WordExchange

Economics MCQs

  • Economics MCQs FPSC NTS PPSC Past Papers Economy Test Questions

    Economics MCQs quiz test questions with answers for FPSC NTS PPSC SPSC KPPSC test preparation. Basic economics, microeconomics, macroeconomics, managerial economics and world economy multiple choice questions and answers.

    Economics MCQs

  • The accelerator principle states:

    (A) If an increase in investment is expected, output will increase.
    (B) If an increase in the growth of output is expected, investment will increase.
    (C) If an increase in the growth of investment is expected, output will increase.
    (D) Small swings in investment are associated with large swings of output.

    The answer is: (D)

  • One reason that we observe a tight link between consumption and disposable income is:

    There are strong theoretical reasons to expect that changes in wealth are responsible for changes in consumption. Nonetheless, one reason that we observe a tight link between consumption and disposable income is:
    (A) Credit rationing which changes the intertemporal budget constraint for borrowers.
    (B) Households attempt to smooth their consumption.
    (C) Household saving provides a buffer between income and expenditure.
    (D) Ricardian equivalence

    The answer is: (B) Households attempt to smooth their consumption.

  • The best measure to see overall performance of an economy is

    (A) GDP
    (B) GNP
    (C) trade deficit
    (D) Debt-GDP ratio

    The answer is: (A) GDP

  • The fundamental concept of Economics about resources is that the resources are

    (A) equally distributed
    (B) unequally distributed
    (C) scarce
    (D) unlimited

    The answer is: (C) scarce

  • Consider a world without scarcity of resources. Then what would be the consequences?

    (A) All prices would be zero
    (B) Markets would be unnecessary
    (C) Economics would no longer be a useful subject
    (D) All of the above

    The answer is: (D) All of the above

  • If currency of a country gains strength, what from the following statement would NOT be true?

    (A) Imports would be cheaper
    (B) Exports would be expensive
    (C) foreign investment in the country would be more attractive
    (D) foreign investment in the country would be less attractive

    The answer is: (D) foreign investment in the country would be less attractive

  • Who is considered the founder of Microeconomics?

    (A) Adam Smith
    (B) John Keynes
    (C) Friedrich Hayek
    (D) Milton Friedman

    The answer is: (A) Adam Smith

  • Who is considered the founder of modern Macroeconomics?

    (A) Adam Smith
    (B) John Keynes
    (C) Friedrich Hayek
    (D) Milton Friedman

    The answer is: (B) John Keynes

  • The fundamental inputs (also called factors of production) are

    (A) land and capital
    (B) land and labor
    (C) land, labor, and capital
    (D) land, labor, capital, and investment

    The answer is: (C) land, labor, and capital
    Inputs are combined with technology to produce outputs. The fundamental inputs (also called factors of production) are land, labor, and capital.