MCQOPTIONS
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MCQOPTIONS
This section includes 1337 Mcqs, each offering curated multiple-choice questions to sharpen your Economics Mcqs knowledge and support exam preparation. Choose a topic below to get started.
| 1301. |
Assuming there is no government or foreign sector, if the MPC is 8 the multiplier is ? |
| A. | 5 |
| B. | 8 |
| C. | 2 |
| D. | 1.25 |
| Answer» B. 8 | |
| 1302. |
To reduce the supply of money the government could ? |
| A. | Reduce interest rates |
| B. | Buy back government bonds |
| C. | Sell government bonds |
| D. | Encourage banks to lend |
| Answer» E. | |
| 1303. |
An outward shift in the demand for money other things being equals should lead to ? |
| A. | A lower interest rate but the same quantity of money |
| B. | A higher interest rate but the same quantity of money |
| C. | A higher quantity of money but lower interest rates |
| D. | A higher quantity of money but the same interest rate |
| Answer» D. A higher quantity of money but the same interest rate | |
| 1304. |
The liquidity trap occurs when the demand for money ? |
| A. | Is perfectly interest elastic |
| B. | Is perfectly interest inelastic |
| C. | Means that an increase in money supply leads to a fall in the interest rate |
| D. | Means that an increases in the money supply leads to an increases in the interest rate |
| Answer» B. Is perfectly interest inelastic | |
| 1305. |
According to the quantity theory of money an increase in the money supply is most likely to lead to inflation if ? |
| A. | The velocity of circulation decrease |
| B. | The number of transaction decrease |
| C. | There is deflation |
| D. | The velocity of circulation and the number of transactions is constant |
| Answer» C. There is deflation | |
| 1306. |
An increase in the marginal propensity to consume will ? |
| A. | increase the size of the multiplier |
| B. | Increase the marginal propensity to save |
| C. | Decrease national income |
| D. | Reduce injections into the economy |
| Answer» C. Decrease national income | |
| 1307. |
The difference between goes investment and net investment is ? |
| A. | Depreciation |
| B. | Acceleration |
| C. | Declaration |
| D. | Capital investment |
| Answer» D. Capital investment | |
| 1308. |
When an economy first begins to grow more slowly ? |
| A. | GDP increase |
| B. | Inflation is likely to increase |
| C. | Stock levels are likely to increase |
| D. | Investment in equipment is likely to increase |
| Answer» D. Investment in equipment is likely to increase | |
| 1309. |
If the Keynesian consumption function is C = 10 + 0.8 Td when disposable income is Rs1000 the marginal propensity to consume is what ? |
| A. | 0.8 |
| B. | 800 |
| C. | 810 |
| D. | 0.81 |
| Answer» E. | |
| 1310. |
Barriers to entry ? |
| A. | Enable abnormal profits to be made in the long run |
| B. | Enable losses to be made in the long run |
| C. | Enable abnormal profits to be made in the short run only |
| D. | Occur in perfect competition |
| Answer» C. Enable abnormal profits to be made in the short run only | |
| 1311. |
An increase in national income is ? |
| A. | Likely in increase exports |
| B. | Likely to decrease savings |
| C. | Likely to decrease investment |
| D. | Likely to increase spending on imports |
| Answer» B. Likely to decrease savings | |
| 1312. |
If injections are greater than withdrawals ? |
| A. | National income will increase |
| B. | National income will decrease |
| C. | National income will stay in equilibrium |
| D. | Price will fall |
| Answer» B. National income will decrease | |
| 1313. |
In Which of the business cycle do firms try to cut stocks in order to save costs ? |
| A. | The upturn |
| B. | The peeking out |
| C. | The expansion |
| D. | The recession |
| Answer» E. | |
| 1314. |
Companies in the private sector are owned by ? |
| A. | The government |
| B. | Shareholders |
| C. | Employees |
| D. | The community |
| Answer» D. The community | |
| 1315. |
To be allocatively efficient a firm must produce where ? |
| A. | The total cost equals demand |
| B. | The average revenue equals the marginal revenue |
| C. | The price equals the average cost |
| D. | The price equals the marginal cost |
| Answer» D. The price equals the marginal cost | |
| 1316. |
To maximise sales revenue a firm should produce where ? |
| A. | Marginal cost is zero |
| B. | Marginal revenue is maximised |
| C. | Marginal revenue is zero |
| D. | Marginal revenue equals marginal cost |
| Answer» E. | |
| 1317. |
Profit is measured by ? |
| A. | Revenue – fixed costs |
| B. | Fixed cost + revenue |
| C. | Revenue – sales |
| D. | Revenue – total costs |
| Answer» E. | |
| 1318. |
In perfect price discrimination ? |
| A. | Consumer surplus is maximised |
| B. | produce surplus is zero |
| C. | Community surplus is maximised |
| D. | Consumer surplus is zero |
| Answer» C. Community surplus is maximised | |
| 1319. |
For a firm operating in two markets and price discriminating the profit maximising condition is ? |
| A. | Marginal revenue in A= Price B |
| B. | Marginal revenue in A = Marginal revenue B = Price A = Price B |
| C. | Marginal revenue in A = Marginal revenue B = Marginal cost |
| D. | Marginal revenue in A = Marginal revenue B = Average cost |
| Answer» C. Marginal revenue in A = Marginal revenue B = Marginal cost | |
