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
2551. Skilled labor is relatively scarce because ?
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A. teachers salaries are too low

B. it is costly to acquire human capital

C. too few student places in higher education

D. there are too few teachers

2552. Suppose that the United Kingdom devalues the pound if both exports and imports are written in terms of pounds then the United Kingdom balance of trade during a currency contract period ?
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A. improves

B. falls for a while before increasing

C. worsens

D. is unaffected
2553. Roberto and Thomas live in a university hall of residence Roberto values playing loud music at a value of 100. Thomas values Pease and quiet at a value of 150. Which of the following statements is true ?
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A. It is efficient for Roberto to stop playing loud music regardless of who has the property right to the level of sound

B. It is efficient for Roberto to stop playing loud music only if Thomas has the property right to peace and quiet

C. It is efficient for Roberto to stop playing loud music only if Roberto has the property right to play loud music

D. it is efficient for Roberto to continue to play loud music

2554. Based on Nafziger and Auvinens study high unemployment rates ?
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A. #NAME?

B. represent a vast underutilization of human resources

C. are potential source of social unrest and political discontent

D. are associated with middle age rural uneducated males

2555. The relationship between the exchange rate and the prices of tradable goods is known as the ?
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A. monetary theory

B. asset markets theory

C. purchasing power parity theory

D. balance of payments theory

2556. According to the principle of comparative advantage ?
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A. Japan should export steel and DVDs

B. Japan should export steel

C. South Korea should export steel and DVDs

D. South Korea should export steel
2557. Tradable pollution permits ?
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A. set the price of pollution.

B. determine the demand for pollution rights.

C. reduce the incentive for technological innovations to further reduce pollution.

D. Set the quantity of pollution
2558. A primary reason that explains the appreciation in the value of U.S dollar would be ?
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A. lack of investor confidence in U.S money policy

B. high interest rates in the United States

C. high inflation rates in the United States

D. large trade surpluses for the United States

2559. Under a system of floating exchange rates the pound would depreciate in value if there occurs ?
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A. Price inflation in the United States

B. falling interest rates in Britain

C. a decrease in the British money supply

D. an increase in U.S real income

2560. Entrepreneurship is the ?
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A. technique to manage raw materials efficiently

B. resource coordinating other productive resources

C. blueprint on how to manage the labor force

D. residual of a production function

2561. The earliest statement of the principle of comparative advantage is associated with ?
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A. David Ricardo

B. Eli Heckscher

C. Berti IOhlin

D. Adam Smith

2562. If a Big Mac hamburger sells for the same dollar value in New York as in London then ?
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A. the inflation rate in each country will necessarily equal 1 percent

B. purchasing power parity holds

C. the exchange rates are said to be fixed pegged to each other

D. the inflation rate in each country will necessarily equal zero

2563. According to the human capital view of education ?
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A. can make any worker into a superstar

B. has no impact on the human capital of workers?

C. increases human capital and the wages of workers

D. only helps firms sort workers into high ability and low-ability workers.

2564. If a country has a bowed out (concave to the origin) production possibility frontier then production is said to be subject to ?
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A. increasing opportunity costs

B. constant opportunity costs

C. first increasing and then decreasing opportunity costs

D. decreasing opportunity costs

2565. A positive externality generates ?
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A. a social cost curve that is above the supply curve (private cost curve) for a good

B. a social value curve that is below the demand curve (private value curve) for a good

C. none of these answers

D. a social value curve that is above the demand curve (private value curve) for good
2566. Which of the following could be considered critical s in development economics ?
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A. What are the major theories of economic development

B. How do the poorest 2/3 of the world live?

C. All of the above are correct

D. what factors affect labor skills in the third world?

2567. Assume that the United States faces a percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory over the long run the dollar would be expected to ?
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A. e of the above

B. depreciate by 8 percent against the yen

C. remain at its existing exchange rate

D. appreciate by 8 percent against the yen

2568. According to the Classical theory of international trade ?
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A. Only countries with high wages will import

B. Only countries with low wages will export

C. Countries with high wages will have higher prices

D. All of the above are false
2569. If countries were to trade along the lines of comparative advantage ?
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A. A would export X to B

B. None of the above

C. Neither country would want to trade

D. A would export Y to B
2570. Which of the following are not third-world regions ?
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A. Africa

B. Asia

C. Australia

D. Latin America

2571. The shorter the ______ pass through period the ______ the desirable BOT effects of evaluation on quantities traded will appear ?
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A. sooner

B. bigger

C. longer

D. smaller

2572. A fiscal expansion in the UK ?
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A. tends to appreciate the pound sterling

B. does not affect the price of the pound sterling

C. tends to depreciate the pound sterling

D. has no predictable effect on the price of the pound sterling?

2573. For the United States suppose the annual interest rate on government securities equals 12 percent while the annual inflation rate equals 8 percent For Japan the annual interest rate on government securities equals 10 percent while the annual inflation rate equals 5 percent the above variables would cause investment funds to flow from ?
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A. The Japan to United States, causing the dollar to appreciate

B. The Japan to United States, causing the dollar to depreciate

C. The United States to Japan causing the dollar to appreciate

D. The United States to Japan causing the dollar to depreciate
2574. To internalize a positive externality an appropriate public policy response would be to ?
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A. have the government produce the good until the value of an additional unit is zero

B. tax the good

C. ban the good creating the externality

D. subsidize the good
2575. The difference between bid (buying) rates and ask (selling) rates is called the ?
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A. forward transaction

B. spread

C. profit

D. arbitrage

2576. With international trade, what would be the maximum number of DVDs that Japan would be willing to export to South Korea in exchange for each ton of steel ?
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A. Three DVDs

