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Economics MCQs with Explanations

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1511EconomicsMedium

What yield of cotton crop is recorded in Pakistan?

A641 kgs/hec

B621 kgs/hec

C570 kgs/hec

D645 kgs/hec

Correct answer

C. 570 kgs/hec

Explanation

The correct answer is 570 kgs/hec.

1512EconomicsMedium

Name the system in which the means of production and distribution are privately or corporate owned and development is proportionate to the accumulation and reinvestment of profits which are gained in a free market?

AFree market economy

BSocialism

CLiberalism

DCapitalism

Correct answer

D. Capitalism

Explanation

The correct answer is Capitalism.

1513EconomicsMedium

The government increase government spending to try to reduce unemployment This is an example of?

Aautomatic stablisers

Bfine tuning

Claissez-faire.

Dmonetary policy

Correct answer

B. fine tuning

Explanation

The correct answer is fine tuning.

1514EconomicsMedium

The natural rate of unemployment is likely to fall if?

AIncome tax increases

BMore training is available for the unemployed

CGeographical immobility increases

Dunemployment benefits increase

Correct answer

D. unemployment benefits increase

Explanation

The correct answer is unemployment benefits increase.

1515EconomicsMedium

An increase in injections into the economy may lead to?

AAn outward shift of aggregate supply and cost push inflation

BAn outward shift of aggregate demand- and demand-pull inflation

CAn outward shift of aggregate supply and demand-pull inflation

DAn outward shift of aggregate demand and cost push inflation

Correct answer

B. An outward shift of aggregate demand- and demand-pull inflation

Explanation

The correct answer is An outward shift of aggregate demand- and demand-pull inflation.

1516EconomicsMedium

That the division of labor is limited by the size of the market best applies to which explanation of trade?

AProduct life cycle theory

BEconomies of scale theory

CFactor endowment theory

DOverlapping demand theory

Correct answer

B. Economies of scale theory

Explanation

The correct answer is Economies of scale theory.

1517EconomicsMedium

Which of the following is not an assumption of Schumpeter’s stationary state?

ANo entrepreneurial function is required

BPerfect competition

CAn economy below full employment

DNo savings or technical change

Correct answer

C. An economy below full employment

Explanation

The correct answer is An economy below full employment.

1518EconomicsMedium

Monopoly advantage is usually the result of greater opportunities such as?

AI and II only

BII and III only

CI, II, III, and IV

DI, II and III only

Correct answer

A. I and II only

Explanation

The correct answer is I and II only.

1519EconomicsMedium

The idea that the demand for car workers stems from the demand for cars is?

Aderived demand

Boutput demand

Cthe value of the marginal product of auto workers.

Dindirect demand

Correct answer

A. derived demand

Explanation

The correct answer is derived demand.

1520EconomicsMedium

Which of the following would not cause a shift in the long-run aggregate supply curve?

AAn increase in the available capital

BAn increase in the available labour

CAll of these answers shift the long-run aggregate supply curve

DAn increase in price expectations

Correct answer

D. An increase in price expectations

Explanation

The correct answer is An increase in price expectations.

An increase in injections into the economy may lead to?

AAn outward shift of aggregate supply and cost push inflation

BAn outward shift of aggregate demand- and demand-pull inflation

CAn outward shift of aggregate supply and demand-pull inflation

DAn outward shift of aggregate demand and cost push inflation

Correct answer

B. An outward shift of aggregate demand- and demand-pull inflation

Explanation

The correct answer is An outward shift of aggregate demand- and demand-pull inflation.