MCQOPTIONS
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MCQOPTIONS
This section includes 16 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Which of the following statements regarding the loanable funds market is not true ? |
| A. | A decrease in a country’s net capital outflow shifts the demand for loanable funds to the left |
| B. | An increase in domestic investment shifts the demand for loanable funds to the right |
| C. | An increase in a country’s net capital outflow shifts the supply of loanable funds to the left |
| D. | An increase in a country’s net capital outflow raises its real interest rate |
| Answer» D. An increase in a country’s net capital outflow raises its real interest rate | |
| 2. |
Which of the following statements regarding the market for foreign currency exchange is true ? |
| A. | An increase in Pakistan’s net capital outflow increase the supply of rupees and the rupees depreciate |
| B. | An increase in Pakistan’s net capital outflow increase the demand of rupees and the rupees appreciate |
| C. | An increase in Pakistan’s net capital outflow increase the demand of rupees and the rupees depreciate |
| D. | An increase in Pakistan’s net capital outflow increase the supply of rupees and the rupees appreciate |
| Answer» B. An increase in Pakistan’s net capital outflow increase the demand of rupees and the rupees appreciate | |
| 3. |
Which of the following statements about trade policy is true ? |
| A. | A country’s trade policy has no impact on the size of its trade balance |
| B. | None of these answers |
| C. | A restrictive import quota decreases a country’s net exports |
| D. | A restrictive imports quota increases a country’s net exports |
| Answer» B. None of these answers | |
| 4. |
Which of the following statement regarding the loanable funds market is true ? |
| A. | A decrease in the government budget deficit increase the real interest rate |
| B. | An increase in the government budget deficit shifts the supply of loanable funds to the right |
| C. | An increase in private saving shifts the supply of loanable funds to the left |
| D. | An increase in the government budget deficit shifts the supply of loanable funds to the left |
| Answer» E. | |
| 5. |
Which of the following groups would not benefit from an EU imports quota on Japanese cars ? |
| A. | Eu consumers who buy electronics from Japan |
| B. | EU farmers who export grain |
| C. | employees of EU car manufacturers |
| D. | Shareholders of German carmaker BMW |
| Answer» C. employees of EU car manufacturers | |
| 6. |
Which of the following groups would be most harmed by a UK government budget deficit ? |
| A. | Foreigners who wish to buy assets in the UK |
| B. | BAe Systems wishing to sell aircraft to Saudi Arabia |
| C. | UK residents wishing to buy foreign Produced cars |
| D. | Lenders of loanable funds |
| Answer» C. UK residents wishing to buy foreign Produced cars | |
| 7. |
The Phrase “twin deficits” refers to ? |
| A. | A country’s trade deficit and its government budget deficit |
| B. | The fact that if a country has a trade deficit, its trading partners must also have trade deficits |
| C. | the equality of a country’s saving deficit and its investment deficit |
| D. | a country’s trade deficit and its net capital outflow deficit |
| Answer» B. The fact that if a country has a trade deficit, its trading partners must also have trade deficits | |
| 8. |
If the EU imposes a quota on the importing of clothing produced in China, so reducing UK imports of clothing, which of the following is true regarding UK net exports ? |
| A. | Net exports will rise |
| B. | None of these answers |
| C. | Net exports will fall |
| D. | Net exports will remain unchanged |
| Answer» E. | |
| 9. |
If the EU imposes a quota on the importing of clothing produced in China, so reducing UK imports of clothing Which of the following is true regarding the market for foreign currency exchange ? |
| A. | The demand for pounds decreases and the pound depreciates |
| B. | The Supply of pounds increases, and the pound depreciates |
| C. | The Supply of pounds decreases, and the pound appreciates |
| D. | The demand for Pounds increases and the pound appreciates |
| Answer» E. | |
| 10. |
Capital flight ? |
| A. | decreases a country’s net exports and increases its long-run growth path |
| B. | increases a country’s net exports and increases its long-run growth path |
| C. | increases a country’s net exports and decreases its long-run growth path |
| D. | decreases a country’s net exports and decreases its long-run growth path |
| Answer» D. decreases a country’s net exports and decreases its long-run growth path | |
| 11. |
An increasing in Europe’s taste for UK produced Hondas would cause the pound to ? |
| A. | depreciate and would increase UK net exports |
| B. | appreciate and would increase UK net exports |
| C. | depreciate and would decrease UK net exports |
| D. | appreciate, but the total value of UK net export stays the same |
| Answer» E. | |
| 12. |
An increase in the Pakistan’s government budget deficit ? |
| A. | Increase Pakistan’s net exports and decrease Pakistan’s net capital outflow |
| B. | decreases Pakistan’s net exports and Pakistan’s net Capital outflow the Pakistan’s same amount |
| C. | Increase Pakistan’s net exports and Pakistan’s net capital outflow the same amount |
| D. | decreases Pakistan’s net exports and increase Pakistan’s net capital outflow |
| Answer» C. Increase Pakistan’s net exports and Pakistan’s net capital outflow the same amount | |
| 13. |
An increase in the government budget deficit ? |
| A. | has no impact on the real interest rate and fails to crowed out investment |
| B. | decreases the real interest rate and crowds out investment |
| C. | None of these answers |
| D. | Increases the real interest rate and crowds out investment |
| Answer» E. | |
| 14. |
An increase in Pakistan’s private saving ? |
| A. | increase Pakistan’s net exports and Pakistan’s net capital outflow the same amount |
| B. | Increase Pakistan’s net exports and decrease Pakistan’s net capital outflow |
| C. | decreases Pakistan’s net exports and Pakistan’s net capital outflow the same amount |
| D. | decrease Pakistan’s net exports and increase Pakistan’s net capital outflow |
| Answer» B. Increase Pakistan’s net exports and decrease Pakistan’s net capital outflow | |
| 15. |
An export subsidy should have the opposite effect of ? |
| A. | A government budget deficit |
| B. | Capital flight |
| C. | An increase in Private saving |
| D. | A tariff |
| Answer» E. | |
| 16. |
An example of a trade policy is ? |
| A. | A tariff on sugar |
| B. | All are examples of trade policy |
| C. | capital flight because it increases a country’s net exports |
| D. | an increase in the government budget deficit because it reduces a country’s net exports |
| Answer» B. All are examples of trade policy | |