MCQs

Economics MCQs with Explanations

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711EconomicsMedium

________ is the backbone of the Pakistan economy and the mainstay of our national economic life?

AService

BAgriculture

CIndustrial

DTrade

Correct answer

B. Agriculture

Explanation

The correct answer is Agriculture.

712EconomicsMedium

Which resources are scarce in every society?

AWheat and com

BFertile land

CSufficient males to mate with all the females

DFood shelter and protective coverings

Correct answer

D. Food shelter and protective coverings

Explanation

The correct answer is Food shelter and protective coverings.

713EconomicsMedium

If your grandparents buy a newly built retirement home, this transaction would affect?

Aconsumption

Bnet exports

Cnone of these answers

Dgovernment purchases

Einvestment

Correct answer

E. investment

Explanation

The correct answer is investment.

714EconomicsMedium

If a product is an inferior good?

ADemand is directly related to price

BDemand is inversely related to the price of substitutes

CDemand in inversely related to price

DDemand is inversely related to income

Correct answer

D. Demand is inversely related to income

Explanation

The correct answer is Demand is inversely related to income.

715EconomicsMedium

The idea of convergence of GDP in Europe suggests that?

APoorer countries have higher capital/labour ratios than richer countries.

BPoorer less developed countries will catch up with richer ones.

CAll countries will eventually join the EEC

DThe gap between countries GDP per head will widen

Correct answer

B. Poorer less developed countries will catch up with richer ones.

Explanation

The correct answer is Poorer less developed countries will catch up with richer ones..

716EconomicsMedium

The difference between the balance on current account and the balance on capital account is the?

Abalance of payments

Btrade deficit

Cstatistical discrepancy

Dbalance of trade

Correct answer

C. statistical discrepancy

Explanation

The correct answer is statistical discrepancy.

717EconomicsMedium

The high cost of fighting crime is due in large part to________?

Aan increase in prison inmates

Btax cuts instituted by the present administration

Cthe increase in organized crime

Dhigh unemployment rates

Correct answer

A. an increase in prison inmates

Explanation

The correct answer is an increase in prison inmates.

718EconomicsMedium

The initial impact of an increase in government spending is to shift?

Aaggregate demand to the right

Baggregate supply to the left

Caggregate supply to the right

Daggregate demand to the left

Correct answer

A. aggregate demand to the right

Explanation

The correct answer is aggregate demand to the right.

719EconomicsMedium

Suppose a wave of investor and consumer pessimism in the USA causes a reduction in spending If the US federal Reserve (Which has a broader remit than the Bank of England Which is charged only with controlling inflation) chooses to engage in activist stabilization policy it should?

Adecrease interest rates

Bdecrease the money supply

Cdecrease government spending and increase taxes

DIncrease government spending and decrease taxes

Correct answer

A. decrease interest rates

Explanation

The correct answer is decrease interest rates.

720EconomicsMedium

Malaysia is the chief exporter of?

ATin

BRubber

CDiamond

DJute

Correct answer

B. Rubber

Explanation

The correct answer is Rubber.

The idea of convergence of GDP in Europe suggests that?

APoorer countries have higher capital/labour ratios than richer countries.

BPoorer less developed countries will catch up with richer ones.

CAll countries will eventually join the EEC

DThe gap between countries GDP per head will widen

Correct answer

B. Poorer less developed countries will catch up with richer ones.

Explanation

The correct answer is Poorer less developed countries will catch up with richer ones..