Economics Quiz 27

1 / 50

Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to aggregate demand and aggregate supply what happens to prices and output in the long run ?

Prices fall; output is unchanged from its initial value

Output and the price level are unchanged from their initial values

Output falls; prices are unchanged from the initial value

Output rises; prices are unchanged from the initial value

2 / 50

According to Supply-side economists. if taxes are cut so that people have an increased incentive to work and businesses have an increased incentive to invest ?

both aggregate supply and demand will increase will increase and the price level will increase

aggregate supply will increase will increase aggregate demand will decrease and the price level will decrease

aggregate supply will increase will increase aggregate output will increase and the price level will increase

aggregate supply will increase will increase aggregate output will increase and the price level will decrease

3 / 50

Which of the following country did not experience large capital flights from 1976 to 1984 ?

Mexico

Canada

Venezuela

Argentina

4 / 50

One of the perceived advantages of suburban living is_______________________?

concentration of apartments

older more gracious housing

larger variety of cultural resources

greater safety from crime

5 / 50

A contraction in supply occurs when ?

The quantity supplied falls when the price falls

Demand shifts outwards

The supply curve shifts outwards

The supply curve shifts inwards

6 / 50

The demand for which of the following is likely to be the most price inelastic ?

transportation

taxi rides

airline tickets

bus tickets

7 / 50

According to the differential association theory deviant acts are_________________?

learned through interaction with others

caused by abnormal chromosomes

considered normal by some antisocial individuals

the result of social deprivation

8 / 50

Economic profit is equal to total revenue minus ?

variable costs

explicit costs

marginal costs

implicit costs

9 / 50

How are presidential programs funded ?

By Congress

By foreign nations

By withdrawals from the Treasury Department

By government investments

10 / 50

The economic participant who decides how to use the factors of production and for what purpose in called a________________?

household

firm

market

product

11 / 50

Conflicts between different levels of the same channel of distribution are referred to as ?

vertical conflicts

horizontal conflicts

layer-based conflicts

parallel conflicts

12 / 50

Durkheim,s approach to religion involved the opposed concepts of_________________?

good and evil

sacred and profane

natural and supernatural

children of light and children of darkness

13 / 50

A perfectly competitive market has ?

at least a few sellers.

many buyers and sellers.

only one seller.

firms that set their own prices

14 / 50

A graph showing all the combinations of capital and labor that can used to produce a given amount of output is ?

an isoquant.

an indifference curves.

an isocost line

a production functions

15 / 50

History is often NOT considered a social science because_______________?

historians do not use computers

its primary concern is to record events of the past

it is not based on evidence

it does not study people

16 / 50

There is method by which one currency is bought, sold or valued in terms of other currencies, gold or accounting units such as the Special Drawing Right of IMF. What is it called ?

Currency value

Currency exchange

Exchange rate

Currency value

17 / 50

Externalities are a problem only if ?

the externalities are negative

decision makers do not take them into account

all firms are monopolistic

all firms are perfectly competitive

18 / 50

Which of the following is an agricultural produce of Taiwan ?

Rice

Coffee

None of the above

Maize

19 / 50

Which statistical factor is used to convert current currency purchasing power into inflation adjusted purchasing power ?

Deflation

Deflector

Inflator

Purchasing power parity

20 / 50

James Pickett J.Forsyth, and N. S McBain on the basis of field research in Africa, concluded that business people often want to use the most advanced design without knowing that it may not be the most profitable. They attribute this attitude to ?

maximum capital absorption

factor price distortions

engineering mentality

intermediate technology

21 / 50

Refer to Exhibit 4. If a tax is placed on the product in this market, producer surplus is the area?

A + B + E

A + B + C + D

22 / 50

If the marginal revenue is Positive ?

Selling another unit will increase costs

Selling another unit will increase total revenue

Selling another unit will increase profits

Selling another unit will increase average revenue

23 / 50

If a firm has some degree of market power, then output price ?

is determined by the actions of other firms in the industry

becomes a decision variable for the firm

no longer influences the amount demand of the firm?s product

is guaranteed to be above a firm?s average cost.

24 / 50

The poorest region of the World is ?

the Middle East

Latin America

Sub Saharan Africa

Asia

25 / 50

Total land area of Khyber Pakhtunkhwa comprises of 10.2 mha (25.20 million acres), out of which nearly ________ are cultivated?

29% or 5.93 mha

20% or 3.93 mha

35% or 7.93 mha

10% or 1.93 mha

26 / 50

A higher GDP per capita may not means that the quality of life has really improved because ?

It measures wealth not income

It does not measure the quality of the items produced

It is only measured every five years:

It measures Gross Domestic Product

27 / 50

If a person who works in coal mine gets paid more than a person with a similar background and skills who works in a safer job, then ?

we have observed a compensating differential

coal miners must have greater human capital than others

we have evidence of discrimination against workers outside the coal mine

coal miners must be more attractive than other workers

28 / 50

The social sciences have no laws because ?

social scientists are a lawless group

none of the above

social science research techniques are flawed

the various disciplines squabble among themselves

29 / 50

Aggregate demand in an economy trading internationally with a government sector can be written as ?

