Question # 1

Quotas are government imposed limits on the ________ of goods trade between countries.

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Prices

Quantity

Revenue

Costs

According to the crowding out effect, a there is a government deficit, the real interest rate will.__________ and investment will_________

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rise ; rise

fall ; rise

rise ; fall

fall ; fall

A straight line downward sloping demand curve implies that as price falls the elasticity of demand.

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Increases

Decreases

Remain the same

None of these

If the autarky price of S were lower in country A than in country B, then if trade were allowed.

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A would likely exports s to B

A would likely import s from B

Neither country would want to trade

None of the above

If there is a prices celling, which of the following is NOT likely to occur.

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Rationing by first come first served

Black markets

Gray markets

Sellers providing goods for free that were formerly not free

Similar to import tariffs, import quotas tend to result in.

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Higher prices and reduced imports

Increasesed government revenue

Increased consumer surplus

Decrease producer surplus

National Income account of Pakistan have registered GDP & GNP as.

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GDP = GNP

GDP < GNP

GDP > GNP

GDP / GNP

A firm's monopolistic position is strengthened by

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low elasticity of demand for its product

High elasticity of demand for its product

Constant elasticity of demand

None of the above

Compared to the case of perfect competition.

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Monopolist is more likely to

Charge a higher price

Produce a lower quantity of the product

All of the above

The central economic problem in an economy refers to.

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The prevalence of unemployment

To allocate scarce resources between competing uses.

Consumers having less money than they would like

ensure that production costs are converted by sales revenue.

Those who argue in favor of import protection generally give the impression that such restricted trade will

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Decrease the level of national security

Provide benefits to some particular industry

Provides benefits to the entire nation

Not yield welfare losses for the nation

An increasingly higher marginal income tax is

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Progressive

Regressive

Proportional

Both b and c

Disposable income is.

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Income less taxes

Income less direct taxes

income less indirect taxes

All of these

Negative taxation refers to.

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Tax rebate

Subsidies

Tax evasion

Tax avoidance

The arrangement were goods imported from trading partners in the developing world are subject to lower tariff rates than good from other countries is referred to as.

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Normal trade relation status.

Most favored nation status

Generalized system of Preferences.

Offshore assembly provisions

Which of the following is automatic stabilizer.

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Unemployment benefits

Spending on education

Defense spending

Net interest

The effect of the most favored nation clause is to

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Eliminate at tariffs between countries.

Increase all tariff rates between countries

Maintain a nondiscriminatory structure of tariffs

Marlein a discriminatory structure of tariffs.

An economy that has achieved full production has achieved

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Both allocative and productive efficiency

Allocative but not productive efficiency

Productive but not allocative efficiency

Neither allocative nor productive efficiency

According to factor price equalization theorem the ______ factor should oppose free trade policies in any given country.

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Abundant

Scarce

Neither

Can't tell without more information

In 25 years Pakistan's Per capital income

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More than doubled

Less than doubled

Did not show more than 70% increase

None of the above

An indifference curve gives

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the actual combination of goods that consumer chooses

the minimum choice of the consumer

the highest level of satisfaction

None of these

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