| 1320. |
If marginal revenue equals marginal cost ? |
| A. | No profit is being made |
| B. | Total revenue equals total cost |
| C. | Profits are maximised |
| D. | Producing another unit would increase profits |
| Answer» D. Producing another unit would increase profits | |
| 1321. |
According to supply side economists as tax rates are reduced labour supply should increase. This implies that ? |
| A. | There is no income effect when tax rates are changed |
| B. | The income effect of a wage change is greater than the substitution effect of a wage change. |
| C. | There is no substitution effect when tax rates are changed |
| D. | The substitution effect of a wage change is greater than the income effect of a wage change |
| Answer» E. | |
| 1322. |
Economic growth can be shown by ? |
| A. | An inward shift of the production possibility frontier |
| B. | A movement along the production possibility frontier |
| C. | An outward shift of the production possibility frontier |
| D. | A decision by the government to produce inside the production possibility frontier |
| Answer» D. A decision by the government to produce inside the production possibility frontier | |
| 1323. |
If injections are less than withdrawals at the full-employment level of national income, there is ? |
| A. | an inflationary gap |
| B. | hysteresis |
| C. | A deflationary gap |
| D. | hyperinflation |
| Answer» D. hyperinflation | |
| 1324. |
Reaganomics was a radical shift in Policy aimed at direct tackling ? |
| A. | The charities economy |
| B. | The demand side of the country |
| C. | The underground economy |
| D. | the supply side of the economy |
| Answer» E. | |
| 1325. |
Assume there is no government or foreign setor, If the MPC is 75 a Rs20 million decrease in planned investment will cause aggregate output to decrease by ? |
| A. | Rs80 million |
| B. | Rs20 million |
| C. | Rs 15 million |
| D. | Rs26.67 million |
| Answer» B. Rs20 million | |
| 1326. |
Which of the following is true ? |
| A. | If the marginal cost is greater than the average cost the average cost falls |
| B. | If the marginal cost is greater than the average cost the average cost increase |
| C. | If the marginal cost is positive total costs are miximised |
| D. | If the marginal cost is negative total costs increase at a decreasing rate if output increases |
| Answer» C. If the marginal cost is positive total costs are miximised | |
| 1327. |
A reduction in the money supply is likely to ? |
| A. | Reduce the interest rate |
| B. | Increase the interest rate |
| C. | Increase inflation |
| D. | Decrease deflation |
| Answer» C. Increase inflation | |
| 1328. |
As resources are shifted from one industry to another this can be shown by ? |
| A. | An inward shift of the production possibility frontier |
| B. | A movement along the production possibility frontier |
| C. | An outward shift of the production possibility frontier |
| D. | The pivoting of the production possibility frontier |
| Answer» C. An outward shift of the production possibility frontier | |
| 1329. |
If an economy moves from producing 10 units of A and 4 units of B to producing 7 As and 5Bs The opportunity cost of the 5th B is ? |
| A. | 7As |
| B. | 10As |
| C. | 3As |
| D. | 1A |
| Answer» D. 1A | |
| 1330. |
The resources in the economy do not include ? |
| A. | Demand |
| B. | Land |
| C. | Labour |
| D. | Capital |
| Answer» B. Land | |
| 1331. |
A deflationary policy could include ? |
| A. | increasing injections |
| B. | Reducing taxation rates |
| C. | Reducing interest rates |
| D. | Reducing government spending |
| Answer» D. Reducing government spending | |
| 1332. |
Injections are? |
| A. | Assumed to be exogenous |
| B. | Assumed to be a function of national income |
| C. | Decrease aggregate demand |
| D. | Decrease the investment into an economy |
| Answer» E. | |
| 1333. |
Any combination of products inside the production possibility frontier is ? |
| A. | Allocatively inefficient |
| B. | X inefficient |
| C. | Consumer inefficient |
| D. | Productively inefficient |
| Answer» E. | |
| 1334. |
The manifest functions of government include________________? |
| A. | the formation of party machines |
| B. | the protection of the interests of the power elite |
| C. | the enlargement of the administrative elite |
| D. | the provision of institutionalized social control |
| Answer» C. the enlargement of the administrative elite | |
| 1335. |
Antarctica is occupied by several nations together because no one nations has________________? |
| A. | sovereignty over it |
| B. | the desire to rule it |
| C. | interest in its resources |
| D. | the power to take it over |
| Answer» B. the desire to rule it | |
| 1336. |
The average variable cost curve ? |
| A. | is derived from the average fixed costs |
| B. | Converges with the average cost as output increases |
| C. | Equals the total costs divided by the output |
| D. | Equals revenue minus profits |
| Answer» C. Equals the total costs divided by the output | |
| 1337. |
Total increases from Rs500 to Rs600 when output increases from 20 to 30 units. Fixed costs are Rs200 Which of the following is true ? |
| A. | Marginal cost is Rs20 |
| B. | Average cost falls |
| C. | Variable cost rises by Rs100 |
| D. | Average fixed cost is Rs10 |
| Answer» D. Average fixed cost is Rs10 | |