Economics MCQs

Aggregate Demand and Aggregate Supply MCQs

Aggregate Demand MCQs/Aggregate Supply MCQs/ Macroeconomics MCQs/Introduction to Economics MCQs/ Economics MCQs/ Economics Lecturer MCQs/ MCQs of Economics/ Most repeated MCQs of Economics/ Economics Lecturer Solved Past Papers/ Previous Test of Economics Lecturer/ SS Economics Previous Tests/ Lecturer Economics Previous Tests


Aggregate Demand and Aggregate Supply MCQs

1. Keynesians assume that the Aggregate Supply curve is

a. Horizontal

b. Relatively flat

c. Relatively Steeper

d. Both (a) and (b)

ANS: D


Monetarist short-run Aggregate Supply curve: Horizontal axis

a. Horizontal axis

b. Vertical axis

c. Positively slope

d. None of the above

ANS: C


Neo-classical Aggregate Supply curve has the:

a. Upward sloping

b. Horizontal Segments

c. Vertical segments

d. Both (a) and (c)

ANS: D


According to Stanley Fisher, “SRASS curve is:

a Flat

b. Vertical

c. Horizontal

d. Steeper

ANS: A


The supply side economists believe that increase in employment opportunities. The remove problem of stagflation.

a. Aggregate demand

b. Aggregate supply

c. Both of them

d. None of them

ANS: B


The aggregate production function implied under classical theory is:

a. Long run

b. Short run

c. No time element

d. None of the above

ANS: A


The classical aggregate supply curve is:

a. Perfectly elastic

b. Horizontal straight line

c. Perfectly inelastic

d. Both (a) and (b)

ANS: C


According to Keynes, the level of income and employment is determined where

a. AD >AS

b. AD < AS

c. AD = AS

d. Both (a) and (b)

ANS: C


If at the level of full employment AD > AS it will result in:

a. Inflationary gap

b. Deflationary gap

c. Effective gap

d. Both (a) and (b)

ANS: A


When the level of full employment AD < AS, it will result in:

a. Inflationary gap

b. Deflationary gap

c. Effective gap

d. Both (a) and (b)

ANS: B


The classical aggregate supply curve is:

a. Perfectly elastic

b. Perfectly inelastic

c. More elastic

d. Unitary elastic

ANS: B


Keynesian model of income determination is:

a. Demand-side factors

b. Supply-side factors

c. Both (a) and (b)

d. None of the above

ANS: A


The Keynesian model assumes the general price level is:

a. Flexible

b. Dynamic

c. Remain constant

d. None of the above

ANS: C


The classical theory of output and employment stresses the role of the:

a. Demand-side factors

b. Supply-side factors

c. Both (a) and (b)

d. None of the above

ANS: B


In 1931 and 1940 the unemployment rate averaged:

a. 14.8 percent

b. 18.8 percent

c. 22.8 percent

d. 26.8 percent

ANS: A


During the Great, Depression prices dropped by:

a. One-third

b. One-fourth

c. One-fifth

d. One-seventh

ANS: B


The 1973 OPEC oil embargo is an example of such a shock.

a. Classical

b. Modern

c. Keynesian

d. All of the above

ANS: A


According to Stanley Fisher, output level above potential output, the AS curve is:

a. Flat

b. Steeper

c. Straight line

d. None of the above

ANS: B


According to Stanley Fisher, AS curve is a ___not a___:

a. vertical, straight line

b. horizontal, straight line

c. straight line, Curve

d. Curve, straight line

ANS: D


In the Keynesian AS curve, the price level does not depend on:

a. GNP

b. NNP

c. GDP

d. Both (a) and (b)

ANS: C


The Potential GDP is also called:

a. SRAS

b. LRAS

c. LRAD

d. Both (a) and (c)

ANS: B


Contractionary fiscal policy cause a shift AD curve is

a. Upward (Downward)

b. Upward (Rightward)

c. Left (downward)

d. Left (Rightward)

ANS: C


Contractionary Monetary Policy causes shift AD curve:

a. Downward (Leftward)

b. Downward (Rightward)

c. Upward (Leftward)

d. Upward (Rightward)

ANS: A


Expansionary Monetary Policy cause shift AD curve:

a. Downward (Leftward)

b. Downward (Rightward)

c. Upward (Leftward)

d. Upward (Rightward)

ANS: D


Expansionary fiscal policy causes a shift in the AD curve is:

a. Right (downward)

b. Right (upward)

c. Left (upward)

d. Left (downward)

ANS: B


According to a very small increase in aggregate supply and a relatively large increase in aggregate demand.

a. Classical side policy

b. Keynesian side policy

c. Monetarist side policy

d. Supply-side policy

ANS: D


According to modern economists, only increase output. can permanently

a. Supply-side policies

b. demand-side politics

c. both (a) and (b)

d. none of the above

ANS: C


according to modern economists, Supply-side policies are useful for:

a. short-run

b. long-run

c. both (a) and (b)

d. none of the above

ANS: C


According to modern economists, demand-side policies are useful only for:

a. short-run

b. long-run

c. both (a) and (b)

d. none of the above

ANS: D


Monetarist long-run Aggregate Supply curve is:

a. Horizontal axis

b. Vertical axis

c. Positively slope

d. None of the above

ANS: B


 

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Elasticity of Demand and Supply MCQs

Elasticity of Demand and Supply MCQs/ MCQs of Elasticity of Demand and Supply / Economics MCQs/ Microeconomics MCQs/ Economics Lecturer MCQs/ MCQs of Economics/ Most repeated MCQs of Economics/ Economics Lecturer Solved Past Papers/ Previous Test of Economics Lecturer/ SS Economics Previous Tests/ Lecturer Economics Previous Tests


Elasticity of Demand and Supply MCQs

The concept of elasticity of demand was introduced by:
a. Alfred Marshall
b. Adam Smith
c. R. G. D Allen
d. J. R. Hicks
ANS: A


A line demand curve has as:
a. Varying elasticity throughout225
b. Constant elasticity throughout
c. Zero elasticity throughout
d. Positive elasticity throughout
ANS: A


If the demand curve is flatter, the value of elasticity is:
a. less than one
b. unitary elastic
c. greater than one
d. near to infinity
ANS: C


If the value of elasticity is less than one, then the demand curve is:
a. flatter
b. steeper
c. vertical
d. horizontal
ANS: B


According to modern economists, the slope of the demand curve is:
a. varying elasticity
b. absolute elasticity
c. zero elasticity
d. both (a) and (c)
ANS: B


If the demand curve is horizontal and the value of elasticity is infinity. Then:
a. Relatively elastic demand
b. Relatively inelastic demand
c. Perfect elasticity demand
d. Perfect inelasticity demand
ANS: C


The elasticity of demand for cigarettes by a non-smoker is:
a. Unitary price elastic
b. Relatively price inelastic
c. Perfect price elastic
d. Perfectly price inelastic
ANS: D


Benedict purchases product Y for which his income elasticity of demand is negative, apparently product Y is:
a. A necessity
b. A substitute
c. An inferior good
d. A luxury good
ANS: C


The market demand curve is:
a. Vertical summation of individual demand curves
b. Upward summation of individual demand curves
c. Downward summation of individual demand curves
d. Horizontal summation of individual demand curves
ANS:D


At the midpoint on a straight-lined demand curve, demand is
a. Elastic
b. Inelastic
c. Unit elastic
d. Zero
ANS: C


The income elasticity of demand:
a) Is positive only
b) Is negative only
c) Must lie between -1 and +1
d) Can be positive, negative, or zero
ANS: D


When Q = f (P), the elasticity coefficient is measured by:
a) AQ/AP/P/Q
b) AP/AQ * Q/P
c) AQ/AP * P/Q
d) P/AQ/Q/P
ANS: C


In the case of complementary goods, the cross elasticity of demand is:
a. Positive
b. Negative
c. Zero
d. Infinity
ANS: B


In the case of perfect substitute goods, the cross elasticity of demand is:
a. Positive
b. Negative
c. Infinity
d. Zero
ANS: C


In the case of un-related goods, the cross elasticity of demand is:
a. Negative
b. Positive
c. Infinity
d. Zero
ANS: D


A perfectly elastic supply curve will be:
a. Parallel to Y axis
b. Parallel to X axis
c. U shaped
d. Downward sloping
ANS: B


The point elasticity concept was propounded by:
a. R.G. Lipsey
b. R. G. D. Allen
c. Alfred Marshall
d. J. R. Hicks
ANS: A


Income elasticity is positive but less than unity in the case of:
a. Necessity
b. Luxury
c. Inferior
d. Substitutes
ANS: A


In the case of substitutes, cross elasticity of demand is:
a. Zero
b. Negative
c. Positive
d. Infinity
ANS: C


The arc elasticity concept was propounded by:
a. R.G. D. Allen.
b. R.G. Lipsey
c. R. G. D. Allen
d. Alfred Marshall
e. All of them
ANS: C


The Giffen paradox is an exception to:
a. Law of demand
b. Law of Supply
c. Law of Diminishing Marginal Utility
d. Law of Diminishing return to scale
ANS: A


The ‘Revenue Method of elasticity” was introduced by:
a. Joan Robinson
b. Alfred Marshall
c. Prof. R.G. D. Allen.
d. R.G. Lipsey
ANS: A


The elasticity of demand for luxuries tends to be:
a. Greater than one
b. Less than one
c. Equal to one
d: Equal to zero
ANS: A


Demand is elastic if elasticity is:
a. Less than one
b. Equal to one
c. Equal to zero
d. Greater than one
ANS: D


A more elastic supply curve means that the incidence falls more on the:
a. Consumer
b. Supplier
c. Both (a) and (b)
d. None of the above
ANS: A


Demand is inelastic if elasticity is:
a. Less than one
b. Equal to one
c. Greater than one
d. Equal to zero
ANS: A


Demand is unit elastic if elasticity is:
a. Less than one
b. Greater than one
c. Equal to one
d. Equal to zero
ANS: B


The fiancé minister levied tax with on less elastic goods to increase government income.
a. Less rate
b. More rate
c. Both (a) and (b)
d. Don’t change tax rate
ANS: B


Which of the following is not a method of measurement of price elasticity of demand in economics
a. Total Outlay
b. Total savings
c. Point method
d. Arc method
ANS: B


As per the total outlay method, demand is said to be elastic if a result of change in price total outlay:
a. Increases
b. Decrease
c. Remain the same
d. None
ANS: C


If the demand for a commodity is less elastic then an entrepreneur will make its price to increase its profiles:
a. Increase
b. Decrease
c. Both (a) and (b)
d. None of the above
ANS: A


A less elastic supply curve means the incidence falls more on the:
a. Consumer
b. Supplier
c. Both (a) and (b)
d. None of the above

ANS:


 

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Supply MCQs

MCQs on Supply with Answers/ Supply MCQs/ MCQs on Demand and Supply with Answers/ Economics MCQs with Answers/ MCQs of Economics with Answers/ Microeconomics MCQs with Answers/ Economics Lecturer MCQs/ Most repeated MCQs of Economics/ Economics Lecturer Solved Past Papers/ Previous Test of Economics Lecturer/ SS Economics Previous Tests/ Lecturer Economics Previous Tests


Supply MCQs

Supply is a part of the:
a. Stock
b. Flow
c. Both of them
d. None of them
ANS: A


The standard form of Supply function is:
a. Q = a – bp
b. Q = b + ap
c. X = a – bp
d. Y = b+ ap
ANS: B


The positive relationship between price and quantity demanded is known as:
a. Law of demand
b. Law of supply
c. Law of market
d. Both (a) and (b)
ANS: B


In the case of supply, quantity is the increasing function of:
a. Demand
b. Income
c. Price
d. Both (a) and (c)
ANS: C


The law of diminishing returns is commonly referred to as the reason for the positive slope of the:
a. Demand function
b. Supply function
c. Both of them
d. None of them
ANS: B


A market supply curve is the:
a. Vertical summation of individual supply curves
b. Horizontal summation of individual supply curves
c. Positively summation of individual supply curves
d. Either (b) or (c)
ANS: B


According to Marshall, the long-run supply curve is:
a. Positive slope
b. Negative slope
c. Horizontal-axis
d. Vertical-axis
ANS: C


According to Modern economics, Alan S. Blinder, Paul. A. Samuelson, W. J. Baumol, G. Stigler, etc. very long-run supply curve is:
a. Perfectly elastic
b. Perfectly inelastic
c. Infinitely elastic
d. Both (a) and (c)
ANS: D


The market period supply function curve is
a. Positive slope
b. Negative slope
c. Horizontal-axis
d. Vertical-axis
ANS: D


The elasticity of the market-period supply function is:
a. Positive
b. Negative
c. Zero
d. Infinity
ANS: C


The short-run supply function curve is:
a. Positive slope
b. Negative slope
c. Horizontal-axis
d. Vertical-axis
ANS: A


According to Marshall, the elasticity of the short-run supply curve is:
a. Positive
b. Negative
c. Infinity
d. Zero
ANS: A


According to H. Evan Drummond and John W. Goodwin, the quantity supplied is a:
a. Zero-dimensional concept
b. One-dimensional concept
c. Two-dimensional concept
d. Neither (a) nor (b)
ANS: B


According to modern economists, the supply curve is a:
a. Zero-dimensional concept
b. One-dimensional concept
c. Two-dimensional concept
d. Neither (a) nor (c)
ANS: C


