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PPSC Economics Chapter 11 Assess Your Basics MCQs With Answers
Question # 1
The main cause of different relative costs between countries are.
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Relative factors competition
Relative factor mobility
Relative factor substitution
Relative factor endowments
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Question # 2
The multiplier is calculated as.
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1(1-MPC)
1/MPS
1/MPC
a or b
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Question # 3
Skilled labour is relatively scarce because.
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There are too few teachers
Too few student places in higher education
It is costly to acquire human capital
Teachers salaries are too low
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Question # 4
If as result of householder wish to save more there is a change in equilibrium income and no change in equilibrium saving this as an example of.
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Market imperfection
The law of diminishing returns
The paradox of thriff
Market failure
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Question # 5
Aggregate demand in an economy trading internationally with a government sector can be written s.
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AD = C+1
AD = C + 1+ G
AD = C +1+G+X+Z
AD+C+1+G+X-Z
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Question # 6
In the EMU a country's competitiveness can change because of.
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Interest rate adjustment
Central bank intervention i the forex
Domestic wage and price adjustment
Devaluations
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Question # 7
A tariff causes domestic firms to __________ and consumers to
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Overproduced, under consume
overproduce , overconsume
Underproduce, under consume
underproduce, overconsume
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Question # 8
The costs of inflation are
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Shoe leather costs
Menu costs
Income redistribution
All of the above
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Question # 9
If the diagram of a line shows that lower values on the vertical scale are associated with higher values on the horizontal scale this is an example of.
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a nonlinear relationship
A positive linear relationship
A scatter diagram
A negative linear relationship
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Question # 10
An allocation is Pareto efficient if no reallocation of resources would make some people_______ whiteout making others
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Worse off, worse off
better off, better off
better off, worse off
equal , unequal
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Question # 11
The Philips curve shows the trade off between ________ and _____
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The inflation rate, interest rates
The inflation rate, the unemployment rate
interest rates, output
Output, employment
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Question # 12
In linear consumption function with a positive slope less that on means that if income increase, consumption will.
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Fall
Not change
Fluctuate
Increase
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Question # 13
A fall in investment demand can result from
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Higher interest rates
Lower expected future profits
More expensive capital goods
All of the above
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Question # 14
Government may contribute to inflationary pressure on account of building up large.
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Numbers of employees
Welfare plans
Budget deficits
Expenditure.
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Question # 15
The business cycle is not transmitted from one country to another through.
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Private sector imports and exports
Economic policy
The duration of compulsory education
Labour supply changes
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Question # 16
A production technique is technically efficient if.
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Output is maximized
Input are minimized
there is no way to make a given output using less of one input and no more of the other inputs.
costs are minimized
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Question # 17
The impossibility of negative gross investment provides a______ to fluctuations in.
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Celling, stock building
Celling, capital prices
floor , output
floor , the capital output ratio
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Question # 18
All of the following represent obstacles to LDC development except.
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Resource scarcity
Low level of investment
Low population
Poor infrastructure
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Question # 19
During periods of rising inflation and rising interest rates we expect the demand for real cash to.
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rise
fall
not change
fluctuate
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Question # 20
In the neoclassical theory of growth a higher saving rate leads to.
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A higher growth rate
A fluctuating growth rate
A lower growth rate
No change in the growth rate
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Question # 21
If one country, with floating exchange states, has higher inflation than its competitors, we would expect its exchange rate to.
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Appreciate
Depreciate
Revalue
be in short supply
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