100 MCQ on Economics with answer
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100 MCQ on Economics with answer
1. Who is the father of Economics ?
A. Max Muller
B.
Adam Smith
C.
Karl Marx
D.
None of these
above
Answer-B
2. Indian Economy is :
A. Socialistic Economy
B.
Gandhian Economy
C.
Mixed Economy
D.
Free Economy
Answer-C
3. Mixed economy means an economy where
A. both agriculture and industry are equally promoted by the state
B.
there is
co-existence of public sector along with private sector
C.
there is
importance of small scale industries along with heavy industries
D.
economy is controlled
by military as well as civilian rulers
Answer-B
4. India's economic planning CANNOT be said to be :
A. indicative
B.
imperative
C.
limited
D.
democratic
Answer-B
5. Which one of the following is the task of the Planning Commission ?
A. Preparation of the plan
B.
Implementation of
the plan
C.
Financing of the
plan
D.
None of these
above
Answer-A
6 Which one of the following bodies finalizes the Five Year Plan Proposals ?
A. Planning Commission
B.
Union Cabinet
C.
National
Development Council
D.
Ministry of
Planning
Answer-C
7. Which one of the following is true about Planning Commission ?
A. It is a Ministry
B.
It is a
Government Department
C.
It is an Advisory
Body
D.
It is an
Autonomous Corporation
Answer-C
8. Economic survey is published by :
A. Ministry of Finance
B.
Planning
Commission
C.
Govt of India
D.
Indian
Statistical Institute
Answer-A
9. Who is the Chairman of the Planning Commission in India ?
A. President
B.
Vice President
C.
Prime Minister
D.
Finance Minister
Answer-C
10. The Deputy Chairman of the Planning Commission :
A. HRD Minister
B.
Finance Minister
C.
Holds the rank of
a cabinet minister
D.
is an economist
of repute
Answer-C
11. ‘Globalisation of Indian Economy’ means:
A. Stepping up external borrowings
B.
Establishing
Indian Shopping Malls in abroad
C.
Giving up
programmes of import substitution
D.
Having minimum
possible restrictions on economic relations with other countries
Answer-D
12. National Development Council was set up in:
A. 1952
B.
1950
C.
1949
D.
1948
Answer-A
13. ‘Take off stage’ in an economy means:
A. Economy is stagnant
B.
Steady growth
begins
C.
Economy is about
to collapse
D.
All controls are
removed
Answer-B
14. Which of the following indicates economic growth through Five Year Plans ?
A. Rise in national income and per capita income
B.
Development of
railways and roadways
C.
Development of
education and health services
D.
Development of
industrial towns and industrial estate
Answer-A
15. Which of the following statements about the Indian Economy is correct ?
A. In India, single biggest employment is agriculture and allied activities
B.
No physical
targets were visualized
C.
About 48% Indian
workforce is employed in foreign countries or in organizations assisted by
foreign capital
D.
About 70% Indians
are involved in some type of self- employment and are the owners of some or the
other micro or small enterprise
Answer-A
16. In the context of India’s Five Year Plans, a shift in the pattern of industrialization, with lower emphasis on heavy industries and more on infrastructure begins in
A. Tenth Plan
B.
Eighth Plan
C.
Sixth Plan
D.
Fourth Plan
Answer-B
17. A “closed economy” is a kind of economy in which
A. Only exports take place
B.
The money supply
is fully controlled
C.
Deficit financing
takes place
D.
Neither exports
nor imports take place
Answer-D
18. Which statement is correct for Indian Planning Commission ?
A. Members do not require any minimum education
B.
It is not defined
in Indian Constitution
C.
Members and
Vice-Chairman of it do not have fixed working duration
D.
All of the these
Answer-D
19. The author of the chapter on “Objectives of Planned Development” for the Third Five Year Plan was:
A. Jawaharlal Nehru
B.
Morarji Desai
C.
C.D.Deshmukh
D.
Lal Bahadur
Shastri
Answer-B
20. “Functional Finance” is associated with:
A. Adams
B.
Adam Smith
C.
Adolph Wogner
D.
