MCQOPTIONS
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MCQOPTIONS
This section includes 1337 Mcqs, each offering curated multiple-choice questions to sharpen your Economics Mcqs knowledge and support exam preparation. Choose a topic below to get started.
| 1001. |
The speculative demand for money occurs when ? |
| A. | Individuals hold money just in case an emergency happens |
| B. | Individuals hold money to buy things |
| C. | Individuals hold money rather than other assets because they are worried about the price of the other assets falling |
| D. | Individuals hold money to shop |
| Answer» C. Individuals hold money rather than other assets because they are worried about the price of the other assets falling | |
| 1002. |
An economy may operate outside the production possibility Frontier if ? |
| A. | It is not utilizing its resources fully |
| B. | It is being productively efficient |
| C. | It is a mixed economy |
| D. | It is trading other economies |
| Answer» E. | |
| 1003. |
In a free market the combination of products produced will be determined by ? |
| A. | Market forces of supply and demand |
| B. | The government |
| C. | The law |
| D. | The public Sector |
| Answer» B. The government | |
| 1004. |
The total costs are Rs2000 and 10 units are produced. The marginal cost of an 11th unit is Rs1300 Which of the following is true ? |
| A. | The average cost increase from Rs20 to Rs30 |
| B. | The total costs for 11 units are Rs700 |
| C. | The average cost for 10 units is Rs1300 |
| D. | The average cost for 11 units is Rs1300 |
| Answer» D. The average cost for 11 units is Rs1300 | |
| 1005. |
A profit maximising firm will invest up to the level of investment where ? |
| A. | The cost of borrowing equals the marginal efficiency of capital |
| B. | The cost of borrowing is greater than the marginal efficiency of capital |
| C. | The cost of borrowing is less then the marginal efficiency of capital |
| D. | The cost of borrowing equals the marginal propensity to consume |
| Answer» D. The cost of borrowing equals the marginal propensity to consume | |
| 1006. |
If an economy is productively efficient ? |
| A. | Everyone is wealthy |
| B. | Resources are unemployed |
| C. | More of one product can only be produced if less of another product is produced |
| D. | The distribution of income is eqal |
| Answer» D. The distribution of income is eqal | |
| 1007. |
In the short term a firm will produce provided the revenue ? |
| A. | covers fixed costs |
| B. | covers variable costs |
| C. | covers total costs |
| D. | covers revenue |
| Answer» C. covers total costs | |
| 1008. |
Total increase from Rs500 to Rs600 When output increases from 20 to 30 units Fixed costs are Rs200 Which of the following is true ? |
| A. | Marginal cost is Rs20 |
| B. | Average cost rises |
| C. | Variable cost rises by Rs200 |
| D. | Average fixed cost was Rs10originally |
| Answer» C. Variable cost rises by Rs200 | |
| 1009. |
If the marginal revenue is less than the marginal cost then to profit maximise a firm should ? |
| A. | Reduce output |
| B. | Increase output |
| C. | Leave output where it is: |
| D. | Increase costs |
| Answer» B. Increase output | |
| 1010. |
History is often NOT considered a social science because_______________? |
| A. | its primary concern is to record events of the past |
| B. | historians do not use computers |
| C. | it does not study people |
| D. | it is not based on evidence |
| Answer» B. historians do not use computers | |
| 1011. |
The proportion of an increase in national income paid in tax is ? |
| A. | the fiscal stance |
| B. | the tax multiplier |
| C. | the marginal tax propensity |
| D. | the average tax propensity |
| Answer» D. the average tax propensity | |
| 1012. |
If marginal cost is positive and falling ? |
| A. | Total cost is falling |
| B. | Total cost is increasing at a falling rate |
| C. | Total cost is falling at a falling rate |
| D. | Total cost is increasing at an increasing rate |
| Answer» C. Total cost is falling at a falling rate | |
| 1013. |
Normal profit occurs when ? |
| A. | Average revenue equals average variable cost |
| B. | Marginal revenue equals marginal cost |
| C. | Average revenue equals marginal cost |
| D. | Average revenue equals average cost |
| Answer» B. Marginal revenue equals marginal cost | |
| 1014. |
The first level of output at which the long run average cost are minimized is called ? |
| A. | The Minimum Efficient Scale |
| B. | The Minimum External Scale |
| C. | The Maximum External Scale |
| D. | The Maximum Effective Scale |
| Answer» B. The Minimum External Scale | |
| 1015. |
The law of diminishing returns assumes ? |
| A. | There are no fixed factors of production |
| B. | There are no variable factors of production |
| C. | Utility is maximised when marginal product falls |
| D. | Some factors of production are fixed |