Which of the following shifting factor of the supply curve?
a. Taxes
b. Subsidies
c. Both of them
d. None of them
ANS: C


The supplier will always chase the:
a. Higher price
b. Low price
c. Mediate priced. All of the above
ANS: A


Which of the following shifting factor of the supply curve?
a. Price of substitute products and price of a joint product
b. Technology and capital per worker
c. The number of producers and factors costs
d. All of the above
ANS: D


The supply side of a market can be represented by a market supply curve:
a. Market demand curve
b. Market supply curve
c. Both of them
d. None of them
ANS: B


According to Marshall, the ‘short-run Market supply curve is:
a. Horizontal-axis
b. Vertical-axis
c. Positive
d. Negative
ANS: C


If the supply is more inelastic, you should draw the supply curve
a. Flatter
b. Steeper
c. Perfect inelastic
d. Both (a) and (b)
ANS: B


Over a longer period, the supply of the product becomes:
a. More elastic
b. More inelastic
c. Perfectly inelastic
d. Perfectly elastic
ANS: A


Supply is a Concept.
a. Stock
b. Flow and stock
c. Flow
d. None of the above
ANS: C


According to Alfred Marshall, ‘Demand curve sloped downward due to law of:
a. Law of equi-marginal utility
b. Law of diminishing marginal utility
c. Both (a) and (b)
d. None of the above
ANS: B


With very elastic supply and very inelastic demand, the burden of the tax on:
a. Buyers
b. Sellers
c. Both of both
d. None of them
ANS: A


With very inelastic supply and very elastic demand, the burden of the tax on:
a. Buyers
b. Sellers
c. Both of them
d. None of them
ANS: B


The ‘horizontal summation of individual demand is known as:
a. Market demand curve
b. Market supply curve
c. Both of them
d. None of them
ANS: A


If the supply curve is vertical, the deadweight loss of a:
a. Tax is positive
b. Tax is negative
c. Tax is zero
d. Both (a) and (b)
ANS: C


If the demand curve is vertical while the supply curve slopes upward, a tax imposed in this market will end up being paid:
a. Totally by producers
b. Totally by consumers
c. Both of them
d. Neither (a) nor (b)
ANS: A


Fresh vegetable market is market.
a. Very short period
b. Short period
c. Long period
d. Very long period.
ANS: A


According to modern economists, the most basic tools of economics are:
a. Price and quantity
b. Demand and supply
c. Monetary and fiscal policy
d. The elasticity of demand and supply
ANS: B


Price ceiling and price floor are also known as:
a. Equilibrium pricing
b. Disequilibrium pricing
c. Both (a) and (b)
d. None of the above
ANS: B


According to Alfred Marshall, the price of perishable goods is determined in:
a. Short period
b. Very short period
c. Market period
d. Long term period
ANS: B


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Demand MCQs

Demand MCQs/ MCQs on Demand with Answers/ MCQs on Demand supply with Answers/ Economics MCQs with Answers/ MCQs of Economics with Answers/ Microeconomics MCQs with Answers/ Economics Lecturer MCQs/ Most repeated MCQs of Economics/ Economics Lecturer Solved Past Papers/ Previous Test of Economics Lecturer/ SS Economics Previous Tests/ Lecturer Economics Previous Tests


Demand MCQs

What is the relationship between Demand and Price?
a. Positive
b. Negative
c. Both (a) and (b)
d. None of the above
ANS: B


Antoine Augustine Cournot first developed a mathematical model of supply and demand in his book Researches on Mathematical Principles of the Theory of Wealth”
a. 1828
b. 1838
c. 1848
d. None of the above
ANS: B


The price elasticity of demand for a Giffen good is would be:
a Positive
b. Negative
c. Zero
d. None of the above
ANS: A


The law of demand refers to:
a. Price-supply relationship
b. Price-cost relationship
c. Price-demand relationship
d. Price-income relationship
ANS: C


The standard form of demand function is:
a. Q = a-bp
b. Q = b + ap
c. X= a – bp
d. Y= b + ap
ANS: A


The high the price, the lower the quantity demanded. This relationship is sometimes called the:
a. Law of positive-sloping demand
b. Law of negative-sloping demand
c. Law of constant-sloping demand
d. Law of increasing-sloping demand
ANS: B


Why the demand curve slopes downward:
a. income effect
b. substitute effect
c. price effect
d. both (a) and (b)
ANS: C


The Hicksian demand curve includes:
a. Just substitute effect
b. Just income effect
c. Price effect
d. Both (a) and (b)
ANS: A


The hicksian demand curve is also known as:
a. Compensated demand curve
b. Uncompensated demand curve
c. Cost indifference curve
d. all of the above
ANS: A


In the case of a normal good, the Marshallian demand curve is always flatter than the:
a. Hicksian demand curve
b. Slutsky demand curve
c. Samuelson demand curve
d. Both (a) and (b)
ANS: A


In the case of inferior and Giffen goods, Hicksian demand curves cannot be upward-sloping for
a. Normal goods
b. Giffen goods
c. Both (a) and (c)
d. None of the above
ANS: C


An ordinary demand curve is based upon:
a. Price effect & substitution effect
b. Substitution effect & Income effect
c. Only substitution effect
d. Only Income effect
ANS: B


The uncompensated demand curve is more sensitive to changes in price. So demand curve is:
a. Perfectly elastic
b. Perfectly inelastic
c. More elastic
d. Less elastic
ANS: C


The compensated demand curve is less sensitive to changes in price, as a result, the demand curve is:
a. Perfectly elastic
b. Perfectly inelastic
c. More elastic
d. Less elastic
ANS: D


In the case of normal goods, the relationship between income and quantity demanded is:
a. Negative
b. Positive
c. Zero
d. Infinite
ANS: B


In the case of normal goods, the relationship between own price of the commodity and its quantity demanded is:
a. Constant
b. Inverse
c. Positive
d. None of these
ANS: B


If there is a price floor, there will be:
a. Surplus
b. Shortage
c. Equilibrium
d. None of the above
ANS: A


Which of the following shifting factor of the demand curve:
a. Test and preferences of Consumers
b. Related good8 (Price of)
c. Income of the consumer
d. All of the above
ANS: D


If the demand curve is very inelastic relative to the supply curve, the burden of the tax183 falls mostly on:
a. Buyers
b. Sellers
c. Both of them
d. None of them
ANS: A


If the demand curve is very elastic relative to the supply curve, it falls mostly on the:
a. Sellers
b. Buyers
c. Both of them
d. None of them
ANS: A


A typical demand curve cannot be:
a. Convex to the origin
b. Concave to the origin
c. A straight line
d. Rising upwards to the right
ANS: D


Where demand is equal to supply (D=S). This phenomenon is also known as:
a. Hicksian Cross
b. Walrasian Cross
c. Marshallian Cross
d. Both (a) and (c)
ANS: C


In Economics when demand for a commodity increases with a fall in its price it is known as:
a. Contraction of demand
b. Expansion of demand
c. No change in demand
d. None of the above
ANS: B


The demand side can be represented by:
a. Market demand curve
b. Market supply curve
c. Both of them
d. None of them
ANS: A


The Marshallian model (demand-supply) is a:
a. Stable equilibrium
b. Dynamic equilibrium
c. Stead-state equilibrium
d. Both (a) and (b)
ANS: A


When the price rises and quantity demand is large quantity supply (Qd>Qs), the excess demand is:
a. Negative
b. Positive
c. Equal
d. Both (a) and (b)
ANS: B


Both Marshallian and Walrasian demand-supply models are:
a. Static stability
b. Dynamic stability
c. Steady-state stability
d. Neutral stability
ANS: A


The Marshallian demand curve downward sloping. While the Walrasian demand curve is:
a. Horizontal axis
b. Vertical axis
c. Upward sloping
d. Downward sloping
ANS: D


The Marshallian supply curve upward sloping. While the Walrasian supply curve is:
a. Downward sloping
b. Horizontal axis
c. Upward sloping
d. Vertical axis
ANS: C


The fluctuations in price and output are called:
a. Marshallian fluctuation
b. Hicksian fluctuation
c. Keynesian fluctuation
d. Cobweb fluctuation
ANS: D


According to Lester O. Bumas, vertical supply function is associated with:
a. Land
b. Capital
c. Labor
d. All of them
ANS: A


According to classical economists, The market is equilibrium. When there is”:
a. Imperfect competition in the market
b. Perfect competition in the market
c. Monopoly and free market economy
d. None of the above
ANS: B


Alfred Marshall broke conceptual periods time into:
a. Two-period
b. Three-period
c. Four-period
d. Five period
ANS: B


Change in demand occurs due to the change in:
a. Income
b. Prices of related goods
c. Taste and preference
d. All of these
ANS: D


Good A is a normal good. The demand curve for good A:
a. Backward X-axis
b. Backward Y-axis
c. Slopes downward
d. Slopes upward
ANS: C


An exception to the law of demand is:
a. Normal good
b. Giffen good
c. Article of distinction
d. Both (b) and (c)
ANS: D


Distribution of income is a determinant of
a. Individual demand function
b. Market demand function
c. Both (a) and (c)
d. None of these
ANS: B


The equilibrium price is o ten called:
a. Market clearing price
b. Market price
c. Both of them
d. None of them
ANS: C


A tax that is levied on producers shifts the supply curve:
a. Upward
b. Downward
c. Remain constant
d. Both (a) and (b)
ANS: A


A tax that is levied on consumers shifts the demand curve:
a. Upward
b. Downward
c. Remain constant
d. Both (a) and (b)
ANS: B


The specific quantity to be purchased against a specific price of the commodity is called:
a. Demand
b. Quantity demand
c. Movement along the demand curve
d. Shift in demand
ANS: B


In the case of normal goods, the demand curve shows:
a. A negative slope
b. A positive slope
c. Zero slope
d. None of these
ANS: A


Law of demand must fail in case of
a. Normal goods
b. Giffen goods
c. Inferior goods
d. None of these
ANS: B


In the case of Giffen’s paradox, the slope of the demand curve is:
a. Negative
b. Positive
c. Parallel to X-axis
d. Parallel to Y-axis
ANS: B


In the case of Giffen goods, the demand curve is:
a. Upward sloping
b. Downward sloping
c. Parallel to X-axis
d. Parallel to Y-axis
ANS: A


Which of the following shifting factor of the demand curve?
a. Buyers (Number of)
b. Expected Future Prices (EFP)
c. Expected Income of Consumers (EYP)
d. All of the above
ANS: D


If two goods are complementary then a rise in the price of one results in:
a. Rise in demand for the other
b. Fall in demand for the other
c. Rise in demand for both
d. None of these
ANS: B


A demand curve is upward-sloping for:
a. Normal goods
b. Inferior goods
c. Giffen goods
d. None of these
ANS: C


When the increase in the price of one good causes an increase in demand for the other, the goods are:
a. Substitutes
b. Complementary
c. Inferior
d. Giffen
ANS: A


The stable cobweb model is:
a. Dynamic model
b. Steady-state model
c. Simple model
d. Both (a) and (c)
ANS: D


A fall in the income of the consumer (in the case of normal goods) will cause:
a. Upward movement on the demand curve
b. Downward movement on the demand curve
c. The rightward shift of the demand curve
d. The leftward shift of the demand curve
ANS: D


Change in quantity demanded of a commodity due to change in its price, other things remaining constant, is called:
a. Cross-price effect
b. Price effect
c. Income effect
d. Substitution effect
ANS: B


Change in quantity demanded of a commodity due to a change in the real income of the consumer caused by the change in own price of the commodity is called:
a. Cross-price effect
b. Price effect
c. Income effect
d. Substitution effect
ANS: C


The Marshallian demand and supply model resolved the:
a. Air-diamond paradox
b. Pigouian-paradox
c. Water-diamond paradox
d. Hicksian paradox
ANS: C


Marshall’s demand-supply model represents the:
a. General equilibrium
b. Partial equilibrium
c. Both of them
d. None of them
ANS: B


The ‘Law’ of Downward-Sloping Demand therefore always applies to:
a. Inferior goods
b. Giffen goods
c. Normal goods
d. Both (a) and (c)
ANS: C


Hicksian (compensated) demand curves cannot be upward-sloping, because:
a. Substitution effect, cannot be positive
b. Substitution effect cannot be negative
c. Both (a) and (c)
d. None of the above
ANS: A


According to modern economists, maximum price (or price ceiling) as part of an:
a. Anti-inflationary economic policy
b. Anti-deflationary economics policy
c. Both (a) and (b)
d. None of the above
ANS: A


The substitution effect takes place when the price of the commodity becomes:
a. Relatively cheaper
b. Relatively dearer
c. Stable
d. Both (a) and (b)
ANS: D


Different quantities purchased at different possible prices of a commodity are called:
a. Demand schedule
b. Quantity demanded
c. Demand function
d. Individual demand
ANS: A


Diagrammatic presentation of the demand schedule of an individual buyer of a commodity in the market yields:
a. Market demand schedule
b. Individual demand curve
c. Individual demand scheduled. Market demand curve
ANS: B


Complementary goods:
a. Complete the demand for each other
b. Are substituted for each other
c. Are demanded together
d. Both (a) and (c)
ANS: D


 

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Introduction to Economics MCQs

