The government increases its purchases by Rs 16 billion. If the multiplier effect is larger than the crowding-out effect, what happens?
Correct answer B. The aggregate demand curve shifts to the right by more than Rs 16 billion
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Economics MCQs
Page 76 of Economics multiple-choice questions with answers. Tap an option to check yourself.
Page 76 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
Which of these acts as an automatic stabiliser?
Correct answer A. Unemployment benefits
Unemployment that results from imperfect information in the labour market is called what?
Correct answer A. Frictional
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Demand for ice cream falls outside summer, so ice cream sellers lose work if they cannot find other jobs. What type of unemployment is this?
Correct answer B. Seasonal
As prices rise, people want to hold more money as cash and in bank accounts. What is this called?
Correct answer A. Real balance effect
What are government policies aimed at increasing production rather than demand called?
Correct answer B. Supply-side policies
What are government policies that work by changing interest rates known as?
Correct answer D. Monetary policies
If VAT rates go up, what is likely to happen to costs and to demand?
Correct answer B. Rise; fall
What is the record of a country’s imports and exports of goods only called?
Correct answer A. Visible trade balance
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What is the name for the record of a country’s imports and exports of goods and services, plus net investment income and current transfers to and from abroad?
Correct answer C. Balance of payments on current account
Which part of a country’s accounts records transfers of land, inter-government payments and money sent by migrants to and from abroad?
Correct answer A. Capital account of the balance of payments
What is the price of one country’s currency expressed in terms of another’s called?
Correct answer B. Exchange rate
If a country’s interest rates are low compared with those in other countries, what will tend to happen to the exchange value of its currency?
Correct answer D. Depreciate
If Pakistan earns more export revenue than expected, what will tend to happen to the exchange value of its currency?
Correct answer D. Appreciate
If currency dealers expect the pound to lose value, what will tend to happen to its exchange value?
Correct answer C. Depreciate
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If the US economy is expected to leave recession because military spending has increased, what will tend to happen to the exchange value of the UK pound?
Correct answer A. Appreciate
During the expansionary phase of the business cycle, how are aggregate demand, unemployment and inflation likely to move, and in which direction will the balance of payments current account tend to shift?
Correct answer B. Rises; falls; rises; deficit
Why is economic growth considered important?
Correct answer C. People want higher incomes and more consumer goods
In the recessionary phase of the business cycle, how are aggregate demand, unemployment and inflation likely to move, and in which direction will the current account of the balance of payments tend to shift?
Correct answer A. Falls; rises; falls; surplus
Which of these is NOT regarded as a cause of economic growth?
Correct answer B. An increase in the money supply