AD = C + I + G + X + Z

AD = C + I

AD = C + I + G

AD = C + I + G + X ? Z

30 / 50

The Bank of England and the Federal Reserve ?

use fiscal policy to influence GDP

are central banks

are branches of commercial banks

loan money to most of LDC commercial banks

31 / 50

The marginal rate of tax paid is ?

Change in the tax paid / change in income

The total tax paid / total income

Total income / total tax paid

Change in income / change in tax paid

32 / 50

The merging of majority and minority groups as happened in Brazil is called_______________?

accommodation

amalgamation

segregation

acculturation

33 / 50

Net taxes are ?

Taxes paid firms and households to the government minus the transfer payments made to firms and household

government expenditures minus government revenues

Taxes paid by firms and households to the government plus transfer payments made to firm and households

taxes paid by firms and households to the government minus the cost of collecting the taxes

34 / 50

Macroeconomics is the study of ?

the economy as a whole

individual building blocks in the economy

household purchase decisions

the relationship between different sectors on the economy

35 / 50

Annual GNP growth of 6% poverty reduced by 1% point of the population Balance of payments deficit not in excess of $200 million For a planner, the above are ?

achieved only through socialism

recurrent expenditures

bound by soft budget

target variables

36 / 50

Which of the following best describes the rate of growth in productivity in the United states over the last fifty years ?

Productivity grew slowly from the 1950s through the 1970s and then began to accelerate probably due to advances in computer technology

Productivity growth has been steady over the last 50 years

Productivity grew quickly in the 1950s and 1960s more slowly from the early 1970s through 1995 and then quickly again

Productivity has been growing more slowly every decade since world War II

37 / 50

In terms of the demand for money the interest rate represents ?

the return on money that is saved for the future

The opportunity cost of holding money

the rate at which current consumption can be exchanged for future consumption

the price of borrowing money

38 / 50

If the Keynesian consumption function is C = 10 + 0.8 Td when disposable income is Rs1000 the marginal propensity to consume is what ?

800

810

0.81

0.8

39 / 50

An increase in investment is most likely to be caused by ?

An increase in withdrawals

Lower national income

A decrease in the marginal propensity to consume

Lower interest rates

40 / 50

An increase in the price of beef providers information which ?

provides no information because prices in a market system are managed by planning boards.

tells producers to produce more beef.

tells consumers to buy more beef.

tells consumers to buy less pork

41 / 50

Menu costs in relation to inflation refers to ?

Costs of money increasing its value

Costs of finding better rates of return

Costs of revaluing the currency

Costs of altering price lists

42 / 50

One source of inefficiency in monopolistic competition is that since price is above marginal cost, some units are not produced that buyers value in ?

excess of the cost of production and this causes a deadweight loss.

Since price is above marginal cost surplus is redistributed from buyers to sellers

monopolistically competitive firms earn economic profits in the long run

monopolistically competitive firms produce beyond their efficient scale

43 / 50

Which of the following iron has got the highest carbon content ?

Stainless Steel

Mild Steel

Wrought Iron

Cast Iron

44 / 50

If Pakistan?s incomes rise faster than those in most other countries the the exchange value will tend to ?

appreciate

not be affected

fluctuate more than it would do otherwise

depreciate

45 / 50

Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending If the US federal Reserve (Which has a broader remit than the Bank of England Which is charged only with controlling inflation) chooses to engage in activist stabilization policy it should ?

Increase government spending and decrease taxes

decrease the money supply

decrease government spending and increase taxes

decrease interest rates

46 / 50

The Choice between high markups and high volume is part of which of the following retailer marketing decisions ?

Target market decisions

Pricing decisions

Produced assortment and services decisions

Promotion decisions

47 / 50

Refer to Exhibit 4. If a tax is placed on the product in this market consumer surplus is the area ?

A + B +C + D

A + B + E

48 / 50

For perfect competition to work there must be ?

all of the above

free entry and exit

many buyers and sellers

a standard product

49 / 50

The poverty trap refers to ?

a situation in which those receiving state benefits may be almost no better off if they choose to work more to earn more because doing so will reduce the amount of benefit income to which they are entitled and increase the amount to tax

a situation in which workers are unable to find jobs.

a situation in which those receiving state benefits are discriminated against by employers and so find it more difficult to find jobs.

a situation in which those receiving state benefits may be almost no better off if they choose to work more to earn more income for themselves and their families because doing so will mean they have to pay back the benefits they have previously received

50 / 50

To maintain its economic position, Japan has often limited the number of cars or the quantity of farm products that the United States can sell in Japan Japan has imposed these limits to develop ?

a more open market

a belief system

a favorable balance of trade

an equality of trade position

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