Introduction to Economics MCQs/ Economics MCQs/ Microeconomics MCQs/ Economics Lecturer MCQs/ MCQs of Economics/ Most repeated MCQs of Economics/ Economics Lecturer Solved Past Papers/ Previous Test of Economics Lecturer/ SS Economics Previous Tests/ Lecturer Economics Previous Tests

Introduction to Economics MCQs

Purchasing power parity (PPP) concept was introduced by Gustave Cassel in 1918. The concept is based on the:
a. Law of two price
b. Law of zero price
c. Law of one Price
d. None of these
ANS: C


In Ricardian theory of value, the stress has been made on:
a. Marginal cost
b. Production cost
c. Labor cost
d. Collection cost
ANS: A


As the price of diamond is higher, so it has:
a. Higher marginal valuation for consumer
b. Lower marginal cost for producer
c. Higher marginal cost for producer
d. Both A and B
ANS: D


If a country’s production possibilities curve shifts outward, which one of the following is true?
a. The country has underemployed its resources.
b. The country has decreased its production.
c. The country has increased its technology
d. The country is experiencing inflation.
ANS: C


Growth definition is developed by?
a. Alfred Marshall
b. P. A. Samuelson
c. J.M Keynes
d. Milton Friedman
ANS: B


Drain Theory relates to which economist:
a. Dadabhai Naoroji
b. Amit Mitra
c. Bimal Jalan
d. V.K.R.V Rao
ANS: A


The concept ‘Industrial Reserve Army is introduced by:
a. Joan Robinson
b. J.S. Mill
c. Karl Marx
d. None of the above
ANS: C


Economics is the gospel of mammon. Whose statement is this?
a. Carlyle
b. Ruskin
c. Both (a) and (b)
d. None of the above
ANS: B


Normative statements are concerned with
a. Facts and theories
b. What ought to be
c. What is?
d. Rational choice involving costs and benefits
ANS: C


The main contribution of John Ramsey McCulloch in his field
a. Profit and interest
b. Profit and wage
c. Profit and capital
d. Profit and labor
ANS: A


The Labor Theory of Value was introduced by:
a. Karl Marx
b. Adam Smith
c. David Ricardo
d. J. S. Mill
ANS: C


The “Dumpster-Shafer theory was introduced by:
a. J. S. Mill
b. Robert Lucas
c. J. J. Shafer
d. G. L. Shackle
ANS: D


Ideally, value judgments are involved at the:
a. Levels of facts, theory, and policy
b. Levels of facts and theory only
c. Level of facts only
d. Level of policy only
ANS: D


Most of the disagreement among economists involves:
a. Facts
b. Principles
c. Positive statements
d. Normative statements
ANS: D


Positive statements are:
a. Value judgments
b. Verifiable or testable
c. Statements in the affirmative
d. Good statement
ANS: B


Who developed the concept of “Representative Firm
a. A. C. Pigou
b. Alfred Marshal
c. J. M. Keynes
d. W. H, Phillips
ANS: B


Which one of the following not an economic goal?
a. Freedom & incentives
b. Equity & efficiency
c. Profit & business
d. Both (a) and (b)
ANS: C


What do the plot points on the production possibilities graph represent?
a. Taxes
b. Unemployment
c. Inflation
d. Trade-offs
ANS: D


The main contribution of Johann H. von Thunen in his field:
a. Economic geography
b. Spatial economics
c. Both of them
d. None of them
ANS: C


Price mechanism has also given the name:
a. Laisseze-Faire
b. Ricardian-Faire
c. Price system
d. None of these
ANS: A


The production possibility curve is concerned with;
a. Interest of the economy
b. Limitations of the economy
c. Resources of the economy
d. Qualities of the economy
ANS: C


What economic concept is used to explain the famous diamond-water paradox?
a. The Law of One
b. Say’s Law
c. Physical product analysis
d. Marginal analysis
ANS: D


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Introduction to Economics MCQs

According to classical, the subject matter of economics is concerned with:
a. Production
b. Distribution and exchange
c. Consumption
d. All of the above
ANS: D


Name the economist, who analyses the subject matter of economics into two branches:
a. Adam Smith
b. Alfred Marshall
c. Ranger Frisch
d. P. A. Samuelson
ANS: C


According to Classical economists, equilibrium in the economy is settled by:
a. Centralized planning
b. Price mechanism
C. Both the planning and price mechanism
d. None of these
ANS: B


According Keynesian and post-Keynesian economists ‘Say’s Law of market was proved wrong by:
a. Industrial Revolution
b. Great Depression
c. Green Revolution
d. Agriculture Revolution
ANS: B


The Ex-ante term Expenditure and Ex-post Expenditure were first used by:
a. Leonid Kantorovich 1950
b. Friedrich Hayek 1974
c. Gunnar Myrdal in 1927.
d. Tjalling Koopmans 1948
ANS: C


Comforts lies between the
a. Inferior goods and necessaries
b. Luxuries and inferior goods
c. Necessaries and luxuries
d. None of the above
ANS: C


Scarcity is
a. A relative term
b. A dynamic term
c. An economics term
d. (a) and (c)
ANS: D


In economics term water is:
a. Free goods
b. Economic goods
c. Both of the above
d. None of them
ANS: A


Demand-side policies merely affect the interest rate and the:
a. Output
b. Price level
c. Both (a) and (b)
d. None of the above
ANS: B


Supply-side policies affect the real wage, employment and:
a. Output
b. Price level
c. Both (a) and (b)
d. None of the above
ANS: A


The term consumption capital for consumer goods was introduced by:
a. Karl Marx
b. W.S. Jevons
c. Adam Smith
d. Alfred Marshall
ANS: D


According to modern economists, “Economics system is so much:
a. Easy
b. Complicated
c. Both (a) and (b)
d. None of the above
ANS: B


The goods which cannot be consumed more than once is known as:
a. Durable goods
b. Non-durable good
c. Producer goods
d. None of the above
ANS: B


The ‘distributive efficiency concept was developed by:
a. G. S. Shackle
b. Abba P. Lerner
c. David Ricardo
d. None of the above
ANS: B


The Welfare definition of economics related to which school of thought:
a. Classical
b. Neo-classical
c. Modern
d. Both (a) and (c)
ANS: B


Microeconomics theory is also known as ——
a. Business theory
b. Price theory
c. Individual theory
d. Cost theory
ANS: B


Who criticize the Marshall’s definition of economics?
a. Robbins
b. Clark
c. Beveridge
d. A. C. Piguo
ANS: A


When the “Principles of Economics was wrote?
a. 1870
b. 1880
c. 1890
d. 1990
ANS: C


Points on the production possibilities frontier are:
a. Efficient
b. Inefficient
c. Normative
d. Unattainable
ANS: A


Friedrich Hayek was a proponent of:
a. Keynesian economics
b. Communism
c. Classical Liberalism
d. Socialism
ANS: C


Which economist is famous for his theory of comparative advantage?
a. Karl Marx
b. John Maynard Keynes
c. F. Hayek
d. David Ricardo
ANS: D


According to Saint Thomas Aquinas, value is determined by God, but prices by:
a. Firms
b. People 109
c. Government
d. Lord
ANS: B


Economic models are:
a. Base on scientific reality
b. Built with assumptions
c. Useless if they are simple
d. Created to duplicate reality
ANS: B


The concept “Mathematical models of financial” and “debt- deflation” was introduced by:
a. Ben Bernanke
b. N. Gregory Mankiw
c. Stanley Fischer
d. Steve Keen
ANS: D


The Dynamics of auctions is also known as:
a. Hicksian auction
b. Marshallian auction
c. Vickrey auction
d. Ricardian auction
ANS: C


The main contribution of J. M. Clark in his field:
a. Workable competition
b. Workable in-competition
c. Both of them
d. None of them
ANS: A


Thorstein Veblen’s distinction between “institutions” and “technology”, contemporary economists is called:
a. Veblenian technology
b. Veblenian effect
c. Veblenian dichotomy
d. None of the above
ANS: C


Who said “W. C. Mitchell iş generally considered primarily an empirical scientist rather than a theorist”.
a. Milton Friedman
b. Paul A. Samuelson
c. Gorge Stigler
d. Henry George
ANS: A


Real Balance Effect that shows:
a. Keynes effect and Hicks effect
b. Keynes effect and Marshallian effect
c. Keynes effect and Pigou effect
d. Hicks effect and Pigou effect
ANS: C


Trade-offs are required because wants are unlimited and resources are
a. Unlimited
b. Efficient
c. Marginal
d. Scarce
ANS: D


Under decreasing opportunity costs, the PPC is:
a. Convex to the origin
b. Concave to the origin
c. Vertical axis
d. Horizontal axis
ANS: A


Main contribution of Steven Ng-Sheong Cheung’ in his field:
a. Transaction costs and Interest
b. Transaction costs and property rights
c. Transaction costs and profits
d. None of the above
ANS: B


The term ‘economic man was coined by:
a. J.S. Mill
b. J.R. Hicks
c. J. M. Keynes
d. Adam smith
ANS: D


Which of the following economist focuses on value in exchange?
a. Adam Smith
b. David Ricardo
c. J.S. Mill
d. Thomas Malthus
ANS: A


Macroeconomics is also known as:
a. Price theory
b. Theory of income and employment
c. Economics of aggregate
d. Both (b) and (c)
ANS: D


Which definition of economics is known as universal definition of economics’:
a. Adam Smith’s definition
b. Alfred Marshall’ s definition
c. Lionel Robbins’s definition
d. Paul A. Samuelson’s definition
ANS: C


What classical economic theory did Adam Smith employ to describe how prices were set by mercantilists?
a. General equilibrium theory
b. Monopoly pricing
c. The paradox ot price
d. Perfect competition
ANS: B


According to classical economists, savings are equal to investment through flexibility of:
a. Interest rate
b. Price
c. Output
d. Money
ANS: A


The basic economic problems are common to
a. Capitalism
b. Socialism
c. Mixed economy
d. All the above
ANS: D


Goods produced for use in future productive process are called:
a. Intermediate goods
b. Final goods
c. Consumer goods
d. Capital goods
ANS: D


Who wrote the article ‘Laws of Returns under Competitive Conditions’?
a. Joan Robinson
b. E.H. Chamberlin
c. A.C. Pigou
d. P. Sraffa
ANS: D


A simplified representation of a real situation is called:
a. Theory
b. Economic Model
c. Hypotheses
d. Evidence
ANS: B


Under increasing opportunity costs; the PPC is:
a. Convex to the origin
b. Concave to the origin
c. Vertical axis
d. Horizontal axis
ANS: B


There are___ basic economics activities:
a. Two
b. Three
c. Four
d. Five
ANS: B


In which of the following economies does the government decide how to use the factors of production?
a. Market economy
b. Traditional economy
c. Command economy
d. Free-trade economy
ANS: C


Economics is a:
a. Physical science
b. Natural science
c. Social science
d. Science of wealth
ANS: C


The concept *circular cumulative causation was developed by:
a. Gunnar Myrdal
b. Simon Kuznets
c. Tjalling Koopmans
d. None of the above
ANS: A


Under constant opportunity costs, the PPC is:
a. Upward slope
b. Downward slope
c. Straight line
d. Vertical axis
ANS: C


The term Creative destruction was introduced by American economist:
a. Simon Kuznets
b. Tjalling Koopmans
c. Joseph Schumpeter
d. Theodore Schultz
ANS: C


The theory of Unlimited supply of labor was proposed by:
a. Paul A. Samuelson
b. Robert Solow
c. Ranger Nurkse
d. Arthur Lewis

ANS: D


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Introduction to Economics MCQs

Macroeconomics distinguishes between the real economy and:
a. virtual economy
b. normative economy
c. underground economy
d. monetary economy
ANS: D


Who is assumed as the father of Economics?
a. Adam Smith
b. Lionel Robinson
c. Alfred Marshall
d. George Bernard
ANS: A


The wealth concept was introduced by:
a. Alfred Marshall
b. Adam Smith
c. Robbins
d. Samuelson
ANS: B


Famous Pin production example is related to:
a. Alfred Marshall
b. J. M. Keynes
c. Adam Smith
d. Karl Marx
ANS: C


According to Robbins, economics is
a. Science of wealth
b. Science of national welfare
c. Science of scarcity
d. Science of growth and development
ANS: C


Robbins’s Definition of economics was criticized by:
a. Alfred Marshal!
b. J.B. Clark
c. Beveridge and Piguo
d. P. A. Samuelson
ANS: C


Black Tuesday is:
a. 24 October 1929
b. 27 October 1929
c. 29 October 1929
d. 27 October 1929
ANS: C


Who expressed the view that Economics is neutral between ends:
a. Lionel Robbins
b. Alfred Marshall
c. A. C. Pigou
d. Adam smith
ANS: A


The existence of both public and private sector enterprises constitutes
a. Capitalist economy
b. Mixed economy
c. Socialist economy
d. None of the Above
ANS: B


During the years 1932-1937, the level of unemployment in the United States of America was
a. 10 million
b. 15 million
c. 20 million
d. None of the above.
ANS: B


The ‘Great Depression in 1929, created a lot of:
a. Involuntary Unemployment
b. Cyclical unemployment
c. Structural unemployment
d. Voluntary unemployment
ANS:


According to David C Wheelock, Great Depression was caused by
a. Misguided Labor Policies
b. Misguided Wages Policies
c. Misguided classical Polices
d. Misguided government policies
ANS: D


