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PPSC Economics Full Book MCQ Test MCQs With Answers
Question # 1
Indifference curve approach is also called.
Choose an answer
Law of diminishing marginal utility
Law of substitution
Ordinal measure approach
None of these
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Question # 2
A situation in which expansionary in monetary policy has no effect on the economy is known as.
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Macro economic stabilization
A liquidity trap
A depression
Capital flight
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Question # 3
Per Capita income is obtained by dividing National income by
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Total labor Force in the country
Unemployed Youth in the country
Total population of that country
None
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Question # 4
An increase in aggregate demand is more likely to lead to demand pull inflation if.
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Aggregate supply is perfectly elastic
Aggregate supply is perfectly inelastic
Aggregate supply is unit elastic
Aggregate supply is relatively elastic
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Question # 5
If my neighbor burns garden waste causing my house to fil with smoke this is an example of.
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A production extremality
A second best solution
Transaction costs
A consumption externality
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Question # 6
In the long run an increase in government purchases of military equipment would cause output to _________ and the aggregate price level to
Choose an answer
Stay constant fall
fall ; fall
fall ; stay constant
stay constant ; rise
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Question # 7
Globalization is likely to increase with
Choose an answer
More protectionism
An increase in tariffs
More trade within countries
Greater trade flows between countries
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Question # 8
The natural rate of unemployment is likely to tall if
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Unemployment benefits increase
Income tax increases
More training is available for the unemployed
Geographical immobility increases
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Question # 9
"The quantity demanded increases as its price increases and falls as its price falls" is called given goods, is presented by.
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Allen
Marshall
Adam smith
Robert griffin
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Question # 10
The nation, that, following currency depreciation, the balance of trade falls for a while before increasing is called a ________ effect.
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Relative price
Elasticity
J- Curve
Pass through
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Question # 11
A utility contour shows all the alternative combinations of two consumption goods that.
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Can be produced with a given set of resources and technology
Yield the same total of utility
Can be purchased with a given budget at given prices
Equate the marginal utilities of these goods and therefore make the consumer indifferent between them.
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Question # 12
Monetary policy can affect output.
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this statement is always true
This statements always false
This statement is true only in the short run
This statement is true only in the medium run and the long run
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Question # 13
Over time the wealth of society increases and payments technologies get more efficient What is the effect on money demand of these two changes.
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Money demand rises proportionately to the rise in wealth.
Money demand rises, but less than proportionately to the rise in wealth.
The overall effect in ambiguous
Money demand declines
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Question # 14
The free market involves
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The free provision of products
The subsidizing of products by the government
Market forces of supply and demand
All trade via barter
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Question # 15
Because a monopoly hires workers up to the point where their marginal revenue product equals the wage rate the monopoly will.
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Pay less than the going wage rate
Pay a wage equal to the value of the marginal product of labor
Pay less than the value of the marginal product of labor
Pay workers what they are worth to society
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Question # 16
In the long run, an increase in productivity would cause output to _________ and the aggregate price level to
Choose an answer
fall ; rise
fall ; fall
rise ; fall
rise ; rise
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Question # 17
Who said that research studies have differing degree of purity and applicability.
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Faraday
Julious Smon
Morry
Bogardus
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Question # 18
As the MPS increases, the multiplier will
Choose an answer
Increase
Either increase or decrease depending on the size of the change in investment
Remain constant
Decrease
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Question # 19
First Islamic banking branch of NBP started its operations in Karachi onDecember 15
Choose an answer
2004
2005
2006
2007
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Question # 20
In the Harrod - Domar equation g = s/v , v is defined as.
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the value of the country a capital stock
The ratio of the country's capital stock to its output.
The change in the country's capital stock
None of the above
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Question # 21
Negative taxation refers to.
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Tax rebate
Subsidies
Tax evasion
Tax avoidance
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Question # 22
If there is a price floor there will be
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Shortages
Surpluses
Equilibrium
None of these
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Question # 23
The negative effect on the economy that occurs when average tax rates increases because taxpayers have moved into higher income brackets during an expansion is.
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Fiscal drag
The Laffer curve
Bracket creep
Debt burden
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Question # 24
If economics when we say that people are rational, we mean that they.
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Never make mistakes
Try to get what they desire as best they can, given the limitations they face.
Logically figure out what to do
Behave in a random unpredictable manner
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Question # 25
Kharif crops include.
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Cotton and rice
Maize and Sugarcane
Jawar and Bajra
all of the them
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Question # 26
When the price level increases 25% starting from a price level equal to 100, a Rs. 1000 bond will have a real value of .
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Rs. 800
Rs.1250
Rs.750
Rs.666
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Question # 27
i- statistical laws are not exact
ii- statistics reveals the entire story
choose the correct from the following.
Choose an answer
Both the statements are correct
Only the first statement is correct
Only the second statement is correct
Both the statements are wrong.
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Question # 28
Developing economies usually
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Have large industrialized sectors
Are dependent on primary products
Have high levels of wealth
Earn more from exports than is spent on imports
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Question # 29
If the central bank prints more 10 billion and spends them then as a direct result of this action.
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M1 and M2 both increases
Neighed M1 nor M2 increase
M1 increase but M2 does not
M2 increased but M1 does not.
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Question # 30
When internal economics of scale occur
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Total costs fall
Marginal costs increase
Average costs fall
Revenue falls
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Question # 31
If X , Y, and Z are willing to work for Rs. 4, Rs, 5, and Rs.6 respectively but N pays them Rs. 7 each, producers surplus is.
Choose an answer
Rs. 4
Rs.7
Rs.5
Rs.6
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