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PPSC Economics Chapter 11 Assess Your Basics MCQs With Answers
Question # 1
Real business cycle are cycles in
Choose an answer
Potential output
Actual output
Real output
International trade
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Question # 2
In an open economy leakages to imports ______ the value of the multiplier.
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Reduce
Increase
do not change
None of these
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Question # 3
When real income increases, other things equal we fan expect the demand for real money holdings to.
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Fall
Not change
Increase
Decrease
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Question # 4
All of the following are type of monetary policy except
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A nominal money stock target
A balances budget
An inflation target
The pursuit of a target real interest rate
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Question # 5
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 # 6
International difference in opportunity costs lead to countries acquiring.
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Comparative advantage
High exchange rates
Trade exchange rates
Trade barriers
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Question # 7
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.
Choose an answer
Market imperfection
The law of diminishing returns
The paradox of thriff
Market failure
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Question # 8
Potential output can be increased by _________ or by_________
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Increasing the use of labour, increasing the use of land
Increasing the use of capital, increasing the use of labour
Increasing the use of land, increasing the use of capital
Increasing the use of all inputs technical advances
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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
If a person thinks they are better off after a 10% wage increase, and all prices have risen 10%, then they are experiencing.
Choose an answer
Inflation
A supply shocks
Crowding out
Inflation illusion
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Question # 11
The AD schedule indicates that______ inflation is associated with______ output.
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higher , lower
Higher , higher
Lower , lower
zero ,zero
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Question # 12
The opportunity cost of a student is.
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Course fees and rent
A loan from the bank
What the student could have earned in the best job available by not studying.
What the student will earn after graduation.
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Question # 13
If your income during one year is L 10,000 ad the following year it is L,12,000 then it has grown by
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20%
2%
12%
15%
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Question # 14
Economics is the study of
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Production technology
Consumption decisions
How society decides what how and for whom to produce
The best way to run society
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Question # 15
The equilibrium price clears the market it is the price at which.
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Everything is sold
Buyers spend all their money
Excess demand is zero
c and d
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Question # 16
Under floating exchange rates, expectations of higher interest rates are likely to cause an __________ of the exchange rate.
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Depreciation
Appreciation
fall
Devaluation
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Question # 17
An optimal tariff is one which reduces imports to the level at which ___ equals
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imports , exports
The balance of trade, zero
The demand for currency, the supply of currency
Social marginal cost social marginal benefit
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Question # 18
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 # 19
Short run average total costs are equal to the sum of _______ and______
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Short run opportunity costs, profit
Short run average variable costs, profit
short run average variable costs, profit.
Short run average variable costs short run average fixed costs
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Question # 20
When capital mobility is perfect, interest rate differentials will tend to be offset by
Choose an answer
Price differences.
Balance of payments differences.
Current account differences.
Expected exchange rate changes
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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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