Economics MCQs


Quiz # 3, MCQs

NOTE: Attempt all Questions to see the Result at the bottom of this page.

The Timer has started 10:00

  1. 1)

    The growth rate of any country’s real GDP can be:

    • A) Negative or positive.
    • B) Positive.
    • C) Negative.
    • D) Negative or positive or zero.

  2. 2)

    Endogenous growth theory is also known as:

    • A) Neo-classical growth theory.
    • B) New growth theory.
    • C) Classical growth model.
    • D) Keynesian growth model.

  3. 3)

    Which of the following is not the World Bank’s structural reform policy?

    • A) FDI liberalization.
    • B) Trade liberalization.
    • C) Financial liberalization.
    • D) Same monetary policy for all countries.

  4. 4)

    To calculate the price elasticity of demand, you need to know ____________________ point(s) on the ____________________ demand curve.

    • A) Two, same.
    • B) One, same.
    • C) One, opposite.
    • D) Two, opposite.

  5. 5)

    Governments protect domestic industries from foreign competition by _____________.

    • A) Encouraging agreements like NAFTA.
    • B) Using tariff and non tariff barriers.
    • C) Discouraging union membership.
    • D) Keeping the minimum wage low.

  6. 6)

    To make the equation of exchange in the quantity theory of money:

    • A) V and Q are assumed to be constant.
    • B) The money supply is assumed to be produced by the banking system and not exclusively in currency.
    • C) The quantity of money is assumed to determine the amount of Real GDP.
    • D) M and P are considered constant.

  7. 7)

    Disposable income is:

    • A) Total income plus transfer payments.
    • B) Total income minus saving.
    • C) Total income plus net taxes.
    • D) Total income minus net taxes.

  8. 8)

    Which of the following policy options would simultaneously increase interest rates and decrease output?

    • A) The central bank sells bonds through open market operations.
    • B) The federal government increases its defense purchases.
    • C) The central bank expands the money supply.
    • D) The federal government increases the tax rate.

  9. 9)

    The Phillips curve will shift to the right:

    • A) If there is a decrease in the expected inflation rate.
    • B) If there is an increase in the expected inflation rate.
    • C) If there is a decrease in the natural rate of unemployment.
    • D) If there is a favorable supply shock.

  10. 10)

    Suppose that your income increases from $100,000 to $150,000 and your consumption increases from $80,000 to $120,000. Your Marginal Propensity to Save (MPS) is:

    • A) 0.2.
    • B) 0.4.
    • C) 0.4.
    • D) 0.8.