MCQOPTIONS
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MCQOPTIONS
This section includes 78 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
When we refer to the hidden economy we mean unrecorded income owing to ? |
| A. | tax evasion |
| B. | poor statistics |
| C. | the lags between statistical collection and publication |
| D. | smuggling |
| Answer» B. poor statistics | |
| 2. |
when the level of income _________ there will be a tendency for the trade balance to improve as imports? |
| A. | increase, increase |
| B. | falls, increase |
| C. | falls, fall |
| D. | increase, fall |
| Answer» D. increase, fall | |
| 3. |
When investment is assumed to autonomous the slope of the AD schedule is determined by the ? |
| A. | marginal propensity to invest |
| B. | disposable incomes |
| C. | marginal propensity to consume |
| D. | average propensity to consume |
| Answer» D. average propensity to consume | |
| 4. |
When all of the debit or credit items in the balance of payments are combined ? |
| A. | merchandise imports equal merchandise exports |
| B. | capital imports equal capital exports |
| C. | services exports equal services imports |
| D. | the total surplus or deficit equals zero |
| Answer» E. | |
| 5. |
When a country has a trade deficit it ? |
| A. | purchases more stocks and bonds from the rest of the world than it sells |
| B. | purchases more goods from the rest of the world than it sells |
| C. | sells more goods to the rest of the world than it purchases |
| D. | sells more stocks and bonds to the rest of the world than it purchases |
| Answer» C. sells more goods to the rest of the world than it purchases | |
| 6. |
Two of the major factors contributing to growth are ? |
| A. | resources and efficiency |
| B. | money and efficiency |
| C. | money and luck |
| D. | resources and a good climate |
| Answer» B. money and efficiency | |
| 7. |
Total withdrawals from the circular flow of income include ? |
| A. | consumption savings and taxes |
| B. | savings government expenditure and imports |
| C. | savings taxes and exports |
| D. | savings taxes and imports |
| Answer» E. | |
| 8. |
Total injection are made up of? |
| A. | investment + tax + exports |
| B. | savings + government expenditure + exports |
| C. | investment + government expenditure + imports |
| D. | investment + government expenditure + exports |
| Answer» E. | |
| 9. |
The U.S balance of payments is constructed by ? |
| A. | the U.S Department of labor |
| B. | the U.S Department of Agriculture |
| C. | the U.S Department of commerce |
| D. | the council of Economic Advisers to the President |
| Answer» D. the council of Economic Advisers to the President | |
| 10. |
The underground economy consists of ? |
| A. | legal transactions |
| B. | part of the rail network |
| C. | legal transactions not declared for tax and illegal activities |
| D. | the water distribution system |
| Answer» D. the water distribution system | |
| 11. |
The total multiplier for the economy will reflect ? |
| A. | MPC and MPT |
| B. | MPT and MPZ |
| C. | MPC and MPZ |
| D. | MPC, MPT and MPZ |
| Answer» E. | |
| 12. |
The role of _______ is to direct one nation’s savings into investments of another nation? |
| A. | merchandise trade flows |
| B. | services flows |
| C. | current account flows |
| D. | capital flows |
| Answer» E. | |
| 13. |
The record of a country’s transactions in goods, services and assets with the rest of the world is its ? |
| A. | balance of trade |
| B. | capital account |
| C. | current account |
| D. | balance of payments |
| Answer» E. | |
| 14. |
The percentage of the labor force that is unemployed is the ? |
| A. | unemployment rate |
| B. | labor force rate |
| C. | employment rate |
| D. | unemployment population ratio |
| Answer» B. labor force rate | |
| 15. |
The multiplier tells us how much __________ changes after a shift in ____________? |
| A. | consumption income |
| B. | investment output |
| C. | savings investment |
| D. | output aggregate demand |
| Answer» E. | |
| 16. |
The multiplier is calculated as___________? |
| A. | 1(1-MPC) |
| B. | 1/MPS |
| C. | 1/MPC |
| D. | a or b |
| Answer» E. | |
| 17. |
The length of a business cycle would be measured from ? |
| A. | the slump to the expansion |
| B. | peak to peak |
| C. | peak to trough |
| D. | trough to peak |
| Answer» C. peak to trough | |
| 18. |
The key issues of macroeconomics are ? |
| A. | unemployment |