Economics is the gospel of mammon. Whose statement is this?
a. Carlyle
b. Ruskin
c. Arnold
d. Walras
ANS: A


According to John W. Goodwin, there are ____distinct methods used by economists to describe relationships.
a. Two
b. Three
c. Four
d. Five
ANS: C


The former Soviet Union was an example of:
a. A planned economy
b. Free-market/capitalism
c. Dictatorship
d. A mixed economy
ANS: A


The level of unemployment in the United States of America was 15 million.
a. 1929-1933
b. 1930-1930
c. 1933-1937
d. 1932-1937
ANS: C


Drain Theory relates to which economist:
a. Dadabhai Naoroji
b. Amit Mitra
c. Bimal Jalan
d. V.K.R.V Rao
ANS: A


According to Arthur O’Sullivan, “During the Great Depression in the 1930s nearly of the US labor force was unemployed.
a. One-second
b. One-third
c. One-fourth
d. One-fifth
ANS: C


When did the Great Depression hit the United States in:
a. 1933
b. 1929
c. 1932
d. 1923
ANS: B


According to Marc Lieberman, ‘Preferences that satisfy:
a. Two conditions
b. Three conditions
c. Four conditions
d. Six conditions
ANS: A


J. S. Mill’s book “Principle of political economy” (1848) is also known as:
a. Bible of capitalism
b. Bible of socialism
c. Bible of economists
d. None of these
ANS: C


The production possibility curve is concerned with:
a. Resources of the economy
b. The interest of the economy
c. Limitations of the economy
d. Qualities of the economy
ANS: A


Scarcity means:
a. Nil resources
b. Limited resources
c. Many resources
d. Extra resources
ANS: B


Labor theory was first rejected by:
a. Samuelson
b. Adam smith
c. Karl Marx
d. Ricardo
ANS: C


Price mechanism has also been given the name:
a. Laisseze-Faire
b. Ricardian-Faire
c. Price system
d. None of these
ANS: A


General equilibrium is concerned with the simultaneous equilibrium of:
a. Few economics agents
b. Two economics agents
c. Many economics agents
d. All the economic agents
ANS: D


In the Ricardian theory of value, the stress has been made on:
a. Marginal cost
b. Production cost
c. Labor cost
d. Collection cost
ANS: A


Traditionally, the study of the determination of price is called:
a. Theory of prices
b. Theory of value
c. Theory of importance
d. Theory of cost
ANS: B


Marshall’s demand-supply model represents the:
a. General equilibrium
b. Partial equilibrium
c. Both of them
d. None of them
ANS: B


‘positive and normative economics is also called:
a. Economics theory
b. Economics policy
c. Both of them
d. None of them
ANS: A


According to classical economists in the short run production depends upon the:
a. Unit of labor
b. Unit of capital
c. Both of them
d. None of them
ANS: A


The water diamond paradox was first resolved with the help of:
a. Individual theory of value
b. Consumer theory of value
c. The labor theory of value. Producer theory of value
ANS: C


Who is the author of the ancient book on economics, Arthashastra?
a. Kautilya
b. Chanakya
c. Sushrut
d. Bhattacharya
ANS: B


Who wrote the “Principles of Economics”?
a. Adam Smith
b. L. Robins
c. Alfred Marshall
d. J. M Keynes
ANS: C


Marshall’s definition of economics was strongly criticized by:
a. Adam Smith
b. Prof Piguo
c. Prof Robbins
d. None of the above
ANS: C


The problem of scarcity and choice is called:
a. Economic problem
b. Social problem
c. Political problem
d. Ethical problem
ANS: A


The main contribution of Alfred Marshall is in the field of:
a. Research into the mathematical
b. Principal of the theory of wealth
c. Economics of labor
d. Theory of demand
ANS: D


The main contribution of Prof. Robbins is in the field of
a. Human welfare
b. National income
c. The multiplicity of want and scarcity of means
d. Elasticity of demand
ANS: C


The main contribution of Prof. Allen is in the field of.
a. Fixation of price
b. Arc elasticity of demand
c. Cross elasticity of demand
d. Income distribution
ANS: B


The main contribution of Malthus is in the field of:
a. Consumption expenditure
b. Problems of population
c. Division of labor
d. Indivisible Hand
ANS: B


The main contribution of David Ricardo is in the field of:
a. Wages of labor
b. Factor pricing
c. Economics rent
d. None of these
ANS: C


Who has given scarcity a definition of economics?
a. Adam smith
b. Marshall
c. Robbins
d. Robertson Workable
ANS: C


The Concept of ‘Competition’ was first put forward by:
a. J. M. Clark in 1940
b. J. M. Keynes in 1940
c. J. R. Hicks in 1940
d. J. K. Galbraith in 1940
ANS: A


Prof.J. M. Clark’s Workable Competition is classified into:
a. Two types
b. Three types
c. Four types
d. Neither (a) nor (b)
ANS: B


The term Value-in-use and ‘value- in-exchange were invented by:
a. David Ricardo
b. Adam Smith.
c. J. S. Mill
d. J. B. Say
ANS: B


The term ‘Static’ and Dynamic was introduced in economics by:
a. J. S. Mill
b. A. C. Pigou
c. Alfred Marshall
d. Adam Smith
ANS: A


The term economic goods were coined by:
a. A. C. Pigou
b. Alfred Marshall
c. Nassau William Senior
d. Friedrich List
ANS: B


According to Say’s law of the market, the money remains:
a. Increasing
b. Decreasing
c. Neutral
d. Both (a) and (c)
ANS: C


A. C. Pigou explained Say’s law of market with the help of:
a. Money market analysis
b. Capital market analysis
c. Labor market analysis
d. Good market analysis
ANS: C


Karl Marx built his economic analysis upon:
a. Mill’s theories
b. Adam Smith theories
c. Ricardo’s theories
d. Both (a) and (c)

ANS: C


Introduction to Economics MCQs/ Economics MCQs/ Microeconomics MCQs/ Economics Lecturer MCQs/ MCQs of Economics/ Most repeated MCQs of Economics/ Economics Lecturer Solved Past Papers/ Previous Test of Economics Lecturer/ SS Economics Previous Tests/ Lecturer Economics Previous Tests


Introduction to Economics MCQs

The term ‘Invisible Handshake was coined by:
a) Robert Solow
b) Arthur Okun
c) Maurice Allais
d) Trygve Haavelmo
ANS: B


The term Invisible Hand was coined by:
a) David Ricardo
b) J. S. Mill
c) John Mill
d) Adam Smith
ANS: D


In economics the term, value means always:
a) Value in use
b) Value in exchange
c) Both of them
d) None of them
ANS: B


The subject matter of Microeconomics focuses on:
a) Price determination
b) Income determination
c) Both of them
d) None of them
ANS: A


According to economists and hoi polloi, our economic system is most
a. Easy
b. Complicated
c. Difficult
d. None of the above
ANS: B


Who said “Economics as the Science which treats wealth
a. A. C. Pigou
b. J. C. L. Sismondi
c. J.B. Say
d. All of the above
ANS: C


According to Ruskin Adam Smith as half-bred and:
a. Half imprudence man
b. Half-witted man
c. Both (a) and (b)
d. None of them
ANS: B


The Welfare definition of economics related to which school of thought:
a. Classical
b. Modern
c. Neo-classical
d. Both (a) and (c)
ANS: C


Alfred Marshall’s definition of economics was criticized by:
a. Lionel Robbins
b. Paul A. Samuelson
c. J. M. Keynes
d. Both (a) and (c)
ANS: A


Who said Why talk of welfare at all?
a. L. Lionel Robbins
b. F.Y. Edgeworth
c. Irving Fisher
d. All of the above
ANS: A


According to J. M. Keynes economics is a:
a. Normative science
b. Pure science
c. Both of them
d. None of them
ANS: B


Paul. A. Samuelson of economics related to:
a. Steady-state aspect
b. Static aspect
c. Dynamic aspect
d. All of the above
ANS: C


The slope of the production possibilities curve is:
a. Marginal utility
b. Always linear
c. The same as the demand curve
d. Marginal opportunity costs
ANS: D


Lionel Robbins. W. N. Senior and Milton Friedman have described economics as a:
a. Positive science
b. Normative science
c. Both of them
d. None of them
ANS: A


According to most modern economists economics is a:
a. Positive science
b. Normative science
c. Both of them
d. None of them
ANS: C


Alfred Marshall, A. C. Pigou, Hawtrey, and J. M. Keynes are:
a. Positive economist
b. Normative economist
c. Steady-state economists
d. All of the above
ANS: B


According to Alfred Marshall Law of economics are:
a. Qualitative nature
b. Quantitative nature
c. Both of them
d. None of them
ANS: A


According to economists, in the 19th and 20 centuries, economists adopted ____ economic models method:
a. Two
b. Four
c. Six
d. Eight
ANS: A


According to Abba Lerner Deductive method as
a. Roundtable analysis
b. Armchair analysis
a. Both (a) and (b)
d. None of them
ANS: B


Black Monday is:
a. 19 October 1987
b. 19 October 1988
c. 19 October 1989
d. 190ctober 1990
ANS: A


Black Wednesday is:
a. 16 September 1991
b. 16 September 1992
c. 16 September 1992
d. None of the above
ANS: B


The Deductive method is also known as:
a. Analytical method
b. Abstract method
c. Prior method
d. All of the above
ANS: D


The most classical and neo-classical schools of economists, David Ricardo, W. N. Senior, Cairnes, J.S. Mill, Malthus, Alfred Marshall, A. C. Pigou, applied the:
a. Deductive method
b. Inductive method
c. Both of them
d. None of them
ANS: A


The Inductive method is also called:
a. Empirical method
b. Historical method
c. Realistic method
d. All of the above
ANS: D


The inductive method was first adopted by German
a. Liberal School of Economists
b. Historical School of Economists
c. Classical School of Economists
d. Traditional School of Economists
ANS: B


According to modern economist Inductive method is a’
a. Static
b. Steady-state
c. Dynamic
d. Both (a) and (c)
ANS: C


The concept of Learning by doing was given by:
a. J. R. Hicks
b. Kenneth Arrow
c. Joan Robinson
d. Nicholas Kaldor
ANS: B


Traditionally, the study of the determination of price is called:
a. Production cost
b. Labor cost
c. Collection cost
d. Marginal cost
ANS: D


The stable cobweb model is:
a. Dynamic model
b. Steady-state model
c. Simple model
d. Both (a) and (o)
ANS: D


According to Philosophers, the value concerning:
a. Use
b. Exchange
c. Both of them
d. None of them
ANS: A


According to economists, the value concerning:
a. Relative prices
b. Use
c. Exchange
d. Both (a) and (c)
ANS: D


According to Marginalists, the marginal usefulness and marginal cost determine the:
a. Wage of labor units
b. Price of any commodity
c. Profits of any system
d. Cost of any firm
ANS: B


According to the marginal school of thought, the supply curve slope is
a. Positive
b. Negative
c. Neutral
d. None of the above
ANS: A


The Marshallian demand and supply model resolved the:
a. Air-diamond paradox
b. Pigouvian -paradox
c. Water-diamond paradox
d. Hicksian paradox
ANS: C


The relationship between opportunity cost and money cost (Money C) is:
a. Negative
b. Positive
c. No relationship
d. Both (a) and (b)
ANS: B


Micro means:
a. Millionth part of a thing
b. Billionth part of a thing
c. Trillionth part of a thing
d. None of the above
ANS: A


The Production Possibility curve slope is always:
a. Upward to the left
b. Upward to the right
c. Downward to the right
d. Downward to the left
ANS: C


A typical PPC curve always:
a. Bowed inward
b. Bowed outward
c. Both of them
d. None of them
ANS: B


The Production Possibility Curve (PPC) is also known as
a. Production Possibility Frontier
b. Production Possibility Transformation
c. Both (a) and (b)
d. None of these
ANS: C


If the elasticities of supply and demand are equal to each other. The cobweb model will be:
a. Dynamic
b. Stable
c. Both of them
d. None of them
ANS: B


The Production possibility curve is:
a. Marginal Rate of Product Transformationxy
b. Marginal Rate of Technical Substitutionxy
c. Marginal rate of substitution
d. Marginal rate of transformation
ANS: A


Capitalism is also called:
a. Price system
b. Laissez-faire
c. Market economy
d. All of the above
ANS: D


Socialism is also known as:
a. Communism
b. Planned economy
c. Both of them
d. None of them
ANS: C


The intellectual father of modern scientific socialism:
a. Karl Marx
b. Alfred Marshal
c. J. M. Keynes
d. All of the above
ANS: A


Russia adopted socialism in 1917, Which time chain adopted socialism in:
a. 1939
b. 1949
c. 1959
d. None of these
ANS: B


Classical economists believed in the Iron law of wages:
a. Adam Smith
b. David Ricardo
c. J. S. Mill
d. W. S. Senior
ANS: B


According to Lionel Robbins, Human wants are
a. Thousands
b. A Few
c. Various
d. Innumerable
ANS: D


According to Most Neo-classical economists, Utility is also termed as:
a. Value in exchange
b. Value in use
c. Both of them
d. None of them
ANS: B


According to modern economics, what is the nature of the problem of scarcity?
a. Comparative
b. Reciprocal
c. External
d. Both (a) and (c)
ANS: A