Abba ‘P’ Lerner
Answer-D
A. Max Muller
2. Indian Economy is :
A. Socialistic Economy
3. Mixed economy means an economy where
A. both agriculture and industry are equally promoted by the state
4. India's economic planning CANNOT be said to be :
A. indicative
5. Which one of the following is the task of the Planning Commission ?
A. Preparation of the plan
6 Which one of the following bodies finalizes the Five Year Plan Proposals ?
A. Planning Commission
7. Which one of the following is true about Planning Commission ?
A. It is a Ministry
8. Economic survey is published by :
A. Ministry of Finance
9. Who is the Chairman of the Planning Commission in India ?
A. President
10. The Deputy Chairman of the Planning Commission :
A. HRD Minister
11. ‘Globalisation of Indian Economy’ means:
A. Stepping up external borrowings
12. National Development Council was set up in:
A. 1952
13. ‘Take off stage’ in an economy means:
A. Economy is stagnant
14. Which of the following indicates economic growth through Five Year Plans ?
A. Rise in national income and per capita income
15. Which of the following statements about the Indian Economy is correct ?
A. In India, single biggest employment is agriculture and allied activities
16. In the context of India’s Five Year Plans, a shift in the pattern of industrialization, with lower emphasis on heavy industries and more on infrastructure begins in
A. Tenth Plan
17. A “closed economy” is a kind of economy in which
A. Only exports take place
18. Which statement is correct for Indian Planning Commission ?
A. Members do not require any minimum education
19. The author of the chapter on “Objectives of Planned Development” for the Third Five Year Plan was:
A. Jawaharlal Nehru
20. “Functional Finance” is associated with:
A. Adams
21.As per the TRIPS Agreement 1994, a
good originating from a region with specific character/quality/reputation is
covered/to be protected under the IPR as
A.
Patent
B.
Trademark
C.
Trade sector
D.
GI (Geographical
Indicator)
Answer-D
22. The economist who believed that unemployment is impossible and that market mechanism has a built in regulatory system to meet any ups and downs
A. Ohlin
B.
J.B. Say
C.
Galbraith
D.
J.M. Keynes
Answer-B
23. A philosophy that the worker should share in industrial decisions is termed as
A. Worker dictatorship
B.
Industrial
socialism
C.
Worker
sovereignty
D.
Industrial
democracy
Answer-D
24. According to Modern Theory of Rent, rent accrues to
A. Any factor
B.
Capital only
C.
Land only
D.
Labour only
Answer-A
25. The book which is at the centerpiece of the study of Macro-Economics was written by
A. Prof. Benham
B.
Prof. Baumol
C.
Prof. Samuelson
D.
Prof. J.M. Keynes
Answer-D
26. The basic problem studied in Macro-Economics is
A. Usage of income
B.
Flow of income
C.
Production of
income
D.
Distribution of
income
Answer-C
27. ‘Take-off stage’ in an economy means
A. Steady growth begins
B.
Economy is
stagnant
C.
Economy is about
to collapse
D.
All controls are
removed
Answer-A
29. The relationship between the rate of interest and level of consumption was first visualized by
A. Amartya K. Sen
B.
Irving Fisher
C.
Milton Friedman
D.
James Duesenberry
Answer-B
30. Multiplier process in economic theory is conventionally taken to mean:
A. The manner in which prices increase
B.
The manner in
which banks create credit
C.
The manner in
which government expenditure increases
D.
Income of an
economy grows on account of an initial investment
Answer-D
31. Which of the following concepts are most closely associated with J.M. Keynes?
A. Marginal utility theory
B.
Control of money
supply
C.
Marginal
efficiency of capital
D.
Indifference
curve analysis
Answer-C
32. Evaluating all the options to find out most suitable solution to business problems is inter-displinary activities. It is called
A. Commercial research
B.
Operational
research
C.
Management
research
D.
Professional
research
Answer-B
33. In a Laissez-faire economy
A. The Government controls the allocation of all the factors of production
B.
The customers
take all the decisions regarding production of all the commodities
C.
The Government
does not interfere in the free functioning of demand and supply forces in the
market
D.
The private
sector takes all the decisions for price determination of various commodities
produced
Answer-
34. In Economics, production means
A. Farming
B.
Creating Utility
C.
Making
D.
