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Economics MCQs with Explanations

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451EconomicsMedium

Land labor capital and entrepreneurship?

Ahave no function in the production of goods and service

Bmust be used separately to produce goods and service

Cmust be combined in the production of goods and service

Dcreate a balance between humans and their environment

Correct answer

C. must be combined in the production of goods and service

Explanation

The correct answer is must be combined in the production of goods and service.

452EconomicsMedium

Which of the following is an example of a reason why firms might pay efficiency wages?

AAt equilibrium wages workers sleep when the boss is not looking because workers are not deeply concerned about being fired

BAt equilibrium wages workers often quit to find better jobs.

CAll of these answers

DAt equilibrium wages only minimally qualified workers apply for the job

EAt equilibrium wages, workers cannot afford a healthy diet so they fall asleep at work due to a lack of energy

Correct answer

C. All of these answers

Explanation

The correct answer is All of these answers.

453EconomicsMedium

________ is quoted as saying that everyone lives by selling something?

AHenry Ford

BRobert Louis Stevenson

CArthur Miller

DBill Gates

Correct answer

B. Robert Louis Stevenson

Explanation

The correct answer is Robert Louis Stevenson.

454EconomicsMedium

What is a Debenture?

ACertificate for the investment in shares

BNone of these

CCertificate for the preference share

DCertificate issued by a company promising the payment of a specified amount at a fixed rate of interest after a specified period

Correct answer

D. Certificate issued by a company promising the payment of a specified amount at a fixed rate of interest after a specified period

Explanation

The correct answer is Certificate issued by a company promising the payment of a specified amount at a fixed rate of interest after a specified period.

455EconomicsMedium

A group of economists argue that the real problem with the economy is high rates of taxation and heavy regulation that reduce the incentives to work, save and invest. These economists are?

Anew classical economists.

BSupply-side economics

Cneo-Keynesian economists

Drational-expectations economists.

Correct answer

B. Supply-side economics

Explanation

The correct answer is Supply-side economics.

456EconomicsMedium

If there is a balance of payments deficit then in a floating exchange rate system?

AAggregate demand is increasing

BThe injections from trade are greater then the withdrawals

CThe external value of the currency would tend to rise

DThe external value of the currency would tend to fall

Correct answer

D. The external value of the currency would tend to fall

Explanation

The correct answer is The external value of the currency would tend to fall.

457EconomicsMedium

A major weakness of the kinked demand curve model of oligopoly is that?

Ait assumes that firms believe that their rivals will not respond to any price change they initiate

BReal-world pricing strategies are more simple than those assumed in this model

Cit fails to explain how a firm arrived at its price and output decision initially

DThe model cannot be tested empirically.

Correct answer

C. it fails to explain how a firm arrived at its price and output decision initially

Explanation

The correct answer is it fails to explain how a firm arrived at its price and output decision initially.

458EconomicsMedium

Which of the following groups would be most harmed by a UK government budget deficit?

ABAe Systems wishing to sell aircraft to Saudi Arabia

BForeigners who wish to buy assets in the UK

CUK residents wishing to buy foreign Produced cars

DLenders of loanable funds

Correct answer

A. BAe Systems wishing to sell aircraft to Saudi Arabia

Explanation

The correct answer is BAe Systems wishing to sell aircraft to Saudi Arabia.

459EconomicsMedium

Investment is?

AThe purchase of goods and services

BWhen we place our saving in the bank

CThe purchase of stocks and bonds

DThe purchase of capital equipment and structures

Correct answer

D. The purchase of capital equipment and structures

Explanation

The correct answer is The purchase of capital equipment and structures.

460EconomicsMedium

The property tax wealth tax inheritance tax and income taxes such as persona and corporate taxes are?

Ainelastic

Bindirect taxes

Cdirect taxes

Dvalue-added tax

Correct answer

C. direct taxes

Explanation

The correct answer is direct taxes.

451EconomicsMedium

Land labor capital and entrepreneurship?

Ahave no function in the production of goods and service

Bmust be used separately to produce goods and service

Cmust be combined in the production of goods and service

Dcreate a balance between humans and their environment

Correct answer

C. must be combined in the production of goods and service

Explanation

The correct answer is must be combined in the production of goods and service.

452EconomicsMedium

Which of the following is an example of a reason why firms might pay efficiency wages?

AAt equilibrium wages workers sleep when the boss is not looking because workers are not deeply concerned about being fired

BAt equilibrium wages workers often quit to find better jobs.

CAll of these answers

DAt equilibrium wages only minimally qualified workers apply for the job

EAt equilibrium wages, workers cannot afford a healthy diet so they fall asleep at work due to a lack of energy

Correct answer

C. All of these answers

Explanation

The correct answer is All of these answers.

453EconomicsMedium

________ is quoted as saying that everyone lives by selling something?

AHenry Ford

BRobert Louis Stevenson

CArthur Miller

DBill Gates

Correct answer

B. Robert Louis Stevenson

Explanation

The correct answer is Robert Louis Stevenson.

454EconomicsMedium

What is a Debenture?

ACertificate for the investment in shares

BNone of these

CCertificate for the preference share

DCertificate issued by a company promising the payment of a specified amount at a fixed rate of interest after a specified period

Correct answer

D. Certificate issued by a company promising the payment of a specified amount at a fixed rate of interest after a specified period

Explanation

The correct answer is Certificate issued by a company promising the payment of a specified amount at a fixed rate of interest after a specified period.

455EconomicsMedium

A group of economists argue that the real problem with the economy is high rates of taxation and heavy regulation that reduce the incentives to work, save and invest. These economists are?

Anew classical economists.

BSupply-side economics

Cneo-Keynesian economists

Drational-expectations economists.

Correct answer

B. Supply-side economics

Explanation

The correct answer is Supply-side economics.

456EconomicsMedium

If there is a balance of payments deficit then in a floating exchange rate system?

AAggregate demand is increasing

BThe injections from trade are greater then the withdrawals

CThe external value of the currency would tend to rise

DThe external value of the currency would tend to fall

Correct answer

D. The external value of the currency would tend to fall

Explanation

The correct answer is The external value of the currency would tend to fall.

457EconomicsMedium

A major weakness of the kinked demand curve model of oligopoly is that?

Ait assumes that firms believe that their rivals will not respond to any price change they initiate

BReal-world pricing strategies are more simple than those assumed in this model

Cit fails to explain how a firm arrived at its price and output decision initially

DThe model cannot be tested empirically.

Correct answer

C. it fails to explain how a firm arrived at its price and output decision initially

Explanation

The correct answer is it fails to explain how a firm arrived at its price and output decision initially.

458EconomicsMedium

Which of the following groups would be most harmed by a UK government budget deficit?

ABAe Systems wishing to sell aircraft to Saudi Arabia

BForeigners who wish to buy assets in the UK

CUK residents wishing to buy foreign Produced cars

DLenders of loanable funds

Correct answer

A. BAe Systems wishing to sell aircraft to Saudi Arabia

Explanation

The correct answer is BAe Systems wishing to sell aircraft to Saudi Arabia.

459EconomicsMedium

Investment is?

AThe purchase of goods and services

BWhen we place our saving in the bank

CThe purchase of stocks and bonds

DThe purchase of capital equipment and structures

Correct answer

D. The purchase of capital equipment and structures

Explanation

The correct answer is The purchase of capital equipment and structures.

460EconomicsMedium

The property tax wealth tax inheritance tax and income taxes such as persona and corporate taxes are?

Ainelastic

Bindirect taxes

Cdirect taxes

Dvalue-added tax

Correct answer

C. direct taxes

Explanation

The correct answer is direct taxes.