| Answer» D. Some factors of production are fixed | |
| 1016. |
An outward shift of the production possibility frontier may be caused by ? |
| A. | An increase in demand |
| B. | More government spending |
| C. | Better training of employees |
| D. | Productive inefficiency |
| Answer» D. Productive inefficiency | |
| 1017. |
The resources in an economy are ? |
| A. | Constantly increasing |
| B. | Fixed at any moment |
| C. | Constantly decreasing |
| D. | Able to be transferred easily between industries |
| Answer» C. Constantly decreasing | |
| 1018. |
For equilibrium in an open four sector economy ? |
| A. | Actual injections = actual withdrawals |
| B. | Planned injections = planned withdrawals |
| C. | Savings = investment |
| D. | Government spending = tax revenue |
| Answer» B. Planned injections = planned withdrawals | |
| 1019. |
The accelerator assumes ? |
| A. | The marginal propensity to consume is constant |
| B. | The economy is at full employment |
| C. | There is a constant relationship between net investment and the rate of change of output |
| D. | The multiplier is constant |
| Answer» D. The multiplier is constant | |
| 1020. |
Economic growth can be seen by an outward shift of ? |
| A. | The Production Possibility Frontier |
| B. | The Gross Domestic Barrier |
| C. | The Marginal Consumption Frontier |
| D. | The Minimum Efficient Scale |
| Answer» E. | |
| 1021. |
An outward shift in the Marginal Efficiency of Capital should ? |
| A. | Decrease consumption |
| B. | Increase aggregate demand |
| C. | Reduce aggregate supply |
| D. | Slow economic growth |
| Answer» D. Slow economic growth | |
| 1022. |
In a recession, GDP ? |
| A. | Grows negatively |
| B. | Grows slowly |
| C. | Grows by 0% |
| D. | Grows rapidly |
| Answer» D. Grows rapidly | |
| 1023. |
Labour Productivity measures ? |
| A. | The output per worker |
| B. | The output per machine |
| C. | Total output |
| D. | Marginal output |
| Answer» E. | |
| 1024. |
Social control through the enforcement of norms works because ? |
| A. | everyone fears pain and embarrassment |
| B. | individuals are anxious to be accepted |
| C. | people need to be manipulated |
| D. | independent though and action are too hard |
| Answer» C. people need to be manipulated | |
| 1025. |
Privatisation is the transfer out ? |
| A. | Publicly held stock to private individuals |
| B. | corporately owned businesses to individuals |
| C. | government businesses to the private sector |
| D. | Privately owned business to the government sector |
| Answer» D. Privately owned business to the government sector | |
| 1026. |
A reflationary policy ? |
| A. | increase injections |
| B. | Reducing taxation rates |
| C. | Reducing interest rates |
| D. | Reducing government spending |
| Answer» D. Reducing government spending | |
| 1027. |
The marginal propensity to save (MPS) is ? |
| A. | the average amount of income that is saved |
| B. | the fraction of a change in income that is saved |
| C. | the ratio of saving to income |
| D. | the ratio of income to saving |
| Answer» C. the ratio of saving to income | |
| 1028. |
The PFI aims to deliver public projects and services using ? |
| A. | Public borrowing |
| B. | The private sector |
| C. | time and motion studies |
| D. | foreign labour |
| Answer» C. time and motion studies | |
| 1029. |
A case study is most useful when ____________? |
| A. | limited research funds are available |
| B. | no hypothesis can be formulated |
| C. | events under consideration are rare |
| D. | facts must be established |
| Answer» E. | |
| 1030. |
Lower interest rates are likely to ? |
| A. | Decrease consumption |
| B. | increase cost of borrowing |
| C. | Encourage saving |
| D. | Increase spending |
| Answer» C. Encourage saving | |
| 1031. |
Investment is a unstable element of aggregate demand because it depends heavily on ? |
| A. | Government policy |
| B. | Expectations |
| C. | National income |
| D. | Historic trends |
| Answer» B. Expectations | |
| 1032. |
As income increase ? |
| A. | The average propensity to consume gets nearer in value of the marginal propensity to consume |
| B. | The average propensity to consume diverges in value from the marginal propensity to consume |
| C. | The average propensity to consume falls |
| D. | The average propensity to consume always approaches 0 |
| Answer» D. The average propensity to consume always approaches 0 | |
| 1033. |
New classical economists advocate reducing welfare payments to people who are unemployed or single parents. The economic reasoning uses was that this would ? |
| A. | reduce poverty |
| B. | reduce unemployment |
| C. | weaken the power of trade unions |
| D. | help small businesses |
| Answer» C. weaken the power of trade unions | |
| 1034. |
According to the Laffer curve as tax rates increase tax revenue ? |
| A. | initially increase and then decrease |