Manufacturing
Answer-B
35. With which form of economy is the term ‘Laissez-faire’ associated?
A. Command economy
B.
Mixed economy
C.
Socialist economy
D.
Capitalist
economy
Answer-D
36. Who among the following is not a classical economist?
A. John Maynard Keynes
B.
Thomas Malthus
C.
John Stuart Mill
D.
David Ricardo
Answer-A
37. In Economics the ‘Utility’ and ‘Usefulness’ have
A. Same meaning
B.
Different meaning
C.
Opposite meaning
D.
None of the above
Answer-B
38. “Economics is what it ought to be” – This statement refers to
A. Fiscal economics
B.
Monetary
economics
C.
Positive
economics
D.
Normative
economics
Answer-D
39. The problem of Economics arises from
A. Plenty
B.
Scarcity of goods
C.
More wants and
less goods
D.
All of the above
Answer-C
40. The symbol of Reserve Bank of India is
A. Tiger before a Palm tree
B.
Capitol of Asokan
Pillar
C.
Kuber with a
purse of money
D.
A Dog sitting in
a defensive state
Answer-A
22. The economist who believed that unemployment is impossible and that market mechanism has a built in regulatory system to meet any ups and downs
A. Ohlin
23. A philosophy that the worker should share in industrial decisions is termed as
A. Worker dictatorship
24. According to Modern Theory of Rent, rent accrues to
A. Any factor
25. The book which is at the centerpiece of the study of Macro-Economics was written by
A. Prof. Benham
26. The basic problem studied in Macro-Economics is
A. Usage of income
27. ‘Take-off stage’ in an economy means
A. Steady growth begins
29. The relationship between the rate of interest and level of consumption was first visualized by
A. Amartya K. Sen
30. Multiplier process in economic theory is conventionally taken to mean:
A. The manner in which prices increase
31. Which of the following concepts are most closely associated with J.M. Keynes?
A. Marginal utility theory
32. Evaluating all the options to find out most suitable solution to business problems is inter-displinary activities. It is called
A. Commercial research
33. In a Laissez-faire economy
A. The Government controls the allocation of all the factors of production
34. In Economics, production means
A. Farming
35. With which form of economy is the term ‘Laissez-faire’ associated?
A. Command economy
36. Who among the following is not a classical economist?
A. John Maynard Keynes
37. In Economics the ‘Utility’ and ‘Usefulness’ have
A. Same meaning
38. “Economics is what it ought to be” – This statement refers to
A. Fiscal economics
39. The problem of Economics arises from
A. Plenty
40. The symbol of Reserve Bank of India is
A. Tiger before a Palm tree
Answer-A
41. The achieve high rates of growth
of national output, the economy has to
A. Borrow foreign capital
B.
Step up the rate
of savings
C.
Reduce the rate
of growth of population
D.
Increase the rate
of investment and reduce the capital output ratio
Answer-D
42. National income refers to
A. Money value of stocks and shares of a country during a year
B.
Money value of
capital goods produced by a country during a year
C.
Money value of
consumer goods produced by a country during a year
D.
Money value of
goods and services produced in a country during a year
Answer-B
43. Why did the Government ban the import of “Terminator seeds”?
A. To contain a virus which can destroy local crops
B.
These seeds
multiply at very slow rates
C.
These seeds are
injurious to human and animal health
D.
These seeds
contain genetically engineered properties to prevent further multiplication
Answer-D
44. Merchant Banking is an institution which provides finances to:
A. International trade among countries
B.
Domestic retail
trade among
C.
International aid
agencies
D.
Domestic whole
sale trade
Answer-A
45. Which amidst the following taxes collected by the Union is NOT mandated to be assigned to the States?
A. Service Tax
B.
Taxes on
consignment of goods
C.
Taxes on railway
fares and freights
D.
Terminal taxes on
goods or passengers carried by railway, sea or air
Answer-A
46. Inflation is caused by:
A. Increase in supply of goods
B.
Decrease in money
supply
C.
Increase in money
supply
D.
Increase in cash
with the government
Answer-C
47. Open market operation refers to
A. Purchase and sale of Government securities by the R.B.I.
B.
Purchase and sale
of bounds and securities by the Central Govt.
C.
