PPSC Economics Topic 11 MCQS Test Preparation

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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

In the short run, the supply of capital is _______ and in the long run iwll depend on.

Question # 2

Floating exchange rates are __ in the short run

Question # 3

Positive cross elasticities suggest that goods are ______ and negative cross elasticities that goods are.

Question # 4

The long run Philips curve is _________ at the ______

Question # 5

If banks and the private sector decide to hold less cash the money multiplier will be.

Question # 6

If demand is _______ then price cuts will ________ spending.

Question # 7

Nominal GNP measures income

Question # 8

Perfect international capital mobility suggests that international funds will be responsive to _______ differentials.

Question # 9

In the ERM, each country fixed ___ against each other ERM participant collectively the group._____ against the rest of the world.

Question # 10

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

Question # 11

A competitive firms demand curve is.

Question # 12

The AD schedule indicates that______ inflation is associated with______ output.

Question # 13

Output fell sharply in the transition economies because.

Question # 14

The opportunity cost of a student is.

Question # 15

Economics assumes that people consume goods and services to achieve.

Question # 16

All of the following are benefits of the single market except.

Question # 17

At the intersection of AD and AS equilibrium is achieved in.

Question # 18

Aggregate demand without a foreign sector is the sum of.

Question # 19

Top footballers land to earn more than lecturers because.

Question # 20

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

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Economics
11th Chapter

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Sr.# Question Answer
1 A person who is made redundant because of the contraction of an industry is a victim of.
A. Frictional unemployment
B. Demand deficient unemployment
C. Classical unemployment
D. Structural unemployment
2 The extra utility from consuming one more unit of a good is called.
A. Marginal utility
B. Additional utility
C. surplus utility
D. Bonus utility
3 The equilibrium inflation rate is determine by the intersection of __________ and ___
A. demand, supply
B. IS , LM
C. AD, AS
D. Labour demand, labour supply
4 Except for taxes to offset ___ taxes are.
A. Imperfect competition , popular
B. Extremality's, distortionary
C. Inequality, a first best option
D. Poor health, unnecessary
5 A monopoly may be self perpetuating because profits may be used for
A. research
B. Cost saving
C. Technical advance
D. All of the above
6 Market some times fall to exist because of.
A. Externalities
B. the free rider problem
C. Poor transport
D. a an b
7 The quantity theory of money says that changes in ______ lead to equivalent changes in ______ but have no effect on.
A. Prices, wages, output and employment.
B. Output, prices, employment
C. Nominal money, the price level output and employment.
D. Nominal money output prices
8 The retail price index is used to.
A. Construct price lists
B. Compare shop prices
C. Measure changes in the cost of living
D. None of the above
9 Expansionary fiscal policy in the classical model will cause aggregate demand to ______ potential output.
A. Exceed
B. Fall below
C. Fluclaute around
D. Remain equal to.
10 The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the.
A. Sun spect theory
B. Multiplier accelerator model
C. Solow theory
D. New classical theory
11 When a market is contestable , incumbent firms must.________ to avoid the entry of new competitors.
A. Behave like competitive firms
B. Agree to act together
C. Differentiate their products
D. Practice price discrimination
12 If the central bank buys financial securities in the open market to increase the monetary base, this is an example of.
A. Lender of last resort
B. Financial intermediation
C. Open market operations
D. Financial regulation.
13 Fiscal policy is weak under floating exchange rates as fiscal expansion.
A. Crowds out imports
B. Crowds out public consumption
C. Crowds out exports
D. Reduces the budget deficit
14 Taxes create a wedge between the sales price and purchase price that prevents the price system equaling _________ and
A. Marginal costs, marginal benefits
B. Demand, supply
C. Marginal cost, marginal revenue
D. Marginal cost, average cost
15 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
16 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
17 When investment is assumed to autonomous the slope of the AD schedule is determined by the.
A. Marginal propensity to invest.
B. disposable income
C. Marginal propensity to consume
D. Average properisity to consume
18 A good example of a public good is.
A. Public transport
B. National defense
C. The national health service
D. Rail transport
19 Real business cycle theorists argue that ___________ can explain short and long term fluctuations in output.
A. Imperfect labour markets
B. Rational expectations
C. Intertemporal decisions of households firms and government.
D. Sun spot cycles
20 Possible causes of involuntary unemployment are
A. Minimum wage agreements
B. Trade unions
C. Scale economies
D. All of the abvoe

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