The term economics is a social science was coined by
a. Adam Smith
b. Alfred Marshall
c. Lionel Robbins
d. J. S. Mill

ANS: B


 

Introduction to Economics MCQs Read More »

Econometrics MCQs

Econometrics MCQs/ MCQs of Econometrics/ Economics MCQs/ Economics Lecturer MCQs/ MCQs of Economics/ Most repeated MCQs of Economics/ Economics Lecturer Solved Past Papers/ Previous Test of Economics Lecturer/ SS Economics Previous Tests/ Lecturer Economics Previous Tests

Econometrics MCQs

The regression line was first used by:

a. Francis Galton

b. Ragnar Frisch

c. Adam Smith

d. All of the above

ANS: A


The term ‘econometrics was introduced by Norwegian statistician and economist Ragnar Frisch in:

a. 1924

b. 1925

c. 1926

d. 1927

ANS: C


Econometrics may be defined as the social science in which the tools of economic theory, mathematical and statistical inference are applied to the analysis of economic phenomena” who said it?

a. Gerhard Tintner

b. Arthur S. Goldberger

c. Damodar N Gujarti

d. Sangeetha

ANS: A


The correlation coefficient must lie in the range from:

a. -1 to +1

b. +1 to -1

c. 1 < r < infinity

d. 0 < r < 1

ANS: A


‘e’ is called

a. Residual

b. Error term

c. Both a and b

d. None of these

ANS: C


OLS stands for:

a. Ordinary least squares

b. Ordinary linear squares

c. Ordinary least Squares

d. None of these

ANS: A


The term ‘Regression’ was introduced by:

a. K. Pearson

b. M. G, Kendall

c. Fagnar Frisch

d. Francis Galton

ANS: D


The regression equation is also called:

a. Predication equation

b. Estimating equation

c. Line of average relationship

d. All of the above

ANS: D


In a regression line of Y and X, the variable X is known as:

a. Regressor

b. Explanatory variable

c. Independent variable

d. All of the above (answer)

ANS: D


The sample correlation coefficient is also known as:

a. Pearson correlation coefficient

b. product-moment correlation coefficient

c. both (a) and (b)

d. none of the above

ANS: C


Three types of data:

a. Time series, cross-section, secondary data

b. Time series, cross-section, primary data

 

c. Time series, cross-section, pooled data

d. Time series, cross-section, panel data

ANS: D


Y = B1+B2X1 is called

a. Simple regression function

b. Parametric function

c. Population regression function

d. All of above

ANS: A


An estimator is also known as:

a. Statistic

b. Sample

c. Both a and b

d. None of these

ANS: C


The error term (u) is:

a. Actual – estimated values

b. Actual + estimated values

c. Notation d. None of these

ANS:  A


The variable appearing on the left side of the equality sign is called the:

a. Dependent variable

b. Independent variable

c. Endogenous variable

d. Both (a) and (b)

ANS: D


In the Keynesian consumption function, consumption777 is the:

a. Dependent variable

b. Independent variable

c. Explained variable

d. Both (a) and (c)

ANS: D


If its means and variance do not change systematically over time. Is known as:

a. Time series is non-stationary

b. Time series is stationary

c. Both (a) and (b)

d. None of them

ANS: B


When one or more variables are collected at the same point in time, is known as:

a. Time series data

b. Cross-section data

c. Panel data

d. Both (a) and (b)

ANS: B


In a simple regression model Y= a+B₁X₁+μ. The B₁ represents:

a. Slope & Regression coefficient

b. Induced & Variable

c. Both (a) and (b)

d. None of the above

ANS: C


In the regression specification, Y=a+B₁X₁+e is called the parameter

a. Intercept & fixed

b. Regression constant

c. Autonomous

d. All of the above

ANS: D


Which of the following method used for the detection of heteroscedasticity?

a. Informal methods

b. Formal methods

c. Both of them

d. None of them

ANS: C


Non-spherical errors refer to:

a. Heteroscedasticity

b. Auto-correlated errors

c. Both (a) and (b)

d. None of them

ANS: C


If r+-, the two lines of regression are:

a. coincident

b. parallel

c. perpendicular to each other

d. none of the above

ANS: A


If r=1, the angle between the two lines of regression is:

a. 0⁰

b. 90⁰

c. 60⁰

d. 30⁰

ANS: A


If r =0, the lines of regression are:

a. Coincident

b. Parallel

c. Perpendicular to each other

d. None of the above

ANS: C


The regression coefficient is independent of:

a. Origin

b. Scale

c. Both origin and scale

d. Neither origin nor scale

ANS: A


The idea of product-moment correlation was given by:

a. R. A. Fisher

b. Sir Francis Galton

c. Karl Pearson

d. Spearman

ANS: C


The correlation coefficient was invented in the year::

a. 1910

b. 1890

c. 1908

d. None of the above

ANS: B


If ‘r’ is the simple correlation, the quantity (1-r2) is called:

a. Coefficient of determination

b. Coefficient of non-determination

c. Coefficient of alienation

d. None of the above

ANS: B


Autocorrelation is also known as:

a. Bi-serial correlation

b. Serial correlation

c. Spearman’s correlation

d. None of the above

ANS: B


The range of partial correlation coefficient is:

a. 0 to 1

b. 0 to ∞o

c. -1 to 1

d. -∞ to ∞

ANS: C


The range of partial regression coefficient is:

a. -1 to 1

b. 0 to 1

c. 0 to ∞

d. -∞o to ∞

ANS: D


The correlation between the two variables is -1, there are:

a. Perfect positive correlation

b. Perfect negative correlation

c. Perfect correlation

d. No correlation

ANS: B


The correlation between the two variables is unity (+1), there is:

a. Perfect positive correlation

b. Perfect negative correlation

c. Perfect correlation

d. No correlation

ANS: A


The function Y = Bo + B1X1 + B2X₂ represents:

a. A hyperbola

b. An exponential curve

c. A parabola

d. All of the above

ANS: C


Most economic variables belong to:

a. Interval scale

b. Ordinal scale

c. Ratio scale

d. Nominal scale

ANS: C


 

Econometrics MCQs Read More »

Macroeconomics MCQs

Macroeconomics MCQs for all exams


What is Gross Domestic Product (GDP)?
a) The value of all goods and services produced within a country’s borders in a specific period.
b) The value of all goods and services produced by a country’s citizens in a specific period.
c) The value of all goods and services consumed by a country’s citizens in a specific period.
Answer: a


What is inflation?
a) The rate at which the general level of prices for goods and services is increasing.
b) The rate at which the general level of prices for goods and services is decreasing.
c) The rate at which the supply of money in the economy is increasing.
Answer: a


What is fiscal policy?
a) The use of government spending and taxation to influence the economy.
b) The use of interest rates to influence the economy.
c) The use of trade policies to influence the economy.
Answer: a


What is monetary policy?
a) The use of interest rates to influence the economy.
b) The use of government spending and taxation to influence the economy.
c) The use of trade policies to influence the economy.
Answer: a


Macroeconomics MCQs


What is the Phillips curve?
a) A curve that shows the relationship between unemployment and inflation.
b) A curve that shows the relationship between GDP and inflation.
c) A curve that shows the relationship between interest rates and inflation.
Answer: a


What is the difference between nominal and real GDP?
a) Nominal GDP is adjusted for inflation, while real GDP is not.
b) Real GDP is adjusted for inflation, while nominal GDP is not.
c) Nominal GDP is adjusted for population growth, while real GDP is not.
Answer: b


What is the unemployment rate?
a) The percentage of the total population that is employed.
b) The percentage of the labor force that is unemployed.
c) The percentage of the total population that is not in the labor force.
Answer: b


What is the difference between a recession and a depression?
a) A recession is a mild economic contraction, while a depression is a severe economic contraction.
b) A recession is a severe economic contraction, while a depression is a mild economic contraction.
c) There is no difference between a recession and a depression.
Answer: a


Macroeconomics MCQs


What is the difference between a trade deficit and a trade surplus?
a) A trade deficit occurs when a country’s imports exceed its exports, while a trade surplus occurs when a country’s exports exceed its imports.
b) A trade deficit occurs when a country’s exports exceed its imports, while a trade surplus occurs when a country’s imports exceed its exports.
c) There is no difference between a trade deficit and a trade surplus.
Answer: a


What is the difference between absolute advantage and comparative advantage?
a) Absolute advantage refers to a country’s ability to produce a good more efficiently than another country, while comparative advantage refers to a country’s ability to produce a good at a lower opportunity cost than another country.
b) Absolute advantage refers to a country’s ability to produce a good at a lower opportunity cost than another country, while comparative advantage refers to a country’s ability to produce a good more efficiently than another country.
c) There is no difference between absolute advantage and comparative advantage.
Answer: a


What is the difference between monetary policy and fiscal policy?
a) Monetary policy involves the use of interest rates and the money supply to influence the economy, while fiscal policy involves the use of government spending and taxation.
b) Monetary policy involves the use of government spending and taxation to influence the economy, while fiscal policy involves the use of interest rates and the money supply.
c) There is no difference between monetary policy and fiscal policy.
Answer: a


Macroeconomics MCQs past papers mcqs


What is the difference between demand-side and supply-side economics?
a) Demand-side economics focuses on stimulating aggregate demand to boost economic growth, while supply-side economics focuses on increasing the production capacity of the economy.
b) Supply-side economics focuses on stimulating aggregate demand to boost economic growth, while demand-side economics focuses on increasing the production capacity of the economy.
c) There is no difference between demand-side and supply-side economics.
Answer: a


What is the difference between a fixed exchange rate and a floating exchange rate?
a) A fixed exchange rate is determined by the government and remains constant, while a floating exchange rate is determined by the market and can fluctuate.
b) A floating exchange rate is determined by the government and remains constant, while a fixed exchange rate is determined by the market and can fluctuate.
c) There is no difference between a fixed exchange rate and a floating exchange rate.
Answer: a


What is the difference between a budget deficit and a national debt?
a) A budget deficit occurs when government spending exceeds government revenues in a single year, while a national debt is the total amount of money owed by the government.
b) A budget deficit occurs when government revenues exceed government spending in a single year, while a national debt is the total amount of money owed by the government.
c) There is no difference between a budget deficit and a national debt.
Answer: a


Macroeconomics MCQs


What is the difference between economic growth and economic development?
a) Economic growth refers to an increase in the quantity of goods and services produced in an economy, while economic development refers to an improvement in the quality of life and well-being of a society.
b) Economic development refers to an increase in the quantity of goods and services produced in an economy, while economic growth refers to an improvement in the quality of life and well-being of a society.
c) There is no difference between economic growth and economic development.
Answer: a


What is the difference between the short-run and the long-run in macroeconomics?
a) The short-run is a period of time when some factors of production are fixed, while the long-run is a period of time when all factors of production are variable.
b) The short-run is a period of time when all factors of production are variable, while the long-run is a period of time when some factors of production are fixed.
c) There is no difference between the short-run and the long-run in macroeconomics.
Answer: a


What is the difference between nominal and real interest rates?
a) Nominal interest rates are the stated interest rates on a loan or investment, while real interest rates are adjusted for inflation.
b) Real interest rates are the stated interest rates on a loan or investment, while nominal interest rates are adjusted for inflation.
c) There is no difference between nominal and real interest rates.
Answer: a


Macroeconomics MCQs Questions and answers


What is the difference between a public good and a private good?
a) A public good is non-excludable and non-rivalrous, while a private good is excludable and rivalrous.
b) A public good is excludable and rivalrous, while a private good is non-excludable and non-rivalrous.
c) There is no difference between a public good and a private good.
Answer:


What is the difference between a recession and a depression?
a) A recession is a decline in economic activity that lasts for at least two consecutive quarters, while a depression is a severe and prolonged recession.
b) A depression is a decline in economic activity that lasts for at least two consecutive quarters, while a recession is a severe and prolonged recession.
c) There is no difference between a recession and a depression.
Answer: a


What is the Phillips curve?
a) A curve that shows the relationship between inflation and unemployment.
b) A curve that shows the relationship between interest rates and economic growth.
c) A curve that shows the relationship between government spending and taxation.
Answer: a


Macroeconomics MCQs solved


What is the difference between a trade deficit and a trade surplus?
a) A trade deficit occurs when a country imports more than it exports, while a trade surplus occurs when a country exports more than it imports.
b) A trade deficit occurs when a country exports more than it imports, while a trade surplus occurs when a country imports more than it exports.
c) There is no difference between a trade deficit and a trade surplus.
Answer: a


What is the difference between GDP and GNP?
a) GDP measures the value of goods and services produced within a country’s borders, while GNP measures the value of goods and services produced by a country’s citizens, regardless of their location.
b) GDP measures the value of goods and services produced by a country’s citizens, regardless of their location, while GNP measures the value of goods and services produced within a country’s borders.
c) There is no difference between GDP and GNP.
Answer: a


What is the difference between a recessionary gap and an inflationary gap?
a) A recessionary gap occurs when aggregate output is below potential output, while an inflationary gap occurs when aggregate output is above potential output.
b) A recessionary gap occurs when aggregate output is above potential output, while an inflationary gap occurs when aggregate output is below potential output.
c) There is no difference between a recessionary gap and an inflationary gap.
Answer: a


