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PPSC Economics Chapter 11 Assess Your Basics MCQs With Answers
Question # 1
Fiscal policy is weak under floating exchange rates as fiscal expansion.
Choose an answer
Crowds out imports
Crowds out public consumption
Crowds out exports
Reduces the budget deficit
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Question # 2
The long run Philips curve is _________ at the ______
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Horizontal natural rate of inflation
Horizontal , natural rate of unemployment
Vertical , natural rte of inflation
Vertical , equilibrium rate of unemployment.
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Question # 3
In the UK under a _________ of the labour force belong to a trade union.
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Quarter
Third
Half
Three quarters
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Question # 4
If a price increase of good A increases the quantity demanded of good B, then good B is a.
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substitute good
Complementary good
Bargain
Interior good
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Question # 5
In the neoclassical theory of growth a higher saving rate leads to.
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A higher growth rate
A fluctuating growth rate
A lower growth rate
No change in the growth rate
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Question # 6
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 # 7
Marginal revenue is the ________ when output is.
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Change in average revenue, inversed.
change in total revenue, increased by one unit
change in average revenue, increased by one unit
Change in total revenue, incresed.
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Question # 8
On a graph a positive linear relation ship.
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Moves down to the right
Moves up to the left
Moves up to the right
Modes down to the left
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Question # 9
The most important source of wage differentiate are.
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Reginal variation
Unionization
Relative danger
Skills
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Question # 10
Real business cycle theories suggest that _____ to correct departures from the desired growth path.
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There is a role of fiscal policy
There is a role for monetary policy
There is a role for supply side policies
There is no case for stabilizing output over the business cycle.
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Question # 11
The impossibility of negative gross investment provides a______ to fluctuations in.
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Celling, stock building
Celling, capital prices
floor , output
floor , the capital output ratio
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Question # 12
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 # 13
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 # 14
We would normally expect the size of the labour force to be ____ than the number of workers willing to accept job offers at any real wage rate.
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Smaller
Larger
the same size
None of these
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Question # 15
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 # 16
The allocation of resources is not efficient it
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The marginal cost of production does not equal society marginal benefit
The distribution is inequitable
Economic growth is low
Unemployment is high
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Question # 17
The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the.
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Sun spect theory
Multiplier accelerator model
Solow theory
New classical theory
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Question # 18
Starting from a balanced budget, for a given tax rate an increase in income will cause the government budget to.
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Move into surplus
Move into deficit
Remain unchanged
None of these
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Question # 19
A current account deficit means that a country may.
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Reduce its stock of foreign assets
Increases its stock of foreign assets
Increases its savings
Increases its foreign currency reserves.
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Question # 20
Comparing a monopoly and a competitive firm the monopolist will.
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Produce less at a lower price
Produce more at a lower price
Produce less at a higher price
Produce less at a lower price
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Question # 21
If a long average cost rises, output rises from left to right this is an example of.
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Increasing returns to scale
Decreasing returns to scale.
Constant returns to scale
the minimum efficient scale
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