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PPSC Economics Chapter 11 Assess Your Basics MCQs With Answers
Question # 1
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 # 2
Extremality's arise because there is a divergence between ____ and _
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Private costs, private benefits
Private costs, social costs of benefits
Social cost, social benefit
Insiders, outsiders
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Question # 3
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 # 4
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 # 5
The primary function of a bank is to.
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Control the money supply
Provide notes and coins for trade
Make a profit
Provide a chequeen clearing system.
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Question # 6
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 # 7
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 # 8
When we know the quantity of a product that buyers wish to purchases at each possible price we know.
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Demand
Supply
excess demand
Excess supply
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Question # 9
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 # 10
Firms are assumed to ____ costs and to _______ profit.
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Incur , desire
Pay ; make
Change ;earn
Minimize ; maximize
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Question # 11
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 # 12
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 # 13
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 # 14
Floating exchange rates are __ in the short run
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Stable
Volatile
Predictable
Depreciating
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Question # 15
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 # 16
Aggregate demand without a foreign sector is the sum of.
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c+1
C+G
1+G
C+!+G
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Question # 17
If demand is _______ then price cuts will ________ spending.
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Inelastic, increase
Elastic, increase
Elastic, decreases
None of the above
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Question # 18
Micro economics is conceded with
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The economy as a whole
The electronics industry
The study of individual economic behavior
the interactions within the entire economy
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Question # 19
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 # 20
The growth rate of economics tend to converge because._________ is easier when capital per worker is low and because of_____
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capital widening, technical innovation
Capital widening, catch up in technology
Capital deepening, technical innovation
Capital deepening, catch up technology.
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Question # 21
The key issues of macroeconomics are
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Unemployment
Inflation
Economic growth
All of the above
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