Borrowing by
commercial banks from the R.B.I.
D.
Lending by
scheduled banks to non-scheduled banks
Answer-A
48. What is the main function of Central Statistical Organisation (CSO)?
A. Determination of money supply
B.
Price
determination
C.
Collection of
estimates of national income
D.
Collection of
detail data regarding employment
Answer-C
49. What does National Income mean?
A. The total value of all consumer goods produced in the country during a period of one year
B.
The total value
of all capital goods produced in the country during a period of one year
C.
The total value
of all stocks and shares in the country during a period of one year
D.
The total value
of all goods and services produced in the country during a period of one year
Answer-D
50. Which one of the following is not an industrial finance institution?
A. UTI
B.
SFCs
C.
ICICI
D.
NABARD
Answer-D
51. The largest source of revenue to the Union Government is
A. Central Excise Duty
B.
Customs Duty
C.
Income Tax
D.
Wealth Tax
Answer-A
52. Which bank in India performs duties of Central Bank?
A. State Bank of India
B.
Central Bank of
India
C.
Reserve Bank of
India
D.
Above (A) and (B)
Answer-C
53. Which of the following is not the source of the revenue of central Government?
A. Income Tax
B.
Excise Duty
C.
Corporate Tax
D.
Agricultural
Income Tax
Answer-D
54. Which one of the following is not an objective of Fiscal Policy in India?
A. Price Stability
B.
Full Employment
C.
Regulation of
International Trade
D.
Equitable
Distribution of Wealth and Incomes
Answer-C
55. The best example of a capital intensive industry in India is
A. Steel Industry
B.
Tourism Industry
C.
Textile Industry
D.
Sports Goods
Industry
Answer-A
56. Which one of the following is not included while estimating national income through income method?
A. Rent
B.
Pension
C.
Mixed Income
D.
Undistributed
profits
Answer-D
57. Who advocated the adoption of ‘PURA’ model to eradicate rural poverty?
A. A.M. Khusro
B.
Dr. A.P.J. Abdul
Kalam
C.
M.S. Swami Nathan
D.
Maulana Abul
Kalam Azad
Answer-B
58. The main difference between Gross Domestic Product (GDP) and Gross National Product (GNP) is
A. Capital gains
B.
Transfer payments
C.
Net foreign
income from abroad
D.
Capital
consumption allowance
Answer-C
59. The Community Development Programme was launched in the year
A. 1950
B.
1952
C.
1954
D.
1956
Answer-B
60. Which of the following is the most important domestic source of planned finance?
A. Additional taxation
B.
Domestic private
savings
C.
Profit from
public sector units
D.
Balance of
current revenue
Answer-B
A. Borrow foreign capital
42. National income refers to
A. Money value of stocks and shares of a country during a year
43. Why did the Government ban the import of “Terminator seeds”?
A. To contain a virus which can destroy local crops
44. Merchant Banking is an institution which provides finances to:
A. International trade among countries
45. Which amidst the following taxes collected by the Union is NOT mandated to be assigned to the States?
A. Service Tax
46. Inflation is caused by:
A. Increase in supply of goods
47. Open market operation refers to
A. Purchase and sale of Government securities by the R.B.I.
48. What is the main function of Central Statistical Organisation (CSO)?
A. Determination of money supply
49. What does National Income mean?
A. The total value of all consumer goods produced in the country during a period of one year
50. Which one of the following is not an industrial finance institution?
A. UTI
51. The largest source of revenue to the Union Government is
A. Central Excise Duty
52. Which bank in India performs duties of Central Bank?
A. State Bank of India
53. Which of the following is not the source of the revenue of central Government?
A. Income Tax
54. Which one of the following is not an objective of Fiscal Policy in India?
A. Price Stability
55. The best example of a capital intensive industry in India is
A. Steel Industry
56. Which one of the following is not included while estimating national income through income method?
A. Rent
57. Who advocated the adoption of ‘PURA’ model to eradicate rural poverty?
A. A.M. Khusro
58. The main difference between Gross Domestic Product (GDP) and Gross National Product (GNP) is
A. Capital gains
59. The Community Development Programme was launched in the year
A. 1950
60. Which of the following is the most important domestic source of planned finance?
A. Additional taxation
61.What is the name of the electronic
communication network of the Reserve Bank of India?
