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PPSC Economics Chapter 11 Assess Your Basics MCQs With Answers
Question # 1
A firm that breaks even after all economic costs are paid is earning.
Choose an answer
Economic profit
Accounting profit
Normal profit
Supernormal profit
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Question # 2
When investment is assumed to autonomous the slope of the AD schedule is determined by the.
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Marginal propensity to invest.
disposable income
Marginal propensity to consume
Average properisity to consume
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Question # 3
The total multiplier for the economy will reflect.
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MPC and MPT
MPT and MPZ
MPC and MPZ
MPC, MPT and MPZ
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Question # 4
Economic transition involves high inflation because ______ and _____
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High monetary growth, high wages.
High budget deficits, devaluation
High monetary growth, devaluation
Prices surge from an artificially low level to their equilibrium level the inflation tax is required as source of government revenue.
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Question # 5
Expansionary fiscal policy in the classical model will cause aggregate demand to ______ potential output.
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Exceed
Fall below
Fluclaute around
Remain equal to.
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Question # 6
In the UK mergers can be referred to the competition commission of they create a firm with _______ of the market.
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15%
20%
25%
30%
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Question # 7
Perfect international capital mobility suggests that international funds will be responsive to _______ differentials.
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Current account
Interest rate
Tax
Price
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Question # 8
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 # 9
The main cause of different relative costs between countries are.
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Relative factors competition
Relative factor mobility
Relative factor substitution
Relative factor endowments
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Question # 10
A production technique is technically efficient if.
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Output is maximized
Input are minimized
there is no way to make a given output using less of one input and no more of the other inputs.
costs are minimized
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Question # 11
LDC's often have a comparative advantage in the production of.
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Primary products
Intermediate products
Manufactured products
Financial services.
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Question # 12
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 # 13
All of the following are types of imperfect competition except
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Monopolistic competition
Oligopoly
Monopoly
Unfair competition
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Question # 14
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 # 15
When capital mobility is perfect, interest rate differentials will tend to be offset by
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Price differences.
Balance of payments differences.
Current account differences.
Expected exchange rate changes
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Question # 16
The single European Act committed_ governments to a ___ in 1992
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European union, single market
Western European, single currency area
European union, single currency area
Western European, single market
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Question # 17
A supply curve is directly affected by
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Technology
Input costs
Government regulation
All of the above
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Question # 18
All of the following are benefits of the single market except.
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It allows countries to exploit their comparative advantage, more fully
Firms could more readily exploit economies of scale
It intensified competition
It is easier book holidays in member countries.
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Question # 19
An advocate of the classical model of the economy would claim that unemployment a created when the ___________ is above its equilibrium level in the.
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Price level, agregate economy
Tax rate, government ebudget
Wage rate, labour market
Interest rate, market for loanable funds
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Question # 20
Real business cycle theorists argue that ___________ can explain short and long term fluctuations in output.
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Imperfect labour markets
Rational expectations
Intertemporal decisions of households firms and government.
Sun spot cycles
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Question # 21
Adding up the quantities demanded of a good by different people facing the same price gives us the.
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Supply curve
Market demand curve
Demand curve
Market supply curve
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