| B. | inflation |
| C. | economic growth |
| D. | All of the above |
| Answer» E. | |
| 19. |
The index used most often to measure inflation is the? |
| A. | wholesale price index (WPI) |
| B. | GDP deflator |
| C. | Producer price index (PPI) |
| D. | consumer price index |
| Answer» E. | |
| 20. |
The differences between a country’s merchandise exports and its merchandise imports is the ? |
| A. | balance of payments |
| B. | capital account |
| C. | current account |
| D. | balance of trade |
| Answer» E. | |
| 21. |
The difference between the balance on current account and the balance on capital account is the ? |
| A. | statistical discrepancy |
| B. | balance of payments |
| C. | balance of trade |
| D. | trade deficit |
| Answer» B. balance of payments | |
| 22. |
The difference between a country’s balance of payments and its balance of international indebtedness? |
| A. | is equal to official reserve transactions |
| B. | occurs because of foreign exchange fluctuations |
| C. | reflects statistical discrepancies |
| D. | reflects the difference between flow and stock concepts |
| Answer» E. | |
| 23. |
The diagram that shows the income received and payments made by each sector of the economy is the ? |
| A. | income-expenditures diagram |
| B. | aggregate demand-aggregate supply diagram |
| C. | circular flow diagram |
| D. | income-price diagram |
| Answer» D. income-price diagram | |
| 24. |
The current account includes ? |
| A. | the value of trade in merchandise |
| B. | services |
| C. | unilateral transfers |
| D. | All of the above |
| Answer» E. | |
| 25. |
The balance of trade is a record of ? |
| A. | exports and imports of financial assets |
| B. | the current account plus capital account |
| C. | the net export of goods and services |
| D. | the value of merchandise exports minus imports |
| Answer» E. | |
| 26. |
The balance of payments is divided into two major accounts the ? |
| A. | current account the capital account |
| B. | current account the trade account |
| C. | trade account the capital account |
| D. | current account the reserve account |
| Answer» B. current account the trade account | |
| 27. |
The argument that U.S current account deficits cause net job losses for Americans ? |
| A. | is true by definition in all possible circumstances |
| B. | is supported by recent U.S history |
| C. | focuses only on the overall economy and is thus always true |
| D. | fails to recognize that a current account deficit is matched by an equal inflow of foreign funds which finances employment increasing investment spend |
| Answer» E. | |
| 28. |
Referring to the above table, the U.S balance of international indebtedness suggests that the U.S is a net ? |
| A. | debtor |
| B. | creditor |
| C. | spender |
| D. | exporter |
| Answer» C. spender | |
| 29. |
Real GNP measures income ? |
| A. | including non-market activities |
| B. | adjusted for inflation |
| C. | including externalities |
| D. | including tax evasion |
| Answer» C. including externalities | |
| 30. |
Real GNP is a crude measure of national welfare because it excludes ? |
| A. | consumption |
| B. | investment |
| C. | exports |
| D. | work in the home |
| Answer» E. | |
| 31. |
Real GDP is nominal GDP measured in constant ? |
| A. | taxes |
| B. | prices |
| C. | exchange rates |
| D. | interest rates |
| Answer» C. exchange rates | |
| 32. |
Purchasing power parity exchange rates are used to ? |
| A. | compare living standards of different countries |
| B. | pay wages b multinational companies |
| C. | estimate the costs of economic growth |
| D. | convert nominal GDP to real GDP |
| Answer» B. pay wages b multinational companies | |
| 33. |
Purchases of government securities in the United States by foreigners is ? |
| A. | a credit item in the current account |
| B. | a debit item in the capital account |
| C. | a credit item in the capital account |
| D. | a debit item in the current account |
| Answer» D. a debit item in the current account | |
| 34. |
Nominal GNP measures income ? |
| A. | At the present time |
| B. | corrected for tax changes |
| C. | corrected for changes in interest rates |
| D. | At current prices |
| Answer» E. | |
| 35. |
Macroeconomics is the branch of economics that deals with ? |
| A. | imperfectly competitive markets: |
| B. | Only the long run adjustments to equilibrium in the economy |
| C. | The functioning of individual industries and the behavior of individual decision-making units business firms and households |
| D. | the economy as a whole |
| Answer» E. | |
| 36. |
Macroeconomic theory that emphasized the theories of Keynes and de-emphasized the classical theory developed as the result of the failure of ? |
| A. | economic theory to explain the simultaneous increases in inflation and unemployment during the 1970s |
| B. | The classical model to explain the prolonged existence of high unemployment during the Great Depression |
| C. | fine tuning during the 1960s |
| D. | the economy to grow at a rapid rate during the 1950s |
| Answer» C. fine tuning during the 1960s | |
| 37. |
Leakages from the circular flow are _________ and __________? |
| A. | investment, savings, government expenditure |
| B. | savings, taxes net of subsidies imports |
| C. | consumption investment government expenditure |
| D. | consumption taxes imports |
| Answer» C. consumption investment government expenditure | |
| 38. |
It has become conventional classify a recession as a period where national output falls for _________ or more? |
| A. | three years |
| B. | six months |
| C. | a year |
| D. | two years |
| Answer» C. a year | |
| 39. |
_______ is needed to balancell the balance of payments statements? |
| A. | credit transactions |
| B. | debit transactions |
| C. | unilateral transfers |
| D. | statistical discrepancy |
| Answer» E. | |
| 40. |
Injection into the circular flow are ______ and __________? |
| A. | consumption investment exports |
| B. | investment exports transfer payments |
| C. | investment government expenditure exports |
| D. | taxes exports, transfer payments |
| Answer» D. taxes exports, transfer payments | |
| 41. |
Indicate below what is NOT a main macroeconomic goal ? |
| A. | Increasing North Sea oil production |
| B. | Reducing unemployment |
| C. | Achieving a sustainable rate of economic growth |
| D. | Reducing inflation |
| Answer» C. Achieving a sustainable rate of economic growth | |
| 42. |
In the economy when a steel producer sells steel to car producer it is regarded as ? |
| A. | a final good |
| B. | an intermediate good |
| C. | an injection |
| D. | a leakage |
| Answer» C. an injection | |
| 43. |
In the circular flow we would expect leakages to ___________ injections? |
| A. | equal |
| B. | be less than |
| C. | be greater than |
| D. | be less or greater than |
| Answer» B. be less than | |
| 44. |
In the calculation of gross domestic product net exports are ? |
| A. | the sum of merchandise trade and services |
| B. | the current account plus long-term capital |
| C. | the value of merchandise exports minus imports |
| D. | short-term capital plus the basic balance |
| Answer» B. the current account plus long-term capital | |
| 45. |
In the balance of payments travels and tourism are included in the category of ? |
| A. | unilateral transfers |
| B. | capital account |
| C. | merchandise account |
| D. | services account |
| Answer» E. | |
| 46. |
In the balance of payments the statistical discrepancy is used to ? |
| A. | insure that the sum of all debits matches the sum of all credits |
| B. | insure that trade imports equals the value of trade exports |
| C. | obtain an accurate account of a balance of payments deficit |
| D. | obtain an accurate account of a balance of payments surplus |
| Answer» B. insure that trade imports equals the value of trade exports | |
| 47. |
In balance of payments accounting tourism and travel are classified in the ? |
| A. | merchandise trade account |
| B. | services account |
| C. | unilateral transfers account |
| D. | capital account |
| Answer» C. unilateral transfers account | |
| 48. |
In an Open economy leakage to imports ____________ the value of the multiplier ? |
| A. | reduce |
| B. | increase |
| C. | do not change |
| D. | None of the above |
| Answer» B. increase | |
| 49. |
In an economy measuring (1) total value added (2)total spending on final goods and (3)total factor earning gives the result that ? |
| A. | 3>2>1 |
| B. | 3=2=1 |
| C. | 3<2<1 |
| D. | any measure can be larger or smaller than any other |
| Answer» C. 3<2<1 | |
| 50. |
In a macroeconomic model without foreign trade or a government aggregate demand is the sum of ? |
| A. | personal saving and private investment |
| B. | personal saving and personal consumption |
| C. | personal consumption and private investment |
| D. | None of the above |
| Answer» D. None of the above | |