Important Economics Subject Related MCQs for Exams

Important Economics Subject Related MCQs for Exams

(1) Budgetary Deficit refers to:
(a) Total Revenue Receipts minus Total Expenditures
(b) Fiscal Deficit minus Interest Payments
(c) Total Receipts (Revenue Account + Capital Account) Minus Total Expenditure (Revenue + Capital)
(d) None of the above

(2) Increase in the number of buyers in the market would lead to a shift of the demand curve to:
(a) The right
(b) The left
(c) Upwards along the curve
(d) None of the above

(3) Balance of Trade Deficit refers to:
(a) Excess of payments for import of goods and services over receipts from exports of goods and services.
(b) Excess of receipts from commodity exports minus payments of imports of goods
(c) Payments for commodity imports minus receipts from commodity exports
(d) None of the above

(4) A monopolist gains more if:
(a) Elasticity of demand for his product is low comparatively
(b) Elasticity of demand for his product is high comparatively
(c) Demand elasticity does not change
(d) None of the above

(5) Devaluation of Pak. Rupee in the 1990’s led to:
(a) Increase in exports
(b) Increase in imports
(c) Increase in both exports and imports
(d) None of the above

(6) Most sophisticated models of economics growth are based on:
(a) Realistic assumption
(b) Unrealistic assumptions
(c) On assumptions, at least some of which are extremely difficult to be proved as valid.
(d) None of the above

(7) Real GDP refers to:
(a) GDP, at constant prices
(b) GDP, at current prices over time
(c) GDP, at nominal prices over time
(d) None of the above

(8) Terms of trade refer to:
(a) Unit price of commodity import
(b) Value of exports vs. Value of imports.
(c) Exchange rate applicable to foreign trade of a country
(d) None of the above

(9) Cost-push inflation is the result of:
(a) Increase in the production cost
(b) Increase in the price of industrial production
(c) Escalation of international prices
(d) None of the above

(10) Competitive market comprises:
(a) Large number of buyers
(b) Large number of firms
(c) Large number of both buyers and producers
(d) None of the above

(11) A monopolist maximizes his profit at a point where:
(a) His average cost curve meets the marginal revenue curve.
(b) His marginal cost = marginal revenue
(c) His average cost = market price of market
(d) None of the above

(12) Under perfect competition, a firm would maximize profit at a point where:
(a) Average revenue = average cost
(b) Marginal cost = average revenue
(c) Marginal cost = marginal revenue
(d) None of the above

(13) Foreign trade differs from domestic trade:
(a) Because of terms of trade
(b) Due to differences in production costs
(c) Because of territorial differences
(d) None of the above

(14) World Trade Organization is:
(a) The same thing as UNCTAD
(b) The same as WHO
(c) A replacement of UNCTAD
(d) None of the above

(15) Major sources of revenue in Pakistan’s Budget:
(a) Have not changed in the 1990’s
(b) Have drastically changed in the nineties
(c) Have changed slightly in the nineties
(d) None of the above

(16) Main heads of expenditure in Pakistan’s Budget (in ascending order) are:
(a) Foreign debt, Development, Defence.
(b) Defence, foreign debt, development
(c) Development, defence and foreign debt
(d) None of the above

(17) Increase in foreign exchange reserves causes:
(a) Inflation
(b) Deflation
(c) No increase in price level
(d) None of the above

(18) Pakistan’s Budget deficit is financed by:
(a) Revenue Budget surplus
(b) Borrowing (both bank and non-bank)
(c) Foreign resource inflow
(d) None of the above

(19) Most important economic indicator of the health of an economy is:
(a) Income per capita
(b) National output
(c) Literacy rate
(d) None of the above

(20) Most important catalyst in economic growth is:
(a) Savings and investments
(b) Technology and skills
(c) Both at (a) and (b)
(d) None of the above

Economics Multiple Choice Questions MCQs Practice Test

Economics Multiple Choice Questions MCQs Practice Test

(1) A firm’s monopolistic position is strengthened by:

(a) Low elasticity of demand for its product.

(b) High elasticity of demand for its product.

(c) Constant elasticity of demand.

(d) None of the above.

(2) The overall Budget Deficit is financed from:

(a) External borrowing

(b) Non-Bank borrowing domestically

(c) Bank borrowing plus the above two at (a) and (b)

(d) None of the above.

(3) Devaluation leads to:

(a) Increase in imports (b) ‘ Increase in exports
(c) Decline in imports (d) Nona of the above.

(4) guild-up ‘of Foreign exchange reserves leads to:

(a) Decrease in money supply

(b) Increase in money supply

(c) Contraction in money supply

(d) None of the above.

(5) . monopolist would maximize profit at that level’ of production where:

(a) His/her average cost of production equals his/her marginal revenue

(b) marginal cost of production equal marginal ‘revenue

(c) Average cost equal average revenue

(d) None of the above.

(6) Cost push inflation results from: –

(a) Enhancement in wage bill

(b) Increase in the cost of inputs going into product ion

(c) Increase in the international prices of imports

(d) None of the above.

(7) Balance of trade deficit refers to:

(a) Difference between receipts from exports of goods and services and the, payments for imports of goods and services.

(b) Difference between commodity export earnings versus payment for commodity imports.

(8) Health of a country’s economy is indicated by:

(a) Number of doctors per 1.000 population

(b) Per capita income

(c) Literacy rate (d) None of the above.

(9) According to classical theory of employment Laissez Faire System of enterprise:

(a) Ensures continuous Full – Employment

(b) Leads to general over production

(c) Leads to investment higher than savings,

(d) None of the above.

(10) Saving means:

(a) Part of income for investment

(b) Income for boarding

(c) Non-consumption of income in the current period

(d) None of the above.

(11) Thee eziee of GDP in nominal terms refer to:

(a) Natioal, output iz~ ~a]. te~m~

(b) National output in prices prevaiLing in market

(c) Output at constant prices

(d) None of the above.

(12) Rs. 100 note has value because:

(a) It has intrinsic value

(b) State Bank guarantees it

(c) Its holder can exchange it for goods and services

(d) None of the above.

(13) In 25 years (1960-85) Pakistan’s Per Capita income:

(a) More than doubled (b) Less than doubled

(c) Did not show more than 70% increase (d) None of the above.

(14) All economic models’are based on:

(a) Realistic assumptions

(b) Assumptions which can never be perfectly realistic

(c) Unrealistic assumptions

(d) None of the above.

(15) Terms of Trade improvment if:

(a) Unit value of i#t~Orts goes d6wn

(b) Unit value of 6*~rts go up

(c) Relative value b~ exports ~O higher thäi’~ that of imports

(d) None of the abO~V6.

(16) An important policy instrument tO influence commercial banks is:

(a) Open market operations

(b) Changing reserve ratios of co~tnercial ba~riks

(c) Moral persuasion

(d) None of the above.

(17) Expansion in money supply stems f torn:

(a) Increasing the cost of bank credit

(b) Reducing availability of bank credit

(c) Reducing the financial cost of bank credit

(d) None of the above.

(18) During the 1980’s empirical evidence indicates that:

(a) Poverty re-emerged in Pakistan

(b) Good growth brought down poverty in Pakistan

(c) Poverty situation showed no change

(d) None of the above.

(19) Expansion in international trade is preferable over;

(a) Foreign aid (b) Project assistance

(c) Commodity assistance by foreign donors (d) None of the above.

(20) Supply factors in economic growth, are:

(a) Manpower (b) Stock of capital
(c) Technology and skills (d) None of the above