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 ?

Output rises; prices are unchanged from the initial value

Prices fall; output is unchanged from its initial value

Output falls; prices are unchanged from the initial value

Output and the price level are unchanged from their initial values

2 / 50

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

product

household

firm

market

3 / 50

How are presidential programs funded ?

By government investments

By withdrawals from the Treasury Department

By Congress

By foreign nations

4 / 50

For perfect competition to work there must be ?

free entry and exit

all of the above

a standard product

many buyers and sellers

5 / 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 ?

coal miners must be more attractive than other workers

coal miners must have greater human capital than others

we have evidence of discrimination against workers outside the coal mine

we have observed a compensating differential

6 / 50

The social sciences have no laws because ?

social science research techniques are flawed

social scientists are a lawless group

none of the above

the various disciplines squabble among themselves

7 / 50

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

the price of borrowing money

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

8 / 50

If the marginal revenue is Positive ?

Selling another unit will increase average revenue

Selling another unit will increase costs

Selling another unit will increase total revenue

Selling another unit will increase profits

9 / 50

Externalities are a problem only if ?

all firms are monopolistic

the externalities are negative

all firms are perfectly competitive

decision makers do not take them into account

10 / 50

The Bank of England and the Federal Reserve ?

are central banks

are branches of commercial banks

use fiscal policy to influence GDP

loan money to most of LDC commercial banks

11 / 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 ?

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

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 decrease

12 / 50

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

Canada

Mexico

Argentina

Venezuela

13 / 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 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

a situation in which workers are unable to find jobs.

14 / 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 ?

Exchange rate

Currency exchange

Currency value

15 / 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 ?

decrease the money supply

Increase government spending and decrease taxes

decrease government spending and increase taxes

decrease interest rates

16 / 50

Which of the following is an agricultural produce of Taiwan ?

Maize

Coffee

Rice

None of the above

17 / 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

18 / 50

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

It is only measured every five years:

It measures wealth not income

It measures Gross Domestic Product

It does not measure the quality of the items produced

19 / 50

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

35% or 7.93 mha

20% or 3.93 mha

10% or 1.93 mha

29% or 5.93 mha

20 / 50

History is often NOT considered a social science because_______________?

it does not study people

historians do not use computers

it is not based on evidence

its primary concern is to record events of the past

21 / 50

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

A + B + C + D

A + B + E

22 / 50

An increase in the price of beef providers information which ?

tells consumers to buy less pork

tells consumers to buy more beef.

tells producers to produce more beef.

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

23 / 50

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

vertical conflicts

layer-based conflicts

parallel conflicts

horizontal conflicts

24 / 50

A contraction in supply occurs when ?

The supply curve shifts outwards

The supply curve shifts inwards

The quantity supplied falls when the price falls

Demand shifts outwards

25 / 50

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

Cast Iron

Stainless Steel

Mild Steel

Wrought Iron

26 / 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 ?

bound by soft budget

achieved only through socialism

recurrent expenditures

target variables

27 / 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

28 / 50

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

amalgamation

segregation

accommodation

acculturation

29 / 50

The poorest region of the World is ?

the Middle East

Asia

Latin America

Sub Saharan Africa

30 / 50

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

A + B + E

A + B +C + D

31 / 50

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

is determined by the actions of other firms in the industry

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

becomes a decision variable for the firm

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

32 / 50

According to the differential association theory deviant acts are_________________?

learned through interaction with others

the result of social deprivation

caused by abnormal chromosomes

considered normal by some antisocial individuals

33 / 50

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

Productivity growth has been steady over the last 50 years

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

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

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

34 / 50

Economic profit is equal to total revenue minus ?

explicit costs

implicit costs

marginal costs

variable costs

35 / 50

Net taxes are ?

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

government expenditures minus government revenues

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

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

36 / 50

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

an isocost line

an isoquant.

an indifference curves.

a production functions

37 / 50

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

natural and supernatural

children of light and children of darkness

sacred and profane

good and evil

38 / 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 ?

monopolistically competitive firms produce beyond their efficient scale

monopolistically competitive firms earn economic profits in the long run

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

39 / 50

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

Pricing decisions

Target market decisions

Produced assortment and services decisions

Promotion decisions

40 / 50

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

airline tickets

bus tickets

taxi rides

transportation

41 / 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 + G + X ? Z

AD = C + I

AD = C + I + G

42 / 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 favorable balance of trade

a more open market

a belief system

an equality of trade position

43 / 50

One of the perceived advantages of suburban living is_______________________?

greater safety from crime

older more gracious housing

concentration of apartments

larger variety of cultural resources

44 / 50

The marginal rate of tax paid is ?

Change in the tax paid / change in income

Change in income / change in tax paid

The total tax paid / total income

Total income / total tax paid

45 / 50

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

Purchasing power parity

Inflator

Deflation

Deflector

46 / 50

A perfectly competitive market has ?

only one seller.

firms that set their own prices

many buyers and sellers.

at least a few sellers.

47 / 50

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

appreciate

depreciate

fluctuate more than it would do otherwise

not be affected

48 / 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 ?

intermediate technology

factor price distortions

maximum capital absorption

engineering mentality

49 / 50

Macroeconomics is the study of ?

individual building blocks in the economy

the relationship between different sectors on the economy

household purchase decisions

the economy as a whole

50 / 50

Menu costs in relation to inflation refers to ?

Costs of revaluing the currency

Costs of altering price lists

Costs of money increasing its value

Costs of finding better rates of return

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