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Economics MCQs

Economics

Quiz # 4, MCQs





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  1. 1)

    Which of the following is NOT a stock variable?


    • A) Government debt.
    • B) Capital.
    • C) The amount of money held by the public.
    • D) Inventory investment.

  2. 2)

    According to the model of aggregate supply and aggregate demand, in the long run, an increase in the money supply should cause:


    • A) Both prices and output to rise.
    • B) Prices to fall and output to remain unchanged.
    • C) Both prices and output to fall.
    • D) Prices to rise and output to remain unchanged.

  3. 3)

    Keynesian economics was the predominant economic theory:


    • A) Prior to the late 1700s.
    • B) From the late 1700s to the early 1900s.
    • C) From 1930s to 1970s.
    • D) Since 1970s.

  4. 4)

    According to Keynes, the economy does not self correct quickly because:


    • A) With less consumption and more savings the interest rate will drop.
    • B) In the short run workers are fully employed and cannot produce enough to get to long run equilibrium.
    • C) Wages and prices are flexible in the short run.
    • D) Wages and prices are sticky in the short run.

  5. 5)

    The marginal revenue product is:


    • A) Upward sloping due to the law of demand.
    • B) Upward sloping due to the law of marginal utility.
    • C) Downward sloping due to the law of diminishing returns.
    • D) Downward sloping due to the law of supply.

  6. 6)

    Cartels are:


    • A) Organizations of independent firms, producing similar products, that work together to raise prices and restrict output.
    • B) Organizations of interdependent firms, producing similar products, that work together to raise prices and restrict output.
    • C) Organizations of independent firms, producing different products, that work together to raise prices and restrict output.
    • D) Considered as part of monopolistic competition.

  7. 7)

    "The situation in which two or more firms set their prices and output according to a plan agreed upon between them in order to divide the market among themselves". Which of the following best describes this situation?


    • A) Strategic interaction.
    • B) Monopolistic competition.
    • C) Oligopoly.
    • D) Collusion.

  8. 8)

    Which of the following market situation is much like a pure monopoly except that its member firms tend to cheat on agreed upon price and output strategies?


    • A) Duopoly.
    • B) Cartel.
    • C) Market sharing monopoly.
    • D) Natural monopoly.

  9. 9)

    Under the kinked demand curve model, an increase in marginal cost will lead to:


    • A) An increase in output level and a decrease in price.
    • B) A decrease in output level and an increase in price.
    • C) Neither a change in output level nor a change in price.
    • D) A decrease in output level and no change in price.

  10. 10)

    Welfare economics is the branch of economics which deals with:


    • A) Positive issues.
    • B) Normative issues.
    • C) Micro issues.
    • D) Macro issues.