| B. | decrease continuously |
| C. | rise continuously |
| D. | initially decrease and then increase |
| Answer» B. decrease continuously | |
| 1035. |
Objectivity means ? |
| A. | precision |
| B. | taking nothing for granted |
| C. | eliminating bias |
| D. | repeating observations |
| Answer» D. repeating observations | |
| 1036. |
The accelerator theory of investment says that induced investment is determined by ? |
| A. | the level of national income |
| B. | the level of aggregate demand |
| C. | the rate of change of national income |
| D. | expectations |
| Answer» D. expectations | |
| 1037. |
A group of economists argue that the real problem with the economy is high rates of taxation and heavy regulation that reduce the incentives to work save and invest these economists are ? |
| A. | supply side economists |
| B. | neo-Keynesian economists |
| C. | rational -expectations economists |
| D. | New classical economists |
| Answer» B. neo-Keynesian economists | |
| 1038. |
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 ? |
| A. | aggregate supply will increase , aggregate demand will decrease |
| B. | aggregate supply will increase, aggregate output will increase and the price level will decrease |
| C. | aggregate supply will increase aggregate output will increase and the price level will increase |
| D. | both aggregate supply and demand will increase and the price level will increase |
| Answer» B. aggregate supply will increase, aggregate output will increase and the price level will decrease | |
| 1039. |
Culture is the basis of______________? |
| A. | human social life |
| B. | not only human but also ant society |
| C. | all animal groups |
| D. | none of the above |
| Answer» B. not only human but also ant society | |
| 1040. |
Assuming there is no government or foreign sector the formula for the multiplier is ? |
| A. | 1/MPS |
| B. | 1/(1+ MPC) |
| C. | 1 – MPC |
| D. | 1/MPC |
| Answer» B. 1/(1+ MPC) | |
| 1041. |
The current trend in the social sciences is toward ? |
| A. | statistical and quantitative ways of investigating human behavior |
| B. | a totally value free approach |
| C. | using the findings of the social sciences to reform society |
| D. | using whatever technique seems best to fit |
| Answer» E. | |
| 1042. |
According to the paradox of thrift increased efforts to save will cause ? |
| A. | an increase in income and an increase in overall saving |
| B. | a decrease in income and an overall decrease in saving |
| C. | a decrease in income but an increase in saving |
| D. | an increase in income but no overall change in saving |
| Answer» C. a decrease in income but an increase in saving | |
| 1043. |
For the better part of recorded history knowledge about social relationships was principally based on ? |
| A. | scientific investigation |
| B. | speculation |
| C. | inspiration |
| D. | measurement |
| Answer» C. inspiration | |
| 1044. |
Cultural relativity ideally implies ? |
| A. | that moral values different from one, s own are all wrong |
| B. | everyone’s crazy except you and me (and I’m not sure about you) |
| C. | mindless acceptance of all cultural values of others |
| D. | tolerance and respect for the cultural values of others |
| Answer» E. | |
| 1045. |
Psychology deals with_________________? |
| A. | only violent behavior |
| B. | only normal behavior |
| C. | mental states of individual humans |
| D. | groups of people in interaction |
| E. | None of these |
| Answer» D. groups of people in interaction | |
| 1046. |
It is true of science that_______________? |
| A. | it is body of knowledge organized in a logical manner |
| B. | it is not concerned with the method of acquiring knowledge |
| C. | id does not include the method of investigation |
| D. | its content is more important than its method |
| Answer» B. it is not concerned with the method of acquiring knowledge | |
| 1047. |
Which of the following is FALSE? Scientific observation ? |
| A. | must proceed systematically |
| B. | must occur under controlled conditions |
| C. | yields valid date with classification organization or recording |
| D. | is open to anyone who wants to pursue it |
| Answer» E. | |
| 1048. |
Once a social scientist has formulated the hypothesis what is the next step of the scientific method ? |
| A. | Generalization |
| B. | Developing a research design |
| C. | Data analysis |
| D. | Replication |
| Answer» C. Data analysis | |
| 1049. |
Every hypothesis must ? |
| A. | predict a relationship between two factors |
| B. | be general |
| C. | be based on scientific theory |
| D. | predict a causal relationship |
| Answer» B. be general | |
| 1050. |
Language____________? |
| A. | helps humans to cooperate |
| B. | passes on knowledge from generation to generation |
| C. | reflects changes in society |
| D. | all of the above |
| Answer» E. | |