economics MCQs – Page 52

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 Review each marked answer and report any item that may be outdated or unclear.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 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
1021. If Pakistani citizens become less concerned with the future and save less at each real interest rate ?
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A. Real interest rates rise and investment falls

B. Real interest rates fall and investment rises

C. Real interest rates rise and investment rises

D. Real interest rates fall and investment falls

1022. The national security argument for protection is more likely to be valid when ?
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A. The industry is characterized by increasing returns to scale

B. The protected industry provides invaluable goods during periods of war

C. The purpose is to maintain protection for an indefinite time period

D. The economy operates during a recession

1023. State-owned enterprises (SOEs) are also called ?
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A. public enterprises

B. centralized firms

C. market economies

D. government oligopolies

1024. Suppose there is no tariff on imported inputs and the ratio of the value of imported inputs the value of the final product is 0.5 If the nominal tariff rate on the final product is 10 percent, the effective tariff rate equals ?
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A. 10 percent

B. 20 percent

C. 5 percent

D. 15 percent

1025. Intra-industry trade theory ?
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A. Explains why the United States might export and import differentiated versions of the same product such as different types of autos

B. Explains why the United States might export autos and import clothing

C. Assumes that transport costs are very low or do not exist

D. ignores seasonal considerations for agricultural goods

1026. Countries such as ________ that failed to adjust to a persistent external disequilibrium were more vulnerable to poverty displacement and even war ?
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A. Singapore and Malaysia

B. Japan and Korea

C. Brazil and Argentina

D. Algeria and Yugoslavia
1027. If the Pakistani government runs a budget surplus there is ?
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A. an excess of government receipts over government spending.

B. an equality of government spending and receipts.

C. a surplus of government workers.

D. an excess of government spending over government receipts.

1028. S = Savings, I = domestic investment, X = exports of goods and services, and M = imports of goods and services Which of the following is true ?
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A. S + I = X + M

B. S = I (X+M)

C. S I = X = M

D. S-I = X/M

1029. According to Supply-side economists. if taxes are cut so that people have an increased incentive to work and businesses have an increased incentive to invest ?
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A. aggregate supply will increase will increase aggregate demand will decrease and the price level will decrease

B. aggregate supply will increase will increase aggregate output will increase and the price level will decrease

C. aggregate supply will increase will increase aggregate output will increase and the price level will increase

D. both aggregate supply and demand will increase will increase and the price level will increase

1030. If the cross elasticity of demand is -2 ?
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A. The products are complements and demand is cross price elastic

B. The products are substitutes and demand is cross price elastic

C. The products are substitutes and demand is cross price inelastic

D. The products are complements and demand is cross price inelastic

1031. If demand is __________ then price cuts will _________ spending?
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A. elastic; increase

B. elastic, decrease

C. none of the above

D. inelastic; increase

1032. Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers allow the economy to adjust to the long run natural rate on its own, ?
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A. People will reduce their price expectations and the short run aggregate supply will shift right

B. People will raise their price expectations and the short run aggregate supply will shift left

C. People will raise their price expectations and aggregate demand will shift left

D. People will reduce their price expectations and aggregate demand will shift right

1033. Firms are assumed to ________ costs and to ________ profits?
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A. pay, make

B. incur, desire

C. minimize, maximize

D. charge earns

1034. 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. elastic

B. inelastic.

C. perfectly elastic

D. unitarily elastic

1035. According to the interest rate effect aggregate demand slopes downward (negatively) because ?
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A. lower prices increase money holdings decrease lending interest rates rise, and investment spending falls

B. lower prices reduce money holdings increase lending interest rates fall, and investment spending increase

C. lower prices increase the value of money holding and consumer spending increases

D. lower prices decrease the value of money holdings and consumers spending decreases

1036. Refer to Exhibit 4. If there is no tax placed on the product in this market total surplus is the area ?
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A. A + B + C + D + E + F

B. A + B + C + D

C. E + F

D. B + C + E + F

1037. According to the wealth effect aggregate demand slopes downward (negatively) because ?
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A. lower prices increase the value of money holding and consumers spending increase

B. lower prices increase money holding decrease lending, interest rates rise and investment spending falls

C. lower prices reduce money holding increase lending, interest rates fall and investment spending increase

D. lower prices decrease the value of money holding and consumers spending decrease

1038. If government spending exceeds tax collections?
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A. there is a budget deficit

B. There is a budget surplus

C. None of these answers

D. private saving is positive

1039. Most tariffs have ?
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A. only revenue effects

B. only protective effects

C. Both protective and revenue effects

D. neither protective or revenue effects

1040. National Saving (or just saving) is equal to ?
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A. GDP government purchases

B. none of these answers

C. investment + consumption expenditures

D. private saving + public saving