MCQOPTIONS
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MCQOPTIONS
This section includes 29 Mcqs, each offering curated multiple-choice questions to sharpen your Economics knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
The theory that explains business cycles by the dynamic interaction of consumption and investment demand is the ? |
| A. | sun spot theory |
| B. | multiplier accelerator model |
| C. | Solow theory |
| D. | New classical theory |
| Answer» C. Solow theory | |
| 2. |
The percentage of the working age population that is part of the workforce is known as the ? |
| A. | workers |
| B. | non-slackers |
| C. | diligent rate |
| D. | participation rate |
| Answer» E. | |
| 3. |
The neoclassical theory of growth identifier the steady state rate of growth as the ____ just sufficient to keep _____ constant while labor grows? |
| A. | saving, investment |
| B. | capital per person, productivity |
| C. | labor growth, output |
| D. | investment capital per person |
| Answer» E. | |
| 4. |
The multiplier accelerator model assumes ____ depends on ______? |
| A. | consumption expected future profits |
| B. | investment, interest rates |
| C. | investment expected future profits |
| D. | stock building interest rates |
| Answer» D. stock building interest rates | |
| 5. |
The long run equilibrium level of national income is the level at which ? |
| A. | economic growth is Zero |
| B. | All investment is used in the manufacturing sector |
| C. | Economic growth is growing |
| D. | All investment is used to maintain the existing capital stock at its current level |
| Answer» E. | |
| 6. |
The impossibility of negative gross investment provides a ______ to fluctuation in ______? |
| A. | ceiling, stock building |
| B. | ceiling, capital prices |
| C. | floor, output |
| D. | floor, the capital-output ratio |
| Answer» D. floor, the capital-output ratio | |
| 7. |
The idea of convergence of GDP in Europe suggests that ? |
| A. | All countries will eventually join the EEC |
| B. | Poorer countries have higher capital/labour ratios than richer countries. |
| C. | The gap between countries GDP per head will widen |
| D. | Poorer less developed countries will catch up with richer ones. |
| Answer» E. | |
| 8. |
The growth rates of economies tend to converge because ________ is easier when capital per worker is low and because of? |
| A. | capital-widening technical innovation |
| B. | capital-widening Catch-up in technology |
| C. | capital-deepening technical innovation |
| D. | capital-deepening, catch-up in technology |
| Answer» E. | |
| 9. |
The growth path resulting from technological progress for a given saving rate is known as the ? |
| A. | Steady state growth path |
| B. | Steady state invention rate |
| C. | Steady state level of output |
| D. | Unsteady state growth path |
| Answer» B. Steady state invention rate | |
| 10. |
The golden-rule saving rate is the rate of saving that ? |
| A. | gets the highest rate of interest |
| B. | maximizes the level of long-run investment |
| C. | maximizes the level of long-run consumption |
| D. | maximizes human capital |
| Answer» D. maximizes human capital | |
| 11. |
The business cycle is not transmitted from one country to another through ? |
| A. | private sector imports and exports |
| B. | economic policy |
| C. | the duration of compulsory education |
| D. | labor supply changes |
| Answer» D. labor supply changes | |
| 12. |
The business cycle describes fluctuations in output around the? |
| A. | trend path of output |
| B. | boom |
| C. | recession |
| D. | short-run fluctuations in output |
| Answer» B. boom | |
| 13. |
The best way to achieve economic growth is to ? |
| A. | increase government spending |
| B. | reduce taxation |
| C. | save more |
| D. | increase personal consumption |
| Answer» D. increase personal consumption | |
| 14. |
The belief that the rate of growth depends upon technological progress facilitated by institutions incentives and government is known as ________ growth theory? |
| A. | endogenous |
| B. | exogenous |
| C. | beta |
| D. | convergence |
| Answer» B. exogenous | |
| 15. |
Real business cycle theory suggests that ____ not important in explaining short-term fluctuations around actual output ? |
| A. | aggregate supply is |
| B. | aggregate demand is |
| C. | potential output is |
| D. | real variables are |
| Answer» C. potential output is | |
| 16. |
Real business cycles are cycles in ? |
| A. | potential output |
| B. | actual output |
| C. | real output |
| D. | international trade |
| Answer» B. actual output | |
| 17. |
Real business cycle theorists argue that _________ can explain short- and long-term fluctuation in output? |
| A. | imperfect labor markets |
| B. | rational expectations |
| C. | intertertemporal decisions of households, firms and government |
| D. | sun spot cycles |
| Answer» D. sun spot cycles | |
| 18. |
Real business cycle theories suggest that _____ to correct departures from the desired growth path? |
| A. | There is a role for fiscal policy |
| B. | There is a role for monetary policy |
| C. | There is a role for supply-side policy |
| D. | There is a role for stabilizing output ever the business cycle |
| Answer» E. | |
| 19. |
Potential output can be increased by ____ or by ______? |
| A. | increasing the use of labor increasing the use of land |
| B. | increasing the use of capital increasing the use of labour |
| C. | increasing the use of land increasing the use of capital |
| D. | increasing the use of all inputs, technical advances |
| Answer» E. | |
| 20. |
Policies to encourage productivity do not include ? |
| A. | building more retail outlets |
| B. | encouraging risk-taking |
| C. | encouraging innovation |
| D. | encouraging R & D |
| Answer» B. encouraging risk-taking | |
| 21. |
In the neoclassical theory of growth a higher saving rate leads to ? |
| A. | a higher growth rates |
| B. | a fluctuating growth rate |
| C. | a fluctuating growth rates |
| D. | no change in the growth rate |
| Answer» E. | |
| 22. |
Identify below what is NOT considered to be a cause of economic growth ? |
| A. | An increase in the quantity of labor and capital |
| B. | An increase in labor productivity |
| C. | An increase in the money supply |
| D. | An increase in technology |
| Answer» D. An increase in technology | |
| 23. |
Identify below what does NOT affect productivity ? |
| A. | Public investment in education |
| B. | Innovation and the application of new technology |
| C. | The phase of the lunar cycle |
| D. | Private investment in new physical caital |
| Answer» D. Private investment in new physical caital | |
| 24. |
Governments can stimulate productivity by ? |
| A. | Imposing higher taxes on capital |
| B. | encouraging more labour intensive work to reduce unemployment |
| C. | reducing spending in education |
| D. | encouraging private investment |
| Answer» E. | |
| 25. |
GDP per head may be an imperfect measure of economic welfare because it excludes ? |
| A. | the value of leisure |
| B. | Externalities |
| C. | Untraded goods |
| D. | Change in the distribution of income |
| E. | All of the above |
| Answer» F. | |
| 26. |
Economic growth may depend upon _____ and _____? |
| A. | Population size, x-efficiency |
| B. | Population age distribution, education |
| C. | Population growth technical progress |
| D. | Population growth education |
| Answer» D. Population growth education | |
| 27. |
Economic growth is important because ? |
| A. | People want less crime |
| B. | People want to be happier |
| C. | People want a better environment |
| D. | People want higher incomes and more consumer goods. |
| Answer» E. | |
| 28. |
All of the following are parts of the business cycle except ? |
| A. | boom |
| B. | slump |
| C. | recovery |
| D. | acceleration |
| Answer» E. | |
| 29. |
A combined measure of productivity that takes account of both labor and capital productivity is known as ? |
| A. | total exploitation |
| B. | labour/capital productivity |
| C. | total factor productivity |
| D. | total productivity |
| Answer» D. total productivity | |