A.
BOLT
B.
RBISAT
C.
RBINET
D.
RBIDOT
Answer-C
62. Which authority decides about the States’ share in central taxes?
A. Finance Ministry
B.
Election
Commission
C.
Planning
Commission
D.
Finance Commission
Answer-D
63. Which of the following is has the sole right of issuing currency (except one rupee coins and notes) in India?
A. The Reserve Bank of India
B.
The State Bank of
India
C.
The Planning
Commission
D.
The Government of
India
Answer-A
64. RBI does not transact the business of which State Government?
A. Assam
B.
Bihar
C.
Jammu and Kashmir
D.
Nagaland
Answer-C
65. ICI is the name associated with
A. private sector bank
B.
Indian Cement
Industry
C.
Chamber of
Commerce and Industry
D.
A MNC which
manufactures chemicals
Answer-D
66. Reserve Bank of India was nationalized in
A. 1948
B.
1949
C.
1950
D.
1951
Answer-B
67. Per capita income is obtained by dividing National Income by
A. Area of the country
B.
Volume of capital
used
C.
Total working
population
D.
Total population
of the country
Answer-D
68. GDP at Factor Cost is
A. GDP minus indirect taxes plus subsidies
B.
GDP minus
subsidies plus indirect taxes
C.
NNP plus
depreciation allowances
D.
GDP minus
depreciation allowances
Answer-A
70. NREGP is the abbreviated form of
A. National Rapid Employment Guarantee Programme
B.
National Rapid
Educational Guarantee Programme
C.
National Rural
Employment Guarantee Programme
D.
National Rural
Educational Guarantee Programme
Answer-C
71. If Japan chooses to engage in trade, it
A. will only benefit if it trades with countries which produce goods it cannot produce.
B.
cannot benefit if
it trades with less developed countries.
C.
should first
attempt to produce the good itself.
D.
can benefit by
trading with any other country.
Answer-D
72. If the United States decides to trade with Mexico, we know that
A. Mexico will be better off, but trade with a less developed country could not help the United States.
B.
it will not
benefit Mexico because workers in the United States are more productive.
C.
Mexico and the
United States can both be better off.
D.
it will not
benefit either country because they are too different culturally.
Answer-C
73. If France is better than Belarus at producing wine, but Belarus is better than France at producing crystal,
A. Belarus should sell crystal to France, and should buy French wine.
B.
Belarus should
impose a tariff on French wine in order to protect jobs in the Belarusian
crystal industry.
C.
Belarus should
subsidize its wine industry so that it can compete with French wine.
D.
Belarus should
put a quota on the amount of French wine imported.
Answer-A
74. Which of the following is the best statement about markets?
A. Markets are usually a good way to organize economic activity.
B.
Markets are
usually inferior to central planning as a way to organize economic activity.
C.
Markets fail and
are therefore not an acceptable way to organize economic activity.
D.
Markets are a
good way to organize economic activity in developed nations, but not in less
developed nations.
Answer-A
75. Which would NOT be true in a market economy?
A. Firms decide whom to hire and what to produce.
B.
Government
policies do not affect the decisions of firms and households.
C.
Households decide
which firms to work for and what to buy with their incomes.
D.
Profit and
self-interest guide the decisions of firms and households.
Answer-B
76. The decisions of firms and households are guided by profit and self-interest in a
A. command economy.
B.
traditional
economy.
C.
market economy.
D.
All of the above
are correct.
Answer-C
77. In a market economy, economic activity is guided by
A. the government.
B.
corporations.
C.
central planners.
D.
prices.
Answer-D
78. The term used to describe a situation in which markets fail to allocate resources efficiently is called
A. economic meltdown.
B.
market failure.
C.
corporate
bankruptcy.
D.
disequilibrium.
Answer-B
79. In a market economy decisions are guided by individual self-interest. Hence, there is
A. still the ability to achieve desirable economic well-being for society as a whole.
B.
a strong need for
government intervention in the market.
C.
less efficiency
in market economies than in command economies.
D.
more need for a
strong legal system to control individual greed.
