners ?
comments icon0

A. U.S foreign exchange reserves tend to rise

B. U.S exports tend to rise, and imports tend to fall

C. U.S foreign exchange reserves remain constant

D. U.S imports tend to rise, and exports tend to fall
2510. The simplest explanation based on Lewiss model for rural-urban migration is ?
comments icon0

A. the availability of labor-intensive jobs in urban areas

B. a higher expected income in urban areas

C. better infrastructure in urban areas

D. That people migrate when urban wages exceed rural wages

2511. If Japan runs current account deficit and exchange rates are floating?
comments icon0
A. Japanese exports become less expensive for foreign buyers

B. Japanese imports become less expensive for German buyers

C. Japanese exports become more expensive to foreign buyers

D. Japanese imports become more prestigious to German buyers

2512. Automatic stabilisers act to ____ government expenditures and ____ government revenues during recessions ?
comments icon0

A. decrease; decrease

B. increase: increase

C. decrease; increase

D. increase; decrease
2513. If the marginal rate of tax is 40% and consumers income increase from Rs10,000 to Rs12,000 ?
comments icon0

A. The amount of tax paid will increase by Rs4,000

B. The amount of tax paid will increase by Rs 800

C. The total tax paid will be Rs4,800

D. The amount of tax paid will increase by Rs4,800

2514. The classical trade theories of Smith and Ricardo predict that ?
comments icon0

A. Small countries could obtain of the gains from trade when trading with large countries

B. All of the above

C. Countries will completely specialize in the production of export goods

D. Considerable trade will occur between countries with different levels of technology

2515. The supply of foreign currency tends to be ?
comments icon0
A. upward sloping

B. any of the above

C. downward sloping

D. vertical

2516. According to the Principle of absolute advantage Japan should ?
comments icon0
A. There is no basis for gainful specialization and trade

B. Export steel

C. Export DVDs

D. Exports steel and DVDs

2517. If the relative price (MRT) of S were to increase, then the price line would ?
comments icon0

A. shift out in a parallel fashion

B. shift in a parallel fashion

C. Become steeper

D. Become flatter

2518. Exchange rates that are determined by the unregulated forces of supply and demand are ?
comments icon0

A. fixed exchange rates

B. managed exchange rates

C. pegged exchange rates

D. floating exchange rates
2519. The rise in value of one currency relative to another is ?
comments icon0
A. An appreciation of a currency

B. a debasement of a currency

C. A depreciation of a currency

D. a weakening of a currency

2520. According to the asset market approach increased investor confidence in the Mexican economy would cause the peso to ?
comments icon0
A. appreciated because of an increased demand for peso denominated assets

B. depreciated because of an increased demand for peso denominated assets

C. depreciate because of an increased supply of peso denominated assets

D. appreciate because of an increase supply of peso denominated assets

2521. In autarky, the relative price of X, in terms of Y in A would be ?
comments icon0

A. 1 Y

B. 1/2 Y

C. 4/3 Y

D. 3/4 Y

2522. According to Harris and Todaro, creating urban jobs by expanding industrial output ?
comments icon0

A. will generate more government revenue through urban wages

B. induces government to increase minimum wages

C. is insufficient for solving the urban unemployment problem

D. will generate capital-intensive technologies
2523. When the price of foreign currency (the exchange rate) is above the equilibrium level ?
comments icon0

A. an excess demand for that currency exists in the foreign exchange market

B. the supply of foreign exchange shifts outward to the right

C. an excess supply of that currency exists in the foreign exchange market

D. the supply of foreign exchange shifts backward to the left

2524. A negative externality generates ?
comments icon0

A. a social value curve that is above the demand curve (private value curve) for a good

B. a social cost curve that is below the supply curve (private cost curve) for a good

C. none of these answers

D. a social cost curve that is below the supply curve (private cost curve) for a good

2525. In autarky the relative price of wine, in terms of beer, in Country B is ?
comments icon0

A. 1W = 5B

B. 1W = 4 1/2B

C. 1W = 3B

D. 1W = 6B

2526. The terms of trade is given by the prices ?
comments icon0

A. Paid for all goods exported by the home country

B. Received for exports and paid for imports

C. Received for all goods exported by the home country

D. Of primary products as opposed to manufactured products

2527. The analysis considers the ability of domestic and foreign price of adjust to devaluation in the short run ?
comments icon0

