Question # 1

In the Keynesian cross diagram a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ______ and the equilibrium level of aggregate output to ______

Choose an answer

up ; rise

up ; fall

down ;rise

down ; fall

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the ___ curve to the __________

Choose an answer

rise ; LM ;right

rise ; IS ; right

Fall ; LM ; left

rise ;IS; Left

When the demand curve is vertical its shows that the demand is.

Choose an answer

Less elastic

Very high elastic

Elastic

Perfectly inelastic

That the division of labor is limited by the size of the market best applies to which explanation of trade.

Choose an answer

Factor endowment theory

Product life cycle theory

Economies of scale theory

Overlapping demand theory

If a price increase of good A increases the quantity demanded of good B, then good B is a.

Choose an answer

substitute good

Complementary good

Bargain

Interior good

Public utilities tend to be

Choose an answer

Inefficient

Natural monopolies

subject to increasing costs

None of these

Finance minister tax a commodity

Choose an answer

having elastic demand

ignore elasticity

Having unti elastic demand

Having unit elastic demand

Statistics are affected to a market extend by

Choose an answer

Aggregate of facts

Multiplicity of causes

Numerically stated

Complex manifestations

A monopoly may be self perpetuating because profits may be used for

Choose an answer

research

Cost saving

Technical advance

All of the above

In the Keynesian corss diagra, an increase in autonomous consumer expenditure causes the aggregate demand function to shift up the equilibrium level of aggregate output to _______ and the IS curve to shift to the _______

Choose an answer

rise ; left

rise ; right

fall ; left

fall ; right

The equation for a givne production function is Q = K2 + KL, initially K = 2 and L = 1 if the value of both inputs is doubted the production function exhibite.

Choose an answer

Increasing returns to scale

Diseconomies of scale

Constant returns to scale

Economies of scale

Which exchange rate mechanism calls for frequent redefining of the par value by small amounts to remove payments disequilibrium.

Choose an answer

Dual exchange rates

Adjustable pegged exchange rates

Managed floating exchange rates

Crawling pegged exchange rates.

An expansionary monetary policy

Choose an answer

Reduces interest rates

Increases real output

Shifts the LM curve to the right

All of the above

Price discrimination is possible

Choose an answer

Oligopoly

Duopoly

Perfect competition

Monopoly

If an economy experience an increase in productivity it means that.

Choose an answer

the level of output has risen

Employees are working harder than before

Output per unit of input has risen

Technical change has taken place

The nation, that, following currency depreciation, the balance of trade falls for a while before increasing is called a ________ effect.

Choose an answer

Relative price

Elasticity

J- Curve

Pass through

Social welfare is maximized when a hedonistic calculus regulates all human action according to the interventionist liberal

Choose an answer

John Stuart Mill

Thorstein veblen

Milton Frideman

Jeremy Bentham

The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the.

Choose an answer

Sun spect theory

Multiplier accelerator model

Solow theory

New classical theory

Which of the following does not apply to pareto efficiency.

Choose an answer

Consumptive efficiency

Productional efficiency

Allocative efficiency

Equity

Labour productivity measures.

Choose an answer

The output per worker

The output per machine

Total output

Marginal output

Which of these are nicknamed as Breton wood twins.

Choose an answer

IBRD AND IDA

IBRD AND WTO

WTO AND IMF

IMF AND IBRD

Knowledge of the money supply can lead to good predications of nominal GDP only

Choose an answer

If the price level is stable

If the money supply is stable

Over very short periods of time

If the determinants of velocity are known

Demand for labour is more likely to be wage inelastic if.

Choose an answer

Wages are a small proportion of total costs

Demand for the final product is price elastic

It is easy to replace labour

Capital is a good substitute forlabour

The Keynesian model is a good guide to ______ behavior and the classical model describes behavior in.

Choose an answer

^{Long run, short run}

Flexible, imperfect markets

Short term , long run

Ong run, imperfect market.

In the balance of payments, travel and tourism are included in the category of

Choose an answer

unilateral transfers

Capital account

Merchandise account

Services account

The statement that marginal cost = marginal revenue leads to profit maximization of loss minimization is true.

Choose an answer

All the time

Only in the long run

Only if "marginal cost is rising at the point of equality.

Only if average total cost is falling at the point of equality

The implementation lag for monetary policy is generally

Choose an answer

Much longer than it is for fiscal policy

Unrelated to central bank action

The same as it is for fiscal policy

Much shorter than it is for fiscal policy.

Under a fixed exchange rate system an expansionary fiscal policy leads to a

Choose an answer

Trade account deficit and a capital account surplus.

Trade account deficit and a capital account deficit

Trade account surplus and a capital account surplus

Trade account surplus and a capital accoundt deficit

A higher GDP per capita may not mean that the quality of life has really improved because.

Choose an answer

It measures wealth not income

It measures Gross Domestic product

It does not measure the quality of the items produced

it is only measured every five years

There are ______ methods of measuring GDP

Choose an answer

Three

Four

Five

None

A vertical demand curve results in.

Choose an answer

No change in quantity when the supply curve shifts.

No change in price when the supply curve shifts

No change in the supply curve being possible

No change in quantity when the demand curve shifts.

More Classes

Other Links

PPSC Economics Full Book MCQ Test MCQs With Answers

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer