MCQOPTIONS
Saved Bookmarks
MCQOPTIONS
This section includes 80 Mcqs, each offering curated multiple-choice questions to sharpen your Economics Mcqs knowledge and support exam preparation. Choose a topic below to get started.
| 51. |
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. | |
| 52. |
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 | |
| 53. |
Higher export demand __________ output and a higher MPZ __________ output? |
| A. | reduces, reduces |
| B. | reduces, increase |
| C. | increase, reduces |
| D. | increases, increases |
| Answer» D. increases, increases | |
| 54. |
Aggregate demand in an economy trading internationally with a government sector can be written as ? |
| A. | AD = C + I |
| B. | AD = C + I + G |
| C. | AD = C + I + G + X + Z |
| D. | AD = C + I + G + X – Z |
| Answer» E. | |
| 55. |
Starting from a balanced budget, for a given tax rate, an increasing in income will cause the government budget to ? |
| A. | move into surplus |
| B. | move into deficit |
| C. | remain unchanged |
| D. | None of the above above |
| Answer» B. move into deficit | |
| 56. |
Aggregate demand without a foreign sector is the sum of ? |
| A. | C + 1 |
| B. | C + G |
| C. | I + G |
| D. | C + 1 + G |
| Answer» E. | |
| 57. |
If the MPC is 0.5 the multiplier is ? |
| A. | 2 |
| B. | 1/2 |
| C. | 0.2 |
| D. | 20 |
| Answer» B. 1/2 | |
| 58. |
If desired spending in the economy exceeds income we would expect ? |
| A. | households to save more |
| B. | firms to produce less |
| C. | firms to produce more |
| D. | the MPC to change |
| Answer» D. the MPC to change | |
| 59. |
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. | |
| 60. |
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 | |
| 61. |
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 | |
| 62. |
Equilibrium in the circular flow of income occurs when ? |
| A. | Injections = withdrawals |
| B. | There is a Bank Holiday |
| C. | Injections withdrawals |
| D. | None of these |
| Answer» B. There is a Bank Holiday | |
| 63. |
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. | |
| 64. |
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 | |
| 65. |
According to the classical economists, the only gainers from growth would be ? |
| A. | landlords |
| B. | peasants |
| C. | The army |
| D. | politicians |
| Answer» B. peasants | |
| 66. |
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 | |
| 67. |
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. | |
| 68. |
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 | |
| 69. |
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. | |
| 70. |
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. | |
| 71. |
An index of prices of all domestically produced goods in the economy is the ? |
| A. | wholesale price index (WPI) |
| B. | Consumer price index (CPI) |
| C. | GDP deflator |
| D. | Producer price index (PPI) |
| Answer» D. Producer price index (PPI) | |
| 72. |
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 | |
| 73. |
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 | |
| 74. |
A linear consumption function with a positive slope less than one means that if income increases consumption will ? |
| A. | fall |
| B. | not change |
| C. | fluctuate |
| D. | increase |
| Answer» E. | |
| 75. |
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 | |
| 76. |
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 | |
| 77. |
The current account includes ? |
| A. | the value of trade in merchandise |
| B. | services |
| C. | unilateral transfers |
| D. | All of the above |
| Answer» E. | |
| 78. |
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 | |
| 79. |
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 | |
| 80. |
Aggregate demand includes only ? |
| A. | consumer expenditure government expenditure and investment |
| B. | consumer expenditure investment government expenditure and exports less imports |
| C. | consumer debt investment debt and government debt |
| D. | consumer expenditure and investment |
| Answer» B. consumer expenditure investment government expenditure and exports less imports | |