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Economics MCQs with Explanations

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1781EconomicsMedium

The highest birthrates today are found in________?

Ahighly developed nations

BWestern Europe

Cthe underdeveloped nations

DJapan

Correct answer

C. the underdeveloped nations

Explanation

The correct answer is the underdeveloped nations.

1782EconomicsMedium

Which one of the following is not true?

AThe difference between the price at which commercial bank sells an asset to the central bank and the price it agrees to buy it back can be expressed as an annualized percentage of the selling price and this is called the refinancing rate

BIf the central bank raises its refinancing rate then the commercial banks will try to reduce their lending and so reduce the need to borrow from the central bank

CCommercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate

DIn the UK the refinancing rate is known as the repo rate and in the USA it is referred to as the discount rate.

EIf the central bank has bought some assets from a commercial bank with an agreement that the commercial bank will buy them back at a later date, then this would be called a repo

Correct answer

C. Commercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate

Explanation

The correct answer is Commercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate.

1783EconomicsMedium

The industrial concentration ratio is the proportion of an industry’s output?

Aproduced by the three largest firms in the industry

Band labor intensities relative to labor productivity

Cproduced in cement, machine tools and steel industries

Das a percentage of production and marketing

Correct answer

A. produced by the three largest firms in the industry

Explanation

The correct answer is produced by the three largest firms in the industry.

1784EconomicsMedium

The appropriate tax rate to consider gauging how much the tax system distorts incentives and decision making is the?

Aaverage tax rate

Bvertical tax rate

Chorizontal tax rate

DProportional tax rate

Emarginal tax rate

Correct answer

E. marginal tax rate

Explanation

The correct answer is marginal tax rate.

1785EconomicsMedium

Refer to Exhibit 6.Suppose the economy is in long-run equilibrium at point E. A sudden increase in government spending should move the economy in the direction of point?

Correct answer

B. d

Explanation

The correct answer is d.

1786EconomicsMedium

One of the predictions of the Heckscher-Ohlin model is that?

Acountries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other

BAll of the above

Creciprocal demand leads to an equilibrium terms of trade by inducing change in both demand and supply

Dcountries with tend to specialize but not completely in their comparative advantage good

Correct answer

B. All of the above

Explanation

The correct answer is All of the above.

1787EconomicsMedium

Kharif crops include?

Abajra & jawar

Bcotton & maze

CAll of them

Drise & sugarcane

Correct answer

C. All of them

Explanation

The correct answer is All of them.

1788EconomicsMedium

The surplus caused by a binding price floor will be greatest if?

Aboth supply and demand are inelastic

Bboth supply and demand are elastic

Cdemand is inelastic and supply in elastic

Dsupply is inelastic, and demand is elastic

Correct answer

B. both supply and demand are elastic

Explanation

The correct answer is both supply and demand are elastic.

1789EconomicsMedium

Which of the following is not true?

ALife expectancy is probably the best single indicator of national health levels

BThere are growing inequalities in investment in health worldwide

CLife expectancy in Africa increased steadily from 1994 to 2003 due to better health care

DDevelopment generally improves the health system while better health increases productivity social cohesion, and economic welfare

Correct answer

C. Life expectancy in Africa increased steadily from 1994 to 2003 due to better health care

Explanation

The correct answer is Life expectancy in Africa increased steadily from 1994 to 2003 due to better health care.

1790EconomicsMedium

In the absence of international capital controls, central banks set ________ to provide the correct incentive for speculators?

Ainterest rates

Bmoney supply targets

Cincome policy

Dinflation targets

Correct answer

A. interest rates

Explanation

The correct answer is interest rates.

Which one of the following is not true?

BIf the central bank raises its refinancing rate then the commercial banks will try to reduce their lending and so reduce the need to borrow from the central bank

CCommercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate

DIn the UK the refinancing rate is known as the repo rate and in the USA it is referred to as the discount rate.

EIf the central bank has bought some assets from a commercial bank with an agreement that the commercial bank will buy them back at a later date, then this would be called a repo

Correct answer

C. Commercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate

Explanation

The correct answer is Commercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate.

The industrial concentration ratio is the proportion of an industry’s output?

Aproduced by the three largest firms in the industry

Band labor intensities relative to labor productivity

Cproduced in cement, machine tools and steel industries

Das a percentage of production and marketing

Correct answer

A. produced by the three largest firms in the industry

Explanation

The correct answer is produced by the three largest firms in the industry.

One of the predictions of the Heckscher-Ohlin model is that?

Acountries with different factor endowments but similar technologies and preferences will have a strong basis for trade with each other

BAll of the above

Creciprocal demand leads to an equilibrium terms of trade by inducing change in both demand and supply

Dcountries with tend to specialize but not completely in their comparative advantage good

Correct answer

B. All of the above

Explanation

The correct answer is All of the above.

Which of the following is not true?

ALife expectancy is probably the best single indicator of national health levels

BThere are growing inequalities in investment in health worldwide

CLife expectancy in Africa increased steadily from 1994 to 2003 due to better health care

DDevelopment generally improves the health system while better health increases productivity social cohesion, and economic welfare

Correct answer

C. Life expectancy in Africa increased steadily from 1994 to 2003 due to better health care

Explanation

The correct answer is Life expectancy in Africa increased steadily from 1994 to 2003 due to better health care.