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Economics MCQs

Economics

Quiz # 3, MCQs

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

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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.
Right Answer is the option "D"

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.
Right Answer is the option "B"

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.
Right Answer is the option "D"

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.
Right Answer is the option "A"

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.
Right Answer is the option "B"

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.
Right Answer is the option "A"

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.
Right Answer is the option "D"

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.
Right Answer is the option "A"

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.
Right Answer is the option "D"

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.
Right Answer is the option "D" Marginal propensity to consume: MPC = ΔC / ΔYd