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PPSC Economics Chapter 11 Assess Your Basics MCQs With Answers
Question # 1
Bank create money by
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Printing it
Issuing debit cards
Accepting chequeens
Lending out part of their deposits
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Question # 2
If the MPC is 0.5 the multiplier is
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2
1/2
0.2
20
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Question # 3
With fixed exchange rates and no private currency flow, when the central bank buys domestic currency the domestic money supply is.
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Increased
Unaffected
Reduced
All of the above
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Question # 4
The abolition of income tax would probably ________ the number of workers in employment and____________ the equilibrium. rate of unemployment.
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increase ; decrease
increase ; increase
reduce ; increase
reduce ; reduce
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Question # 5
In an economy, measuring total value (1) added, total value(2) spending on final goods and 3 total factor earning gives the result that.
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3>2>1
3 +2>1
3<2<1
Any measure can be larger or smaller than any other
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Question # 6
If a person thinks they are better off after a 10% wage increase, and all prices have risen 10%, then they are experiencing.
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Inflation
A supply shocks
Crowding out
Inflation illusion
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Question # 7
Possible causes of involuntary unemployment are
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Minimum wage agreements
Trade unions
Scale economies
All of the abvoe
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Question # 8
If your income doubles and the prices of the goods you buy double, then your demand for these goods will likely
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Increase
Not change
Decrease
Shift
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Question # 9
When a market is contestable , incumbent firms must.________ to avoid the entry of new competitors.
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Behave like competitive firms
Agree to act together
Differentiate their products
Practice price discrimination
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Question # 10
Economics assumes that people consume goods and services to achieve.
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Status
Prestige
Utility
Self esteem
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Question # 11
Except for taxes to offset ___ taxes are.
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Imperfect competition , popular
Extremality's, distortionary
Inequality, a first best option
Poor health, unnecessary
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Question # 12
The increase in total cost when one more units is produced is known as.
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Marginal cost
Opportunity cost
Limited cost
Average cost
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Question # 13
The extra utility from consuming one more unit of a good is called.
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Marginal utility
Additional utility
surplus utility
Bonus utility
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Question # 14
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 # 15
Satellite television subscription and television detection devices are ways in which broadcasting companies address the _____ problem.
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Externality
Market imperfection
Deadweight burden
Free rider
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Question # 16
Normative economics form ______ based on.
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Positive statements facts
Opinions, personal values
Positive statements values
Opinions facts
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Question # 17
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 # 18
For given government spending and taxation the government budget deficit will grow in __________ and decline in _________
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booms, booms
recession, recession
booms, recessions
recessions, booms
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Question # 19
If banks and the private sector decide to hold less cash the money multiplier will be.
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Unchanged
Larger
Smaller
unstable
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Question # 20
In the ERM, each country fixed ___ against each other ERM participant collectively the group._____ against the rest of the world.
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A nominal exchange rate, floated
A real exchange rate, pegged
a purchasing power parity, pegged
a real exchange rate, floated
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Question # 21
In the absence of international capital controls, central banks set ______ to provide the correct incentive for speculators
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Money supply targets
Income policy
Interest rates
Inflation targets
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