PPSC Economics Topic 11 MCQS Test Preparation

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MCQ's Test For PPSC Economics Topic 11 Assess Your Basics

Try The MCQ's Test For PPSC Economics Topic 11 Assess Your Basics

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PPSC Economics Topic 11 Assess Your Basics

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Question # 1

The impossibility of negative gross investment provides a______ to fluctuations in.

Question # 2

The level of the equilibrium exchange rate offsets international difference in.

Question # 3

When a market is contestable , incumbent firms must.________ to avoid the entry of new competitors.

Question # 4

The primary function of a bank is to.

Question # 5

In Nash equilibrium each player chooses the best strategy.

Question # 6

We cannot say whether one allocation of resources is better than another allocation because.

Question # 7

Fiscal policy is weak under floating exchange rates as fiscal expansion.

Question # 8

One of the transmission mechanism of monetary policy is through consumer house hold wealth.___________ and consumption.

Question # 9

A person who is made redundant because of the contraction of an industry is a victim of.

Question # 10

Real GNP is a crude measure of national welfare because it excludes.

Question # 11

The retail price index is used to.

Question # 12

Women and non whiles on average receive lower comes than white men because.

Question # 13

Under floating exchange rates, expectations of higher interest rates are likely to cause an __________ of the exchange rate.

Question # 14

M4 is a _________ measures of money and includes deposits at both _____________ and

Question # 15

The growth rate of economics tend to converge because._________ is easier when capital per worker is low and because of_____

Question # 16

An upward shift in marginal cost ___________ output and an upward shift in _____ marginal revenue __ output.

Question # 17

In the short run the level of floating exchange rates is determined mainly by.

Question # 18

The real value can be derived from a nominal value by

Question # 19

If one country, with floating exchange states, has higher inflation than its competitors, we would expect its exchange rate to.

Question # 20

When real income increases, other things equal we fan expect the demand for real money holdings to.

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Economics
11th Chapter

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Sr.# Question Answer
1 If my neighbor burns garden waste causing my house to fil with smoke this is an example of.
A. A production extremality
B. A second best solution
C. Transaction costs
D. A consumption externality
2 If a firm not operating at the output necessary to achieve al scale economies it has not achieved its.
A. Efficient scale
B. Average efficient scale
C. Maximum efficient scale
D. Minimum efficient scale
3 M4 is a _________ measures of money and includes deposits at both _____________ and
A. Narrow, banks, building societies
B. Wide, banks, insurance companies
C. narrow, banks, insurance companies
D. Wide, banks, building societies.
4 In the UK mergers can be referred to the competition commission of they create a firm with _______ of the market.
A. 15%
B. 20%
C. 25%
D. 30%
5 Starting from a balanced budget, for a given tax rate an increase in income will cause the government budget to.
A. Move into surplus
B. Move into deficit
C. Remain unchanged
D. None of these
6 The level of the equilibrium exchange rate offsets international difference in.
A. Comparative advantage
B. Absolute advantage
C. Opportunity cost
D. Relative costs
7 Real business cycle are cycles in
A. Potential output
B. Actual output
C. Real output
D. International trade
8 The Philips curve shows the trade off between ________ and _____
A. The inflation rate, interest rates
B. The inflation rate, the unemployment rate
C. interest rates, output
D. Output, employment
9 Possible causes of involuntary unemployment are
A. Minimum wage agreements
B. Trade unions
C. Scale economies
D. All of the abvoe
10 Bank create money by
A. Printing it
B. Issuing debit cards
C. Accepting chequeens
D. Lending out part of their deposits
11 International specialization takes place because of.
A. Differences in technology
B. Differences in factor endowments
C. Scale economies
D. All of the above
12 In an economy, measuring total value (1) added, total value(2) spending on final goods and 3 total factor earning gives the result that.
A. 3>2>1
B. 3 +2>1
C. 3<2<1
D. Any measure can be larger or smaller than any other
13 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.
A. a nonlinear relationship
B. A positive linear relationship
C. A scatter diagram
D. A negative linear relationship
14 import substitution is the replacement of ________ by domestic production under the protection of.
A. exports, subsidies
B. Exports, patents
C. imports, high tariffs or import quotes
D. Imports, subsidies
15 If the consumption of a good by one person does not reduce the quantity available by other and nobody cna be easily excluded from consumption, we are referring to a.
A. Private good
B. Merit good
C. Public good
D. Abundant good
16 The most important source of wage differentiate are.
A. Reginal variation
B. Unionization
C. Relative danger
D. Skills
17 Real business cycle theories suggest that _____ to correct departures from the desired growth path.
A. There is a role of fiscal policy
B. There is a role for monetary policy
C. There is a role for supply side policies
D. There is no case for stabilizing output over the business cycle.
18 Real business cycle theory suggests that __________ not important in explaining short term fluctuations around actual output.
A. aggregate supply is
B. aggregate demand is
C. Potential output is
D. Real variables are
19 During periods of rising inflation and rising interest rates we expect the demand for real cash to.
A. rise
B. fall
C. not change
D. fluctuate
20 Monetarists believe that a reduction in _____ can be achieved by reducing.
A. Unemployment, prices
B. Inflation, wages
C. Unemployment, wages
D. Inflation, the quantity of nominal money

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