A. absorption

B. adjustment mechanism

C. pass through

D. currency contract period

2528. Fiscal drag occurs when ?
comments icon0
A. Tax bands do not increase with inflation

B. Tax rates move inversely with inflation

C. Tax banks increase with inflation

D. Government spending falls to reduce aggregate demand

2529. The asset market approach views exchange rates as being determined mainly by ?
comments icon0

A. the use of import tariffs and quotas by governments

B. efforts of investors to balance their portfolios among financial assets denominated in different currencies

C. the relative growth rate of national output between countries

D. the current account balance of each country

2530. By controlling the monetary base economists mean ?
comments icon0

A. controlling the money multiplier

B. making banks keep a certain % of their assets as M0

C. not allowing commercial banks to issue notes and coins

D. restricting the amount of cash in circulation

2531. Fiscal Policy refers to ?
comments icon0

A. The actions of the central bank in controlling the money supply

B. The government regulation of financial intermediaries

C. The governments attitude to taxation

D. The spending and taxing policies used by the government to influence the economy
2532. If Swedens currency depreciates relative to Norways currency ?
comments icon0

A. Norways exports goods become cheaper to Swedens residents

B. Swedens export goods become cheaper to Norways residents

C. Swedens export goods become cheaper to Swedens residents

D. Norways export goods become more expensive to Norways residents

2533. Over-funding is when the State Bank of Pakistan ?
comments icon0

A. buys government securities on the open market

B. sells more government bonds than are required to finance the PSBR

C. sells government securities on the open market

D. sells less government bonds than are required to finance the PSBR

2534. Which of the following professionals is most likely to be able to generate the income of a superstar ?
comments icon0

A. the best professor

B. the best medical doctor

C. All of these answers participate in markets that could generate a superstar

D. The best accountant

E. the best writer
2535. Riskless transactions to take advantage of profit opportunities due to a price differential or a yield differential in excess of transaction costs are called ?
comments icon0

A. differential actions

B. forward transactions

C. cash transaction

D. arbitrage
2536. Small nations with more than one major trading partner tend to peg the value of their currencies to ?
comments icon0

A. a single currency

B. gold

C. a basket of currencies

D. silver

2537. Country A has the comparative advantage in ?
comments icon0
A. Wine

B. Beer

C. Both wine and beer

D. Neither wine nor beer

2538. If a country has a liner (downward sloping) production possibilities frontier, then production is said to be subjected to ?
comments icon0

A. decreasing opportunity costs

B. constant opportunity costs

C. first increasing and then decreasing opportunity costs

D. increasing opportunity costs

2539. IF when cost $4 per bushel in the United States and 2 pounds per bushel in Great Britain then in the presence of purchasing power parity the exchange rate should be ?
comments icon0

A. $50 per pound

B. $1.00 per pound

C. $8.00 per pound

D. $2.00 per pound
2540. Which exchange rate mechanism in intended to insulate the balance of payments from short-term capital movements while providing exchange rate stability for commercial transactions ?
comments icon0

A. adjustable pegged exchange rates

B. crawling pegged exchange rates

C. managed floating exchange rates

D. dual exchange rates
2541. G. MecDougall showed in his tests that ?
comments icon0

A. Labor productivity ratios and export ratios were not associated with each other

B. relatively higher U.S labor productivity was associated with relatively higher U.K export ratios

C. None of the above

D. relatively high U.K labor productivity was associated with relatively higher U.K export ratios
2542. The largest volume of foreign exchange trading takes place in ?
comments icon0

A. USA

B. Germany

C. United Kingdom

D. China

2543. Suppose Canada and Switzerland were the only two countries in the world There exists an excess supply of Swiss francs on the foreign exchange market This suggests that ?
comments icon0

A. the Canadian current account balance is in equilibrium

B. the Canadian current account balance is in surplus

C. the Swiss current account balance is in equilibrium

D. the Swiss current account balance is in deficit
2544. The exchange rate is kept the same across geographically separate markets by ?
comments icon0

A. government regulation

B. speculation

C. hedging

D. arbitrage
2545. 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 ?
comments icon0

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

2546. Policies to reduce factor price distortion include?
comments icon0

A. Setting market-clearing exchange rates

B. Encouraging small-scale industry

C. #NAME?

D. Decreasing subsidies to capital investors

2547. The fall in value of one currency relative to another is ?
comments icon0

A. a floating of a currency

B. an appreciation of a currency

C. a depreciation of a currency

D. a strengthening of a currency

2548. A negative externality (that has not been internalized) causes the ?
comments icon0

A. equilibrium quantity to be either above or below the optimal quantity

B. equilibrium quantity to equal the optimal quantity

C. optimal quantity to exceed the equilibrium quantity.

D. equilibrium quantity to exceed the optimal quantity
2549. A positive externality (that has not been internalized) caused the ?
comments icon0

A. equilibrium quantity to be either above or below the optimal quantity

B. equilibrium quantity to exceed the optimal quantity

C. optimal quantity to exceed the equilibrium quantity

D. equilibrium quantity to equal the optimal quantity

2550. Suppose that a Swiss television set that costs 400 francs in Switzerland cost $200 in the United States. The exchange rate between the franc and the dollar is ?
comments icon0

A. $2 per franc

B. $3 per franc

C. 2 francs per dollar

D. 1 franc per dollar