What causes demand-pull inflation?
Correct answer C. Consumer, business and government demand for goods and services in excess of an economy’s capacity to produce
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Economics MCQs
Page 23 of Economics multiple-choice questions with answers. Tap an option to check yourself.
Page 23 of 131
- Miscellaneous Economics 737
- Basic of Economics 430
- Markets, Efficiency And The Public Interest 167
- Agriculture & Irrigation System of Pakistan 126
- Market 87
- Macroeconomic Issues and Analysis 75
- Money, Interest Rates And Output 73
- Introduction To Economics 70
- Population And Development 62
- Profit Maximizing Under Perfect Competition And Monopoly 56
- Income Inequality 52
- Non-Tariff Trade Barriers 48
- Aggregate Supply, Unemployment And Inflation 45
- Natural Resources and the Environment Toward Sustainable Development 44
- Costs , Supply And Perfect Competition 44
- Human Capital 42
- Labour Market 39
- Monopoly 35
- Long Term Economic Growth 30
- Inflation & Productivity 30
- Regional Trading Arrangements 29
- Characteristics and Institutions of Developing Countries 24
- Oligopoly 23
- Consumer Theory vs. Real Consumers 20
- Applied Microeconomics 20
- Alternative Theories Of The Firm 20
- Public Goods 20
- Balance of Payments, Aid and Foreign Investment 19
- Prices, Wages & Taxes 19
- Comparative GDP 19
- Budget Deficits And The Trade Balance 18
- Macroeconomic Policy Tools 18
- Asymmetric Information 17
- Application of Economics 16
- Production Factors 16
- Monopoly & Competition 15
- Capital Formation, Investment Choice, Information Technology, And Technical Progress 15
- Monetary, Fiscal And Incomes Policy, And Inflation 15
- Average And Total Cost 14
- Poverty, Malnutrition, And Income Inequality 12
- Monetary Union 10
Through fiscal policy, governments pursue goals for output, employment growth and price stability by varying which two things?
Correct answer B. Tax rates, government spending
Which principle states that as real GNP per head rises, people demand relatively more social goods and relatively fewer private goods?
Correct answer B. Wagner’s law
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Property tax, wealth tax, inheritance tax and income taxes such as personal and corporate tax are examples of which kind of tax?
Correct answer A. Direct taxes
When asymmetric information prevents the financial system from judging investment opportunities, so that bad credit risks may be accepted, what is lending subject to?
Correct answer D. Adverse selection
Central banks in developing countries (LDCs) generally have less effect on expenditure and output than in developed countries because of: I. an externally dependent banking system; II. a poorly developed securities market; III. a low share of demand deposits in the money supply; IV. investment and employment being relatively insensitive to monetary policy. Which apply?
Correct answer B. All of I, II, III and IV
Which of the following are costs of inflation: I. it weakens the development of credit and capital markets; II. it distorts business, especially investment, behaviour; III. it raises the price of foreign goods relative to domestic goods; IV. it imposes a tax on holders of money?
Correct answer B. I, II and IV only
Under financial repression, which statements are true: I. banks ration loans by non-price means; II. banks face pressure to lend to the politically connected; III. banks charge a high premium on foreign investments; IV. banks depend on foreign banks to set interest rates?
Correct answer D. I and II only
Countries A and B share a currency. If consumer preferences shift away from A’s goods towards B’s, which of the following would help offset the resulting effects on inflation and unemployment in the two countries?
Correct answer A. A high degree of labour mobility between the two countries
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Why does a high degree of real wage flexibility tend to reduce a country’s cost of joining a currency union?
Correct answer B. Real wages fall rapidly in a recession and the economy moves quickly back to long-run equilibrium, so limiting the duration of the recession even when exchange rate adjustment is not possible
How does the eurozone compare with the USA as a possible optimal currency area (OCA)?
Correct answer C. The eurozone has a lower degree of labour mobility than the USA and labour law is much more restrictive in the eurozone than in the USA; on these measures the eurozone is less likely to be an OCA than is the USA
Which agreement did EMU members sign to try to overcome the free-rider problem?
Correct answer C. The Stability and Growth Pact
Which of the following is NOT an argument in favour of the UK joining EMU?
Correct answer B. The characteristics of the UK housing market make UK consumers’ expenditure very sensitive to changes in interest rates
Which of these events would NOT count as an asymmetric macroeconomic shock?
Correct answer B. A sudden and substantial rise in prices on the world oil market
Which of the following is NOT a characteristic that reduces the cost of adopting a single currency?
Correct answer A. A high degree of trade integration among the countries of the common currency area
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What is meant by fiscal federalism?
Correct answer C. A fiscal system for a group of countries involving a common fiscal budget and a system of taxes and fiscal transfers across countries
What problem does fiscal policy face in a currency union?
Correct answer B. Governments of the member countries of the currency union may run large budget deficits and so impose costs on other countries by pushing up interest rates on the bonds these countries’ governments issue
What problem does monetary policy face in a currency union?
Correct answer C. The interest rate may be higher than is appropriate for economic conditions in some countries while it is lower than is appropriate in others; monetary policy must be one size fits all
According to Freud, which institution is crucial for personality development?
Correct answer A. The family
Where did Freud locate the libido?
Correct answer B. Within the id