Answer-A
80. Prices direct economic activity in a market economy by
A. influencing the actions of buyers and sellers.
B.
reducing scarcity
of the goods and services produced.
C.
eliminating the
need for government intervention.
D.
allocating goods
and services produced in the most equitable way.
Answer-A
81. In a market economy, prices reflect the
A. value of a good to society.
B.
cost to society
of making the good.
C.
quantity society
will ultimately choose to produce.
D.
Both a and b are
correct.
Answer-D
Answer-C
62. Which authority decides about the States’ share in central taxes?
A. Finance Ministry
63. Which of the following is has the sole right of issuing currency (except one rupee coins and notes) in India?
A. The Reserve Bank of India
64. RBI does not transact the business of which State Government?
A. Assam
65. ICI is the name associated with
A. private sector bank
66. Reserve Bank of India was nationalized in
A. 1948
67. Per capita income is obtained by dividing National Income by
A. Area of the country
68. GDP at Factor Cost is
A. GDP minus indirect taxes plus subsidies
70. NREGP is the abbreviated form of
A. National Rapid Employment Guarantee Programme
71. If Japan chooses to engage in trade, it
A. will only benefit if it trades with countries which produce goods it cannot produce.
72. If the United States decides to trade with Mexico, we know that
A. Mexico will be better off, but trade with a less developed country could not help the United States.
73. If France is better than Belarus at producing wine, but Belarus is better than France at producing crystal,
A. Belarus should sell crystal to France, and should buy French wine.
74. Which of the following is the best statement about markets?
A. Markets are usually a good way to organize economic activity.
75. Which would NOT be true in a market economy?
A. Firms decide whom to hire and what to produce.
76. The decisions of firms and households are guided by profit and self-interest in a
A. command economy.
77. In a market economy, economic activity is guided by
A. the government.
78. The term used to describe a situation in which markets fail to allocate resources efficiently is called
A. economic meltdown.
79. In a market economy decisions are guided by individual self-interest. Hence, there is
A. still the ability to achieve desirable economic well-being for society as a whole.
80. Prices direct economic activity in a market economy by
A. influencing the actions of buyers and sellers.
81. In a market economy, prices reflect the
A. value of a good to society.
82. An example of market power is
A. a fast food restaurant in a college town.
B.
a wheat farmer in
Kansas.
C.
the last gas
station in New Mexico for 100 miles.
D.
a shoe store in
Kentucky.
Answer-C
83. An example of a firm with market power is a
A. deli in New York.
B.
cable TV provider
in St. Louis.
C.
clothing store in
Los Angeles.
D.
farmer in
Illinois.
Answer-B
84. One advantage market economies have over central planning is that market economies
A. provide an equal distribution of goods and services to consumers.
B.
establish
government economic control.
C.
solve the problem
of scarcity.
D.
are more
efficient.
Answer-D
85. A market economy differs from a communist economy in that economic decisions are made by
A. a central planner.
B.
millions of firms
and households.
C.
primarily the
government.
D.
large
corporations.
Answer-B
86. The collapse of communism in the Soviet Union and Eastern Europe took place in the
A. 1960s
B.
1970s
C.
1980s
D.
1990s
Answer-C
87. Prior to its collapse, communist countries worked on the premise that economic well-being could be organized only through/by
A. a market economy.
B.
government
central planners.
C.
government-imposed
private monopolies.
D.
increased
competition.
Answer-B
88. Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?
A. There is no such thing as a free lunch.
B.
People buy more
when prices are low than when prices are high.
C.
No matter how
much people earn, they tend to spend more than they earn.
D.
Households and
firms interacting in markets are guided by an “invisible hand” that leads them
to desirable market outcomes.
Answer-D
89. The term “invisible hand” was coined by
A. Adam Smith.
B.
David Ricardo.
C.
John Maynard
Keynes.
D.
Thomas Jefferson.
Answer-A
90. The “invisible hand” directs economic activity through
A. advertising.
B.
prices.
C.
central planning.
D.
government
regulations.
Answer-B
91. The invisible hand’s ability to coordinate the decisions of the firms and households in the economy can be hindered by
A. government actions that distort prices.
B.
increased
competition in the market.
C.
extended periods
of unemployment.
D.
a dramatic
reduction in consumer spending.