Macroeconomics MCQs with Answers


What is the difference between a progressive tax and a regressive tax?
a) A progressive tax is a tax that takes a larger percentage of income from higher earners, while a regressive tax takes a larger percentage of income from lower earners.
b) A progressive tax is a tax that takes a larger percentage of income from lower earners, while a regressive tax takes a larger percentage of income from higher earners.
c) There is no difference between a progressive tax and a regressive tax.
Answer: a


What is the difference between a demand shock and a supply shock?
a) A demand shock is a sudden change in consumer spending, while a supply shock is a sudden change in the availability of goods and services.
b) A supply shock is a sudden change in consumer spending, while a demand shock is a sudden change in the availability of goods and services.
c) There is no difference between a demand shock and a supply shock.
Answer: a


What is the difference between the nominal wage and the real wage?
a) The nominal wage is the amount of money paid for a job, while the real wage is the nominal wage adjusted for inflation.
b) The real wage is the amount of money paid for a job, while the nominal wage is the real wage adjusted for inflation.
c) There is no difference between the nominal wage and the real wage.
Answer: a


Macroeconomics MCQs for KPPSC Economics Lecturer


What is the difference between fiscal policy and monetary policy?
a) Fiscal policy refers to changes in government spending and taxation, while monetary policy refers to changes in the money supply and interest rates.
b) Fiscal policy refers to changes in the money supply and interest rates, while monetary policy refers to changes in government spending and taxation.
c) There is no difference between fiscal policy and monetary policy.
Answer: a


What is the difference between frictional unemployment and structural unemployment?
a) Frictional unemployment is unemployment that results from changes in the economy, while structural unemployment is unemployment that results from a mismatch between workers’ skills and available jobs.
b) Structural unemployment is unemployment that results from changes in the economy, while frictional unemployment is unemployment that results from a mismatch between workers’ skills and available jobs.
c) There is no difference between frictional unemployment and structural unemployment.
Answer: a


What is the difference between a stock and a bond?
a) A stock represents ownership in a company, while a bond represents a loan to a company or government.
b) A bond represents ownership in a company, while a stock represents a loan to a company or government.
c) There is no difference between a stock and a bond.
Answer: a


Macroeconomics MCQs/ Economics MCQs for Competitive Exams


What is the difference between expansionary monetary policy and contractionary monetary policy?
a) Expansionary monetary policy involves increasing the money supply and lowering interest rates to stimulate economic growth, while contractionary monetary policy involves decreasing the money supply and raising interest rates to reduce inflation.
b) Expansionary monetary policy involves decreasing the money supply and raising interest rates to reduce inflation, while contractionary monetary policy involves increasing the money supply and lowering interest rates to stimulate economic growth.
c) There is no difference between expansionary monetary policy and contractionary monetary policy.
Answer: a


What is the difference between a budget deficit and a national debt?
a) A budget deficit occurs when a government spends more than it collects in taxes in a given year, while a national debt is the total amount of money a government owes to its creditors.
b) A budget deficit occurs when a government collects more in taxes than it spends in a given year, while a national debt is the total amount of money a government owes to its creditors.
c) There is no difference between a budget deficit and a national debt.
Answer: a


Macroeconomics MCQs for Lecturer Economics


What is the difference between a fixed exchange rate and a floating exchange rate?
a) A fixed exchange rate is a system in which a country’s currency is pegged to the currency of another country or to a commodity, while a floating exchange rate is a system in which a country’s currency is determined by market forces.
b) A floating exchange rate is a system in which a country’s currency is pegged to the currency of another country or to a commodity, while a fixed exchange rate is a system in which a country’s currency is determined by market forces.
c) There is no difference between a fixed exchange rate and a floating exchange rate.
Answer: a


What is the difference between a recession and stagflation?
a) A recession is a decline in economic activity that is typically accompanied by falling prices, while stagflation is a situation in which the economy experiences both high inflation and high unemployment.
b) Stagflation is a decline in economic activity that is typically accompanied by falling prices, while a recession is a situation in which the economy experiences both high inflation and high unemployment.
c) There is no difference between a recession and stagflation.
Answer: a


For MicroEconomics MCQs Click HERE

Macroeconomics MCQs Read More »

Microeconomics MCQs


Microeconomics MCQs with Answers


What is the definition of microeconomics?
a. The study of the economy as a whole
b. The study of individual economic agents and their interactions
c. The study of government policies and their effects on the economy
d. The study of international trade and exchange rates
Answer: b. The study of individual economic agents and their interactions


What is the law of supply?
a. The higher the price, the less people are willing to buy a good or service
b. The lower the price, the more people are willing to buy a good or service
c. The higher the price, the more firms are willing to supply a good or service
d. The lower the price, the less firms are willing to supply a good or service
Answer: c. The higher the price, the more firms are willing to supply a good or service


What is the difference between a normal good and an inferior good?
a. Normal goods are always more expensive than inferior goods
b. Normal goods are those that people buy more of when their income increases, while inferior goods are those that people buy less of when their income increases
c. Inferior goods are always of lower quality than normal goods
d. Normal goods are those that people buy less of when their income increases, while inferior goods are those that people buy more of when their income increases
Answer: b. Normal goods are those that people buy more of when their income increases, while inferior goods are those that people buy less of when their income increases


Microeconomics MCQs for Lecturer Economics

What is the difference between a monopoly and a perfectly competitive market?
a. In a monopoly, there is only one seller, while in a perfectly competitive market, there are many sellers
b. In a monopoly, there is only one buyer, while in a perfectly competitive market, there are many buyers
c. In a monopoly, there are no barriers to entry, while in a perfectly competitive market, there are high barriers to entry
d. In a monopoly, the seller has complete control over the price, while in a perfectly competitive market, the price is set by the market
Answer: a. In a monopoly, there is only one seller, while in a perfectly competitive market, there are many sellers


What is the difference between explicit costs and implicit costs?
a. Explicit costs are those that require a monetary payment, while implicit costs do not require a monetary payment
b. Explicit costs are those that are incurred in the short run, while implicit costs are incurred in the long run
c. Explicit costs are those that are incurred by firms, while implicit costs are incurred by individuals
d. Explicit costs are those that are easy to calculate, while implicit costs are difficult to calculate
Answer: a. Explicit costs are those that require a monetary payment, while implicit costs do not require a monetary payment


What is the difference between a price floor and a price ceiling?
a. A price floor is a legal minimum price for a good or service, while a price ceiling is a legal maximum price
b. A price floor is a legal maximum price for a good or service, while a price ceiling is a legal minimum price
c. A price floor is set by the market, while a price ceiling is set by the government
d. A price ceiling is set by the market, while a price floor is set by the government
Answer: a. A price floor is a legal minimum price for a good or service, while a price ceiling is a legal maximum price


Microeconomics MCQs Past Paper MCQs

What is the law of demand?
a. The higher the price, the less people are willing to buy a good or service
b. The lower the price, the more people are willing to buy a good or service
c. The higher the price, the more firms are willing to supply a good or service
d. The lower the price, the less firms are willing to supply a good or service
Answer: b. The lower the price, the more people are willing to buy a good or service


What is the difference between a positive and a normative statement?
a. A positive statement is a statement of fact, while a normative statement is a statement of opinion
b. A positive statement is a statement of opinion, while a normative statement is a statement of fact
c. A positive statement is a statement about what ought to be, while a normative statement is a statement about what is
d. A positive statement is a statement about the future, while a normative statement is a statement about the past
Answer: a. A positive statement is a statement of fact, while a normative statement is a statement of opinion


Microeconomics MCQs for FPSC Economics Tests

What is the difference between a fixed cost and a variable cost?
a. A fixed cost is a cost that does not change with the level of output, while a variable cost is a cost that changes with the level of output
b. A fixed cost is a cost that changes with the level of output, while a variable cost is a cost that does not change with the level of output
c. A fixed cost is a short-term cost, while a variable cost is a long-term cost
d. A fixed cost is a cost that is easy to calculate, while a variable cost is difficult to calculate
Answer: a. A fixed cost is a cost that does not change with the level of output, while a variable cost is a cost that changes with the level of output


What is the difference between a private good and a public good?
a. Private goods are provided by the government, while public goods are provided by private companies
b. Private goods are excludable and rival, while public goods are non-excludable and non-rival
c. Private goods are non-excludable and non-rival, while public goods are excludable and rival
d. Private goods are non-rival, while public goods are rival
Answer: b. Private goods are excludable and rival, while public goods are non-excludable and non-rival


Microeconomics MCQs for KPPSC, PPSC, SPSC

What is the difference between marginal cost and average cost?
a. Marginal cost is the cost of producing one more unit of output, while average cost is the total cost divided by the total output
b. Marginal cost is the total cost divided by the total output, while average cost is the cost of producing one more unit of output
c. Marginal cost is a long-term cost, while average cost is a short-term cost
d. Marginal cost is a variable cost, while average cost is a fixed cost


What is the difference between perfect competition and monopolistic competition?
a. Perfect competition has many buyers and many sellers, while monopolistic competition has many buyers but few sellers
b. Perfect competition has few buyers but many sellers, while monopolistic competition has many buyers and few sellers
c. Perfect competition has identical products, while monopolistic competition has differentiated products
d. Perfect competition is a market structure with only one seller, while monopolistic competition is a market structure with only one buyer
Answer: c. Perfect competition has identical products, while monopolistic competition has differentiated products


Microeconomics MCQs ETEA, PTS, NTS, ATS

What is the difference between a normal good and an inferior good?
a. A normal good is a good that people buy more of when their income increases, while an inferior good is a good that people buy less of when their income increases
b. A normal good is a good that people buy less of when their income increases, while an inferior good is a good that people buy more of when their income increases
c. A normal good is a luxury good, while an inferior good is a necessity
d. A normal good is always more expensive than an inferior good
Answer: a. A normal good is a good that people buy more of when their income increases, while an inferior good is a good that people buy less of when their income increases


What is the difference between a firm’s total revenue and its profit?
a. Total revenue is the amount of money a firm makes from selling its products, while profit is the difference between total revenue and total cost
b. Total revenue is the difference between total cost and total profit, while profit is the amount of money a firm makes from selling its products
c. Total revenue is the amount of money a firm makes from selling its products minus its fixed costs, while profit is the amount of money a firm makes from selling its products minus all its costs
d. Total revenue is the amount of money a firm makes from selling its products plus its fixed costs, while profit is the amount of money a firm makes from selling its products minus its variable costs
Answer: a. Total revenue is the amount of money a firm makes from selling its products, while profit is the difference between total revenue and total cost


Microeconomics MCQs

What is the difference between a perfectly elastic demand curve and a perfectly inelastic demand curve?
a. A perfectly elastic demand curve is a demand curve that is horizontal, while a perfectly inelastic demand curve is a demand curve that is vertical
b. A perfectly elastic demand curve is a demand curve that is vertical, while a perfectly inelastic demand curve is a demand curve that is horizontal
c. A perfectly elastic demand curve is a demand curve that is steep, while a perfectly inelastic demand curve is a demand curve that is flat
d. A perfectly elastic demand curve is a demand curve that is flat, while a perfectly inelastic demand curve is a demand curve that is steep
Answer: a. A perfectly elastic demand curve is a demand curve that is horizontal,


What is the difference between a price floor and a price ceiling?
a. A price floor is a minimum price set by the government, while a price ceiling is a maximum price set by the government
b. A price floor is a maximum price set by the government, while a price ceiling is a minimum price set by the government
c. A price floor is a price set by the market, while a price ceiling is a price set by the government
d. A price floor and a price ceiling are the same thing
Answer: a. A price floor is a minimum price set by the government, while a price ceiling is a maximum price set by the government


Microeconomics MCQs

What is the difference between a positive externality and a negative externality?
a. A positive externality is a cost that is borne by a third party, while a negative externality is a benefit that is received by a third party
b. A positive externality is a benefit that is received by a third party, while a negative externality is a cost that is borne by a third party
c. A positive externality is a cost that is borne by the producer, while a negative externality is a benefit that is received by the producer
d. A positive externality is a benefit that is received by the producer, while a negative externality is a cost that is borne by the producer
Answer: b. A positive externality is a benefit that is received by a third party, while a negative externality is a cost that is borne by a third party


Microeconomics MCQs

What is the difference between a budget deficit and a national debt?
a. A budget deficit is the amount by which government spending exceeds government revenue in a single year, while a national debt is the total amount of money that a government owes
b. A budget deficit is the total amount of money that a government owes, while a national debt is the amount by which government spending exceeds government revenue in a single year
c. A budget deficit is the total amount of money that a government spends, while a national debt is the total amount of money that a government collects in taxes
d. A budget deficit and a national debt are the same thing
Answer: a. A budget deficit is the amount by which government spending exceeds government revenue in a single year, while a national debt is the total amount of money that a government owes


What is the difference between a public good and a private good?
a. A public good is a good that is provided by the government, while a private good is a good that is provided by a private company
b. A public good is a good that is non-rival and non-excludable, while a private good is a good that is rival and excludable
c. A public good is a good that is provided for free, while a private good is a good that is sold in the market
d. A public good is a good that is provided to individuals, while a private good is a good that is provided to the society
Answer: b. A public good is a good that is non-rival and non-excludable, while a private good is a good that is rival and excludable