B. Four DVDs

C. One DVD

D. Two DVDs

2577. The reduction or covering of foreign exchange risk is called ?
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A. hedging

B. arbitrage

C. intervention

D. speculation

2578. The theory of international exchange that holds that exchange rates adjust to offset differences in countries inflation rates in the ?
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A. trade feedback theory

B. J-curve theory

C. price feedback theory

D. purchasing power parity theory
2579. Due to Japans high saving rate, suppose that the Japanese invest abroad. This investment may result in a/an _______ of the Japanese yen and therefore a for Japan?
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A. depreciation; trade deficit

B. appreciation; trade surplus

C. appreciation; trade deficit

D. depreciation; trade surplus
2580. The analysis considers the ability of domestic and foreign price of adjust to devaluation in the short run ?
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A. currency contract period

B. pass through

C. absorption

D. adjustment mechanism

2581. The relative price (MRT) of T in terms of S is ?
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A. 2-Jan

B. 2

C. 1000

D. 500

2582. According to the Coase theorem, private parties can solve the problem of externalities if ?
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A. There are a large number of affected parties.

B. there are no transaction costs.

C. the party affected by the externality has the initial property right to be left alone.

D. each affected party has equal power in the negotiations.

E. the government requires them to negotiate with each other

2583. The negative effect on the economy that occurs when average tax rates increase because taxpayers have moved into higher income brackets during an expansion is ?
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A. fiscal drag

B. the Laffer curves

C. bracket creep

D. debt burden

2584. To internalize a negative externality an appropriate public policy response would be to ?
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A. have the government take over the production of the good causing the externality

B. tax the good

C. subsidize the good

D. ban the production of all goods creating negative externalities

2585. Empirical evidence regarding in the effects of currency depreciation on the balance of trade indicates that?
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A. no strong generalization is possible

B. depreciation has no effect on the trade balance

C. depreciation generally hurts the trade balance

D. depreciation generally improves the trade balance

2586. Suppose that Boeing is to receive payment in euros in 6 month and wants to engage in hedging the firm would _______ euros on the 6-month forward market in order to protect itself from a/an of the euro?
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A. buy; depreciation

B. sell; appreciation

C. buy; appreciation

D. sell; depreciation
2587. Which example of market expectations causes the dollar to appreciate against the yen expectations that the U.S economy will have ?
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A. higher inflation rates than japan

B. more rapid money supply growth than japan

C. higher future interest rates than Japan

D. faster economic growth than Japan

2588. According to William Baumol under oligopolistic competition among large, high tech business firms. innovation has ?
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A. limited the expansion of firms

B. maintained the relationship between firms and their clients

C. replaced price as the important

D. created stationary economies of scale

2589. Country B 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

2590. Suppose an industry emits a negative externality such a pollution and the possible methods to internalize the externality are command-and-control policies, pigovian taxes, and tradable pollution permits. If economists were to rank these methods for internalizing a negative externality based on efficiency ease of implementation and the incentive for the industry to further reduce pollution in the future, they would probably rank them in the following order (from most favored to least favored) ?
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A. tradable pollution permits command-and-control policies, Pigovian taxes.

B. tradable pollution permits, Pigouvian taxes, command-and-control policies

C. command-and-control policies, tradable pollution permits, Pigovian taxes.

D. Pigouvian taxes, command-and-control policies, tradable pollution permits.

E. They would all rank equally high because the same result can be obtained from any one of the policies

2591. Which country is not a transitional economy ?
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A. Mexico

B. Russia

C. china

D. Hungary

2592. If Hong Kong and Taiwan have identical production possibilities curves that are subject to increasing opportunity costs ?
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A. Trade would depend on difference in demand conditions

B. Trade would depend on the use of different currencies

C. Trade would depend on economies of large-scale production

D. There would be no basis for gainful trade

2593. Which of the following countries are not newly industrialized countries (NICs) ?
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A. Singapore

B. North Korea

C. Taiwan

D. Hong kong

2594. Given free trade, small nations tend to benefit the most from trade since they ?
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A. Realize terms of trade lying near the MRTs of their large trading partners

B. Are more productive than their large trading partners

C. Are less productive than their large trading partners

D. Have demand preferences and income levels lower than their large trading partners

2595. The essential feature of a _______ is that it immediately fixed the rate at which a specified amount of one currency is to be delivered in exchange for a specific amount of another at a future date ?
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A. money contract

B. spot contract

C. bid contract

D. forward contract
2596. Imagine there is no tax on income up to Rs 1000 after that there is a tax of 505 what is the average tax rate on an income of Rs 20,000 ?
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A. Rs 10000

B. Rs 50000

C. 20%

D. 25%

2597. Speculators in foreign exchange markets do all of the following except ?
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A. attempt to buy currency at a low price and later resell that currency at a higher price

B. bear risk as they attempt to ____ beat the market||

C. Simultaneously buy a currency at a low price and sell that currency at a higher price, making a riskless profit

D. attempt to profit by trading on expectations about future currency prices

2598. Many developing countries instituted import substitution policies because ?
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A. the price of goods they exported were increasing

B. their terms of trade were improving

C. their terms of trade were deteriorating

D. the prices of the goods they imported were falling

2599. Why has the growth of the German and Japanese economies after World War|| not been repeated in LDCs ?
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A. low interest rates

B. human capital or technical skills were lacking

C. real domestic currency depreciation exists

D. political instability inhibits world-wide investment

2600. Effective branding will tend to make ?
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A. Supply more income elastic

B. Demand more income elastic

C. Demand more price inelastic

D. Supply more price inelastic