Answer-A
92. Adam Smith’s book The Wealth of Nations was published in
A. 1692.
B.
1776.
C.
1816.
D.
1936.
Answer-B
92. Both The Wealth of Nations and the Declaration of Independence share the point of view that
A. every person is entitled to life, liberty, and the pursuit of happiness.
B.
individuals are
best left to their own devices without the government guiding their actions.
C.
the government
has a central role in organizing a market economy.
D.
because of human
nature a strong legal system is necessary for a market system to survive.
Answer-B
93. President Gerald Ford referred to inflation as
A. the national thief.
B.
a blight on our
nation’s economy.
C.
public enemy
number one.
D.
a torpedo that
could sink our economy.
Answer-C
94. The person who referred to inflation as public enemy number one was
A. Gerald Ford.
B.
Alan Greenspan.
C.
Richard Nixon.
D.
John F. Kennedy.
Answer-A
95. In the 1990s, inflation in the United States
A. was almost zero.
B.
was about 3
percent per year.
C.
approached double
digits.
D.
was caused by too
much consumer spending.
Answer-B
96. Inflation causes
A. incomes to fall.
B.
productivity to
increase.
C.
the government to
lower taxes.
D.
the value of
money to fall.
Answer-D
97. Which of the following is the most correct statement about the relationship between inflation and unemployment?
A. In the short run, reducing inflation is associated with falling unemployment.
B.
In the short run,
reducing inflation is associated with rising unemployment.
C.
In the long run,
reducing inflation is associated with falling unemployment.
D.
In the long run,
reducing inflation is associated with rising unemployment.
Answer-B
98. The curve that illustrates the tradeoff between inflation and unemployment is called the
A. Laffer curve.
B.
Lorenz curve.
C.
Phillips curve.
D.
Demand curve.
Answer-C
99. In the short run, the Phillips curve illustrates
A. the tradeoff between inflation and unemployment.
B.
the tradeoff
between equity and efficiency.
C.
labor
productivity in an economy.
D.
the level of
government intervention in a market economy.
Answer-A
100. Although the Phillips curve is controversial, most economists believe that
A. society faces a tradeoff between unemployment and inflation in the short run only.
B.
society faces a
tradeoff between unemployment and inflation in the long run only.
C.
no tradeoff exists
between unemployment and inflation.
D.
society faces a
continuous tradeoff between unemployment and inflation.
Answer-A
A. a fast food restaurant in a college town.
83. An example of a firm with market power is a
A. deli in New York.
84. One advantage market economies have over central planning is that market economies
A. provide an equal distribution of goods and services to consumers.
85. A market economy differs from a communist economy in that economic decisions are made by
A. a central planner.
86. The collapse of communism in the Soviet Union and Eastern Europe took place in the
A. 1960s
87. Prior to its collapse, communist countries worked on the premise that economic well-being could be organized only through/by
A. a market economy.
88. Which of the following observations was made famous by Adam Smith in his book The Wealth of Nations?
A. There is no such thing as a free lunch.
89. The term “invisible hand” was coined by
A. Adam Smith.
90. The “invisible hand” directs economic activity through
A. advertising.
91. The invisible hand’s ability to coordinate the decisions of the firms and households in the economy can be hindered by
A. government actions that distort prices.
92. Adam Smith’s book The Wealth of Nations was published in
A. 1692.
92. Both The Wealth of Nations and the Declaration of Independence share the point of view that
A. every person is entitled to life, liberty, and the pursuit of happiness.
93. President Gerald Ford referred to inflation as
A. the national thief.
94. The person who referred to inflation as public enemy number one was
A. Gerald Ford.
95. In the 1990s, inflation in the United States
A. was almost zero.
96. Inflation causes
A. incomes to fall.
97. Which of the following is the most correct statement about the relationship between inflation and unemployment?
A. In the short run, reducing inflation is associated with falling unemployment.
98. The curve that illustrates the tradeoff between inflation and unemployment is called the
A. Laffer curve.
99. In the short run, the Phillips curve illustrates
A. the tradeoff between inflation and unemployment.
100. Although the Phillips curve is controversial, most economists believe that
A. society faces a tradeoff between unemployment and inflation in the short run only.
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