Microeconomics MCQs

What is the difference between a monopoly and a perfectly competitive market?
a. A monopoly is a market with only one seller, while a perfectly competitive market is a market with many sellers
b. A monopoly is a market with many buyers, while a perfectly competitive market is a market with only one buyer
c. A monopoly is a market with no government intervention, while a perfectly competitive market is a market with government intervention
d. A monopoly and a perfectly competitive market are the same thing
Answer: a. A monopoly is a market with only one seller, while a perfectly competitive market is a market with many sellers


What is the difference between a normal good and an inferior good?
a. A normal good is a good for which demand increases as income increases, while an inferior good is a good for which demand decreases as income increases
b. A normal good is a good for which demand decreases as income increases, while an inferior good is a good for which demand increases as income increases
c. A normal good is a luxury good, while an inferior good is a necessity good
d. A normal good and an inferior good are the same thing
Answer: a. A normal good is a good for which demand increases as income increases, while an inferior good is a good for which demand decreases as income increases


Microeconomics MCQs

What is the difference between a short-run and a long-run in microeconomics?
a. The short-run is a period of time in which all inputs are fixed, while the long-run is a period of time in which some inputs can be varied
b. The short-run is a period of time in which some inputs can be varied, while the long-run is a period of time in which all inputs are fixed
c. The short-run is a period of time in which the market is not in equilibrium, while the long-run is a period of time in which the market is in equilibrium
d. The short-run and the long-run are the same thing
Answer: a. The short run is a period of time in which all inputs are fixed, while the long-run is a period of time in which some inputs can be varied


What is the difference between elasticity and inelasticity in microeconomics?
a. Elasticity refers to the degree of responsiveness of quantity demanded or supplied to changes in price, while inelasticity refers to the degree of unresponsiveness of quantity demanded or supplied to changes in price
b. Elasticity refers to the degree of unresponsiveness of quantity demanded or supplied to changes in price, while inelasticity refers to the degree of responsiveness of quantity demanded or supplied to changes in price
c. Elasticity refers to the degree of responsiveness of price to changes in quantity demanded or supplied, while inelasticity refers to the degree of unresponsiveness of price to changes in quantity demanded or supplied
d. Elasticity and inelasticity are the same thing
Answer: a. Elasticity refers to the degree of responsiveness of quantity demanded or supplied to changes in price, while inelasticity refers to the degree of unresponsiveness of quantity demanded or supplied to changes in price


For More Economics MCQs Click HERE

Microeconomics MCQs Read More »

Economy of Pakistan MCQs

What is the current gross domestic product (GDP) growth rate of Pakistan?
a) 2.8%
b) 3.9%
c) 4.8%
d) 5.7%
Answer: b) 3.9%

Which sector of the economy contributes the most to Pakistan’s GDP?
a) Agriculture
b) Manufacturing
c) Services
d) Mining and quarrying
Answer: c) Services

What is Pakistan’s current inflation rate?
a) 5.7%
b) 8.3%
c) 10.2%
d) 12.1%
Answer: d) 12.1%

Which of the following countries is Pakistan’s largest trading partner?
a) China
b) United States
c) United Kingdom
d) Saudi Arabia
Answer: a) China

What is the current unemployment rate in Pakistan?
a) 4.2%
b) 5.9%
c) 7.5%
d) 9.1%
Answer: d) 9.1%

What is the main source of revenue for the Pakistani government?
a) Income tax
b) Sales tax
c) Customs duties
d) Corporate tax
Answer: b) Sales tax

What is Pakistan’s current account deficit?
a) $1 billion
b) $3 billion
c) $5 billion
d) $7 billion
Answer: c) $5 billion

What is the largest source of remittances for Pakistan?
a) United States
b) United Kingdom
c) Saudi Arabia
d) United Arab Emirates
Answer: c) Saudi Arabia

What is the current literacy rate in Pakistan?
a) 45%
b) 55%
c) 65%
d) 75%
Answer: c) 65%

What is the current population of Pakistan?
a) 180 million
b) 200 million
c) 220 million
d) 240 million
Answer: c) 220 million

What is the main source of energy in Pakistan?
a) Coal
b) Oil
c) Gas
d) Hydropower
Answer: b) Oil

Which stock exchange is the largest in Pakistan?
a) Pakistan Stock Exchange (PSX)
b) Lahore Stock Exchange (LSE)
c) Karachi Stock Exchange (KSE)
d) Islamabad Stock Exchange (ISE)
Answer: a) Pakistan Stock Exchange (PSX)

What is Pakistan’s current public debt as a percentage of GDP?
a) 62%
b) 75%
c) 88%
d) 95%
Answer: b) 75%

Which of the following sectors in Pakistan is the most heavily regulated?
a) Agriculture
b) Manufacturing
c) Services
d) Mining and quarrying
Answer: a) Agriculture

What is the main export product of Pakistan?
a) Textiles
b) Petroleum products
c) Electronics
d) Chemicals
Answer: a) Textiles

What is the current foreign exchange reserve of Pakistan?
a) $10 billion
b) $15 billion
c) $20 billion
d) $25 billion
Answer: c) $20 billion

Which of the following is a major challenge facing Pakistan’s economy?
a) High inflation
b) Low population growth
c) High GDP growth rate
d) Low government spending
Answer: a) High inflation

Which of the following industries in Pakistan receives the most foreign direct investment (FDI)?
a) Energy
b) Telecommunications
c) Manufacturing
d) Construction
Answer: c) Manufacturing

What is the current size of Pakistan’s economy in terms of nominal GDP?
a) $220 billion
b) $300 billion
c) $400 billion
d) $500 billion
Answer: b) $300 billion

What is the current size of Pakistan’s economy in terms of purchasing power parity (PPP)?
a) $1.2 trillion
b) $1.5 trillion
c) $1.8 trillion
d) $2.1 trillion
Answer: c) $1.8 trillion

What is the current size of Pakistan’s agriculture sector as a percentage of GDP?
a) 15%
b) 20%
c) 25%
d) 30%
Answer: b) 20%

Which of the following sectors in Pakistan employs the most people?
a) Agriculture
b) Manufacturing
c) Services
d) Mining and quarrying
Answer: a) Agriculture

What is the current account deficit as a percentage of GDP in Pakistan?
a) 2.5%
b) 3.5%
c) 4.5%
d) 5.5%
Answer: b) 3.5%

What is the current level of foreign debt owed by Pakistan?
a) $50 billion
b) $75 billion
c) $100 billion
d) $125 billion
Answer: b) $75 billion

Which of the following industries in Pakistan has the highest potential for growth?
a) Textiles
b) Information technology
c) Pharmaceuticals
d) Automotive
Answer: b) Information technology

What is the current rate of interest on savings accounts in Pakistan?
a) 4%
b) 6%
c) 8%
d) 10%
Answer: a) 4%

What is the current rate of corporate tax in Pakistan?
a) 25%
b) 30%
c) 35%
d) 40%
Answer: a) 25%

Which of the following international organizations has provided financial assistance to Pakistan?
a) International Monetary Fund (IMF)
b) World Bank
c) Asian Development Bank (ADB)
d) All of the above
Answer: d) All of the above

What is the current level of foreign investment in Pakistan?
a) $5 billion
b) $10 billion
c) $15 billion
d) $20 billion
Answer: b) $10 billion

Which of the following sectors in Pakistan is most affected by climate change?
a) Agriculture
b) Manufacturing
c) Services
d) Mining and quarrying
Answer: a) Agriculture

What is the current rate of inflation in Pakistan?
a) 8%
b) 10%
c) 12%
d) 14%
Answer: b) 10%

What is the current unemployment rate in Pakistan?
a) 4%
b) 6%
c) 8%
d) 10%
Answer: c) 8%

Which of the following sectors in Pakistan has the highest share in exports?
a) Textiles
b) Information technology
c) Agriculture
d) Chemicals
Answer: a) Textiles

What is the current level of remittances sent by overseas Pakistanis?
a) $10 billion
b) $15 billion
c) $20 billion
d) $25 billion
Answer: c) $20 billion

Which of the following international credit rating agencies has rated Pakistan’s creditworthiness the lowest?
a) Standard & Poor’s
b) Fitch Ratings
c) Moody’s
d) None of the above
Answer: c) Moody’s

What is the current level of Pakistan’s public sector development program (PSDP) for the fiscal year 2022?
a) Rs. 900 billion
b) Rs. 1 trillion
c) Rs. 1.2 trillion
d) Rs. 1.4 trillion
Answer: c) Rs. 1.2 trillion

Which of the following industries in Pakistan is the most export-oriented?
a) Textiles
b) Telecommunications
c) Manufacturing
d) Services
Answer: a) Textiles

What is the current rate of sales tax in Pakistan?
a) 10%
b) 12%
c) 14%
d) 16%
Answer: c) 14%

What is the current level of foreign reserves held by the State Bank of Pakistan?
a) $12 billion
b) $18 billion
c) $24 billion
d) $30 billion
Answer: c) $24 billion

Which of the following international economic organizations has Pakistan recently become a member of?
a) European Union (EU)
b) Organization for Economic Cooperation and Development (OECD)
c) Shanghai Cooperation Organization (SCO)
d) World Trade Organization (WTO)
Answer: c) Shanghai Cooperation Organization (SCO)

Which of the following sectors in Pakistan has the highest share in the country’s total imports?
a) Textiles
b) Petroleum
c) Machinery
d) Electronics
Answer: b) Petroleum

What is the current level of Pakistan’s trade deficit?
a) $10 billion
b) $20 billion
c) $30 billion
d) $40 billion
Answer: d) $40 billion

What is the current level of Pakistan’s public debt as a percentage of GDP?
a) 60%
b) 70%
c) 80%
d) 90%
Answer: c) 80%

What is the current level of Pakistan’s foreign exchange reserves?
a) $20 billion
b) $30 billion
c) $40 billion
d) $50 billion
Answer: b) $30 billion

Which of the following sectors in Pakistan has the highest potential for job creation?
a) Agriculture
b) Information technology
c) Manufacturing
d) Services
Answer: b) Information technology

What is the current rate of corporate tax in Pakistan for companies listed on the stock exchange?
a) 20%
b) 25%
c) 30%
d) 35%
Answer: a) 20%

Which of the following international organizations has provided technical assistance to Pakistan in the field of taxation?
a) International Monetary Fund (IMF)
b) World Bank
c) Asian Development Bank (ADB)
d) Organisation for Economic Co-operation and Development (OECD)
Answer: d) Organisation for Economic Co-operation and Development (OECD)

What is the current level of Pakistan’s total public sector debt?
a) Rs. 30 trillion
b) Rs. 35 trillion
c) Rs. 40 trillion
d) Rs. 45 trillion
Answer: c) Rs. 40 trillion

Which of the following industries in Pakistan has the highest potential for export growth?
a) Textiles
b) Food processing
c) Information technology
d) Construction
Answer: c) Information technology

What is the current level of Pakistan’s foreign direct investment (FDI) inflows?
a) $1 billion
b) $2 billion
c) $3 billion
d) $4 billion
Answer: b) $2 billion

What is the current level of Pakistan’s total exports?
a) $20 billion
b) $25 billion
c) $30 billion
d) $35 billion
Answer: b) $25 billion

Which of the following industries in Pakistan has the highest potential for growth in the next 5 years?
a) Textiles
b) Agriculture
c) Energy
d) Information technology
Answer: d) Information technology

What is the current level of Pakistan’s foreign debt?
a) $50 billion
b) $60 billion
c) $70 billion
d) $80 billion
Answer: c) $70 billion

What is the current level of Pakistan’s foreign exchange reserves held by commercial banks?
a) $5 billion
b) $10 billion
c) $15 billion
d) $20 billion
Answer: d) $20 billion

Which of the following sectors in Pakistan has the highest share in the country’s total GDP?
a) Agriculture
b) Manufacturing
c) Services
d) Mining and quarrying
Answer: c) Services

What is the current level of Pakistan’s current account deficit?
a) $5 billion
b) $10 billion
c) $15 billion
d) $20 billion
Answer: b) $10 billion

Which of the following industries in Pakistan has the highest potential for import substitution?
a) Agriculture
b) Manufacturing
c) Services
d) Mining and quarrying
Answer: b) Manufacturing

What is the current level of Pakistan’s public debt held by foreign creditors?
a) $20 billion
b) $30 billion
c) $40 billion
d) $50 billion
Answer: a) $20 billion

What is the current level of Pakistan’s tax revenue as a percentage of GDP?
a) 10%
b) 12%
c) 14%
d) 16%
Answer: c) 14%

Which of the following industries in Pakistan has the highest potential for export diversification?
a) Textiles
b) Information technology
c) Agriculture
d) Chemicals
Answer: b) Information technology

What is the current level of Pakistan’s inflation rate?
a) 5%
b) 7%
c) 9%
d) 11%
Answer: d) 11%

Which of the following industries in Pakistan has the highest potential for innovation and technology development?
a) Textiles
b) Construction
c) Information technology
d) Retail
Answer: c) Information technology

What is the current level of Pakistan’s total public sector development expenditure?
a) Rs. 800 billion
b) Rs. 1 trillion
c) Rs. 1.2 trillion
d) Rs. 1.4 trillion
Answer: b) Rs. 1 trillion

Which of the following sectors in Pakistan has the highest share in the country’s total employment?
a) Agriculture
b) Manufacturing
c) Services
d) Mining and quarrying
Answer: a) Agriculture

