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PPSC Economics Full Book MCQ Test MCQs With Answers
Question # 1
In the ERM, each country fixed ___ against each other ERM participant collectively the group._____ against the rest of the world.
Choose an answer
A nominal exchange rate, floated
A real exchange rate, pegged
a purchasing power parity, pegged
a real exchange rate, floated
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Question # 2
Depreciation is.
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A decrease in the stock of capital
Gross investment
Net investment
An increases in the stock of capital
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Question # 3
World trade has been increasing due to.
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Increased tariffs
Increased legal barriers
Increased embargoes
Reduced protectionism
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Question # 4
Given the saving equation S = - 50 + 0, 20 Y, where s is saving and Y is income.
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The break even level of income is 240
Dissaving takes place if income is 300
Consumption expenditures and saving are equal at an income level of 500
The MPS is constant for all levels of income
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Question # 5
A fixed exchange rate, plus perfect capital mobility _______ the scope for monetary policy.
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Enhances
Undermines
Encourages
Facilitates
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Question # 6
The firms long run output decision will be where.
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Long run average cost a lowest
Marginal revenue equals output
Marginal revenue equals long run marginal cost
Marginal cost equals output
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Question # 7
To be allocatively efficient ta firm must produce where
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the total cost equals demand
the average revenue equals the marginal revenue
The price equals the average cost
The price equals the marginal cost
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Question # 8
An increase labor supply would cause the IS curve to.
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Shift up and to the right
Shift down and to the left
Remain unchanged
Shift up and to the right only if people face borrowing constraints
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Question # 9
When the level of income _______ there will be atendency for the trade balance to improve as imports.
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Increases, increase
falls, fall
Increase, fall
fall , increase
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Question # 10
__________ policies attempt to foster industrialization by establishing high barriers to import of foreign goods to promote local production.
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absolute advantage
Comparative advantage
Export led growth
Import substitution
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Question # 11
The very word statistics refers to.
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State craft
Science of state
Political state
Political craft
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Question # 12
If there is a price celling there will be
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Shortages
Surpluses
Equilibrium
None of these
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Question # 13
If average fixed cost is 40 and average variable cost is 80 for a given output we the know that average total cost is.
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40
120
80
None of the above
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Question # 14
The index used most often to measure inflation is the
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Consumer price index
Wholesale price index
Student price index
Producer price index
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Question # 15
Economic growth can be measured by
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The CPI
The CBI
GDP
MPC
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Question # 16
"Transactions" money is money used as a
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Store of value
Unit of account
Medium of exchange
Standard of deferred payment
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Question # 17
All of the following are credit items in the balance of payments except.
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Investment inflows
Merchandise exports
Payment for American service's to foreigners
Private give to foreign residents
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Question # 18
The expected profit from the profit distribution above is.
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40 units
60 units
100 units
20 units
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Question # 19
In long run a reduction in labor supply would cause output to __ and the aggregate price level to.
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fall ; rise
fall ; fall
rise ; fall
rise ; rise
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Question # 20
According to the factor price equalization theorem, the ______ factor should oppose free trade policies in any given country.
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Abundant
scarce
Neither
Can't tell without more information
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Question # 21
A rise in the real exchange rate will __ the competitiveness of the domestic economy.
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Increase
reduce
do nothing do
all of these
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Question # 22
in The Liquidity trap region
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Fiscal policy is not effective
Monetary policy is completely ineffective
Monetary policy is completely effective
Fiscal policy and monetary policy are equally effective
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Question # 23
Indifference curve theory is old wine in new labeled bottle is said by.
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Marshall
Griffin
Ricardo
Allen
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Question # 24
When there is a surplus in a market
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There is downward pressure on price
There is upward pressure on price
The market could still be in equilibrium
There are too many buyers chasing too few goods.
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Question # 25
A tariff that probibits imports ahs only
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A revenue effect and redislnbution effect
Revenue effect and protection effect
Consumption effect and production effect
Redistribution effect and consumption effect
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Question # 26
Under floating exchange rates, expectations of higher interest rates are likely to cause an __________ of the exchange rate.
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Depreciation
Appreciation
fall
Devaluation
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Question # 27
A competitive firm produces a level of output at which.
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Price is greater than marginal cost
Price equals marginal cost
Price is less than marginal cost
None of the above
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Question # 28
A fall in investment demand can result from
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Higher interest rates
Lower expected future profits
More expensive capital goods
All of the above
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Question # 29
A depreciation of currency occur when
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The value of the currency falls
The value of the currency increases
Inflation falls
The balance of payments improves
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Question # 30
Skills that can be transferred to other employers are called.
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General skills
Specific skills
Non pecuniary skills
All of the above
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Question # 31
A monopolist will discontinue production if
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Marginal revenue is less than marginal cost
Marginal revenue is less than average total cost
Marginal revenue is less the average fixed cost
Price is less than average variable cost
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