What is the current level of Pakistan’s foreign exchange reserves held by the State Bank of Pakistan?
a) $10 billion
b) $15 billion
c) $20 billion
d) $25 billion
Answer: b) $15 billion

Which of the following industries in Pakistan has the highest potential for contributing to renewable energy production?
a) Textiles
b) Energy
c) Construction
d) Chemicals
Answer: b) Energy

What is the current level of Pakistan’s official unemployment rate?
a) 5%
b) 7%
c) 9%
d) 11%
Answer: d) 11%

Which of the following industries in Pakistan has the highest potential for improving the country’s balance of trade?
a) Textiles
b) Agriculture
c) Information technology
d) Construction
Answer: c) Information technology

What is the current level of Pakistan’s total public sector revenue?
a) Rs. 4 trillion
b) Rs. 5 trillion
c) Rs. 6 trillion
d) Rs. 7 trillion
Answer: c) Rs. 6 trillion

Which of the following international organizations has provided financial assistance to Pakistan for COVID-19 relief efforts?
a) International Monetary Fund (IMF)
b) World Bank
c) Asian Development Bank (ADB)
d) All of the above
Answer: d) All of the above

What is the current level of Pakistan’s literacy rate?
a) 56%
b) 62%
c) 68%
d) 74%
Answer: c) 68%

Which of the following industries in Pakistan has the highest potential for creating employment opportunities?
a) Textiles
b) Energy
c) Information technology
d) Agriculture
Answer: d) Agriculture

What is the current level of Pakistan’s ranking on the Ease of Doing Business Index 2020?
a) 100
b) 110
c) 120
d) 130
Answer: b) 110

Which of the following sectors in Pakistan has the highest potential for attracting foreign direct investment (FDI)?
a) Agriculture
b) Manufacturing
c) Services
d) Mining and quarrying
Answer: c) Services

What is the current level of Pakistan’s total investment-to-GDP ratio?
a) 10%
b) 15%
c) 20%
d) 25%
Answer: b) 15%

Which of the following industries in Pakistan has the highest potential for contributing to the country’s socio-economic development?
a) Textiles
b) Energy
c) Construction
d) Agriculture
Answer: d) Agriculture

What is the current level of Pakistan’s ranking on the World Happiness Report 2021?
a) 110
b) 120
c) 130
d) 140
Answer: d) 140

Which of the following industries in Pakistan has the highest potential for enhancing the country’s international competitiveness?
a) Textiles
b) Information technology
c) Agriculture
d) Mining and quarrying
Answer: b) Information technology

What is the current level of Pakistan’s ranking on the Global Innovation Index 2021?
a) 80
b) 90
c) 100
d) 110
Answer: d) 110

Which of the following international organizations has provided technical assistance to Pakistan for tax reforms?
a) International Monetary Fund (IMF)
b) World Bank
c) United Nations Development Programme (UNDP)
d) International Finance Corporation (IFC)
Answer: c) United Nations Development Programme (UNDP)

Economy of Pakistan MCQs Read More »

Development Economics MCQs

Which of the following is NOT a factor influencing economic development?
a) Natural resources
b) Political stability
c) Access to technology
d) Ethnic diversity
Answer: d) Ethnic diversity

Which of the following is a key component of human development?
a) Economic growth
b) Gender equality
c) Access to capital
d) Trade liberalization
Answer: b) Gender equality

What is the primary goal of development economics?
a) To promote economic growth
b) To reduce poverty
c) To achieve social welfare
d) To increase foreign investment
Answer: c) To achieve social welfare

Which of the following is NOT a characteristic of a developing country?
a) Low per capita income
b) High levels of poverty
c) High levels of education
d) Poor infrastructure
Answer: c) High levels of education

What is the significance of the Harrod-Domar model in development economics?
a) It explains how foreign aid can stimulate economic growth
b) It demonstrates the importance of savings and investment for economic development
c) It highlights the role of human capital in economic growth
d) It emphasizes the need for trade liberalization to promote economic development
Answer: b) It demonstrates the importance of savings and investment for economic development

What is the primary cause of income inequality in developing countries?
a) Lack of access to education
b) Inefficient government policies
c) Unequal distribution of resources
d) Cultural factors
Answer: c) Unequal distribution of resources

What is the main objective of microfinance programs in developing countries?
a) To provide financial assistance to small and medium-sized enterprises
b) To increase foreign investment
c) To improve access to education
d) To alleviate poverty by providing small loans to low-income individuals
Answer: d) To alleviate poverty by providing small loans to low-income individuals

Which of the following is a key challenge facing developing countries in the process of economic development?
a) Limited access to foreign aid
b) Political instability
c) High levels of corruption
d) Abundant natural resources
Answer: b) Political instability

What is the main difference between import substitution and export-led growth strategies?
a) Import substitution aims to reduce trade deficits, while export-led growth aims to increase trade surpluses
b) Import substitution focuses on developing domestic industries, while export-led growth focuses on promoting exports
c) Import substitution emphasizes the importance of foreign investment, while export-led growth does not
d) Import substitution involves reducing tariffs and other trade barriers, while export-led growth involves increasing tariffs and other trade barriers
Answer: b) Import substitution focuses on developing domestic industries, while export-led growth focuses on promoting exports

What is the role of the government in economic development?
a) To provide public goods and services
b) To promote foreign investment
c) To reduce income inequality
d) All of the above
Answer: d) All of the above

What is the significance of the Human Development Index (HDI) in development economics?
a) It measures a country’s economic growth rate
b) It measures a country’s level of industrialization
c) It measures a country’s level of human development based on indicators such as life expectancy, education, and income
d) It measures a country’s level of corruption
Answer: c) It measures a country’s level of human development based on indicators such as life expectancy, education, and income

What is the difference between economic growth and economic development?
a) Economic growth refers to an increase in the production of goods and services, while economic development refers to improvements in the quality of life of individuals
b) Economic growth refers to an increase in the standard of living, while economic development refers to an increase in the GDP
c) Economic growth refers to an increase in exports, while economic development refers to an increase in imports
d) Economic growth and economic development are interchangeable terms
Answer: a) Economic growth refers to an increase in the production of goods and services, while economic development refers to improvements in the quality of life of individuals

Which of the following is a potential negative consequence of globalization for developing countries?
a) Increased foreign investment
b) Increased access to technology
c) Increased income inequality
d) Increased economic growth
Answer: c) Increased income inequality

What is the role of foreign aid in economic development?
a) To promote trade liberalization
b) To provide financial assistance to developing countries
c) To encourage the growth of domestic industries
d) All of the above
Answer: b) To provide financial assistance to developing countries

What is the importance of infrastructure in economic development?
a) Infrastructure is essential for attracting foreign investment
b) Infrastructure is essential for promoting trade liberalization
c) Infrastructure is essential for increasing productivity and reducing transaction costs
d) Infrastructure is not an important factor in economic development
Answer: c) Infrastructure is essential for increasing productivity and reducing transaction costs

Which of the following is an example of a market failure in developing countries?
a) Insufficient access to education
b) High levels of corruption
c) Efficient allocation of resources
d) Adequate access to healthcare
Answer: a) Insufficient access to education

What is the role of education in economic development?
a) Education is important for reducing income inequality
b) Education is important for increasing productivity and innovation
c) Education is important for promoting trade liberalization
d) Education is not an important factor in economic development
Answer: b) Education is important for increasing productivity and innovation

Which of the following is an example of a non-economic factor that can influence economic development?
a) Access to technology
b) Cultural factors
c) Political stability
d) Export-led growth
Answer: b) Cultural factors

What is the significance of the informal sector in developing countries?
a) It is a major source of employment and income for the poor
b) It is a major source of foreign investment
c) It is a major source of government revenue
d) It has no significant role in economic development
Answer: a) It is a major source of employment and income for the poor

What is the relationship between poverty and economic development?
a) Poverty is a necessary step in the process of economic development
b) Poverty is a result of economic development
c) Poverty and economic development are unrelated
d) Poverty is a barrier to economic development
Answer: d) Poverty is a barrier to economic development

What is the concept of the “poverty trap” in development economics?
a) It is a situation in which a country’s economy is dependent on foreign aid
b) It is a situation in which a country’s economy is stagnant and unable to grow
c) It is a situation in which poverty perpetuates itself because the poor lack the resources to escape it
d) It is a situation in which economic growth leads to increased poverty and inequality
Answer: c) It is a situation in which poverty perpetuates itself because the poor lack the resources to escape it

What is the difference between absolute and relative poverty?
a) Absolute poverty refers to a lack of basic necessities, while relative poverty refers to a lack of resources compared to others in society
b) Absolute poverty refers to a lack of resources compared to others in society, while relative poverty refers to a lack of basic necessities
c) Absolute poverty and relative poverty are interchangeable terms
d) None of the above
Answer: a) Absolute poverty refers to a lack of basic necessities, while relative poverty refers to a lack of resources compared to others in society

What is the relationship between trade liberalization and economic development?
a) Trade liberalization can promote economic growth and development by increasing international trade and investment
b) Trade liberalization has no impact on economic development
c) Trade liberalization can lead to increased income inequality in developing countries
d) Trade liberalization can impede economic development by limiting domestic production and investment
Answer: a) Trade liberalization can promote economic growth and development by increasing international trade and investment

What is the role of microfinance in economic development?
a) To provide small loans and financial services to low-income individuals to start or expand businesses
b) To promote trade liberalization
c) To provide financial assistance to governments of developing countries
d) To encourage foreign investment in developing countries
Answer: a) To provide small loans and financial services to low-income individuals to start or expand businesses

What is the difference between the poverty line and the poverty threshold?
a) The poverty line is an international measure of poverty, while the poverty threshold is a national measure
b) The poverty line is a measure of relative poverty, while the poverty threshold is a measure of absolute poverty
c) The poverty line and the poverty threshold are interchangeable terms
d) None of the above
Answer: a) The poverty line is an international measure of poverty, while the poverty threshold is a national measure

What is the concept of “inclusive growth” in development economics?
a) It is a type of economic growth that benefits only a small segment of the population
b) It is a type of economic growth that benefits the entire population, including the poor and marginalized
c) It is a type of economic growth that prioritizes the interests of foreign investors over domestic producers
d) It is a type of economic growth that is focused on environmental sustainability rather than economic outcomes
Answer: b) It is a type of economic growth that benefits the entire population, including the poor and marginalized

What is the relationship between foreign debt and economic development?
a) Foreign debt can provide a source of financing for investment in developing countries, leading to economic growth and development
b) Foreign debt has no impact on economic development
c) Foreign debt can lead to increased poverty and economic instability in developing countries
d) Foreign debt can impede economic development by diverting resources away from domestic investment and production
Answer: c) Foreign debt can lead to increased poverty and economic instability in developing countries

What is the importance of good governance in economic development?
a) Good governance is essential for attracting foreign investment
b) Good governance is essential for promoting trade liberalization

What is the relationship between education and economic development?
a) Education has no impact on economic development
b) Education can promote economic development by improving human capital and productivity
c) Education can impede economic development by creating a brain drain of skilled workers to developed countries
d) None of the above
Answer: b) Education can promote economic development by improving human capital and productivity

What is the concept of “human development” in development economics?
a) It is a measure of economic growth that focuses on GDP per capita
b) It is a measure of economic growth that focuses on infrastructure development
c) It is a measure of development that focuses on improving the well-being of individuals, including health, education, and living standards
d) None of the above
Answer: c) It is a measure of development that focuses on improving the well-being of individuals, including health, education, and living standards

What is the difference between foreign aid and foreign direct investment (FDI)?
a) Foreign aid is a form of investment in which foreign governments provide financial assistance to developing countries, while FDI is a form of investment in which foreign firms invest directly in developing countries
b) Foreign aid and FDI are interchangeable terms
c) Foreign aid is a form of investment in which foreign firms invest directly in developing countries, while FDI is a form of investment in which foreign governments provide financial assistance to developing countries
d) None of the above
Answer: a) Foreign aid is a form of investment in which foreign governments provide financial assistance to developing countries, while FDI is a form of investment in which foreign firms invest directly in developing countries

What is the role of institutions in economic development?
a) Institutions have no impact on economic development
b) Institutions can promote economic development by creating a stable and predictable environment for investment and growth
c) Institutions can impede economic development by creating corruption and inefficiency
d) None of the above
Answer: b) Institutions can promote economic development by creating a stable and predictable environment for investment and growth

What is the concept of “brain drain” in development economics?
a) It is a situation in which a country’s economy is dependent on foreign aid
b) It is a situation in which a country’s economy is stagnant and unable to grow
c) It is a situation in which skilled workers emigrate from developing countries to developed countries, leading to a loss of human capital
d) It is a situation in which economic growth leads to increased poverty and inequality
Answer: c) It is a situation in which skilled workers emigrate from developing countries to developed countries, leading to a loss of human capital

What is the difference between import substitution and export-oriented industrialization (EOI)?
a) Import substitution and EOI are interchangeable terms
b) Import substitution is a development strategy in which a country produces goods domestically instead of importing them, while EOI is a strategy in which a country focuses on producing goods for export
c) Import substitution is a strategy in which a country focuses on producing goods for export, while EOI is a strategy in which a country produces goods domestically instead of importing them
d) None of the above
Answer: b) Import substitution is a development strategy in which a country produces goods domestically instead of importing them, while EOI is a strategy in which a country focuses on producing goods for export

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