Macroeconomic Issues And Analysis MCQs

Option A: it allows countries to exploit their comparative advantage, more fully

Option B: firm could more readily exploit

Option C: economies of scal

Option D: it intensified competition

Correct Answer: it is easier to book holidays in member countries ✔

Option A: a nominal exchange rate, floated

Option B: a real exchange rate, pegged

Option C: a purchasing power parity, pegged

Option D: a real exchange rate, floated

Correct Answer: a nominal exchange rate, floated ✔

Option A: appreciate

Option B: depreciate

Option C: revalue

Option D: be in short supply

Correct Answer: depreciate ✔

Option A: depreciation

Option B: appreciation

Option C: fall

Option D: devaluation

Correct Answer: appreciation ✔

Option A: enhances

Option B: undermines

Option C: encourages

Option D: facilitates

Correct Answer: undermines ✔

Option A: increased

Option B: unaffected

Option C: reduced

Option D: None of these

Correct Answer: reduced ✔

Option A: current account

Option B: interest rate

Option C: tax

Option D: price

Correct Answer: interest rate ✔

Option A: increase

Option B: reduce

Option C: do nothing to

Option D: None of the above

Correct Answer: reduce ✔

Option A: reduce its stock of foreign assets

Option B: increase its stock of foreign assets

Option C: increases its savings

Option D: increases its foreign currency reserves

Correct Answer: reduce its stock of foreign assets ✔

Option A: rise

Option B: fall

Option C: not change

Option D: fluctuate

Correct Answer: fall ✔

Option A: falls; falls; falls; surplus

Option B: is static; low; rises; deficit

Option C: falls; rises; falls; surplus

Option D: rises; falls; rises; deficit

Correct Answer: falls; rises; falls; surplus ✔

Option A: falls; rise; falls; surplus

Option B: is static; low; rise; deficit;

Option C: falls; falls; falls; surplus

Option D: rise; falls; rises; deficit

Correct Answer: rise; falls; rises; deficit ✔

Option A: depreciate

Option B: not be affected

Option C: fluctuate more than it would do therwise

Option D: appreciate

Correct Answer: appreciate ✔

Option A: depreciate

Option B: not be affected

Option C: fluctuate more than it would do therwise

Option D: appreciate

Correct Answer: depreciate ✔

Option A: not be affected

Option B: fluctuate more than if exports were lower

Option C: depreciate

Option D: appreciate

Correct Answer: appreciate ✔

Option A: not be affected

Option B: appreciate

Option C: depreciate

Option D: fluctuate more than if interest rates were high

Correct Answer: depreciate ✔

Option A: exchange rate

Option B: balance of trade

Option C: terms of trade

Option D: currency validation

Correct Answer: exchange rate ✔

Option A: balance of payments

Option B: capital account of the balance of payments

Option C: financial account of the balance of payments

Option D: balance of payments on current account

Correct Answer: balance of payments ✔

Option A: balance of payments on current account

Option B: visible trade balance

Option C: balance of trade

Option D: balance of payments

Correct Answer: balance of payments on current account ✔

Option A: balance of trade:

Option B: balance of payments

Option C: balance of payments on current account

Option D: visible trade balance

Correct Answer: visible trade balance ✔

Option A: rise; rise

Option B: rise; fall

Option C: fall; fall

Option D: fall; rise

Correct Answer: rise; fall ✔

Option A: fiscal policies

Option B: monetary policies

Option C: supply-side policies

Option D: incomes policies

Correct Answer: monetary policies ✔

A. fiscal policies
B. monetary policies
C. supply-side policies
incomes policies

Correct Answer: supply-side policies ✔

Option A: real balance effect.

Option B: cash ratio.

Option C: money illusion.

Option D: menu costs of inflation.

Correct Answer: real balance effect. ✔

Option A: Regional

Option B: structural

Option C: seasonal

Option D: demand-deficient

Correct Answer: seasonal ✔

Option A: Frictional

Option B: natural

Option C: real-wage

Option D: disequilibrium

Correct Answer: Frictional ✔

Option A: of products produced by a given industry.

Option B: produced by the government

Option C: of labour supplied by all households

Option D: of goods and services produced in an economy.

Correct Answer: of goods and services produced in an economy. ✔

Option A: Portion of unemployment that is due to the normal working of the labour market

Option B: Portion of unemployment that is due to changes in the structure of the economy that results in a significant loss of jobs in certain industries.

Option C: Unemployment that results when people become discouraged about their chances of finding a job so they stop looking for work.

Option D: Unemployment that occurs during recessions and depressions.

Correct Answer: Unemployment that occurs during recessions and depressions. ✔

Option A: a discouraged worker:

Option B: unemployed.

Option C: hard core unemployed.

Option D: unemployable

Correct Answer: a discouraged worker: ✔

Option A: Those who could claim benefit if they were to become unemployed.

Option B: The population between school leaving age and retirement age.

Option C: anyone who is working or actively seeking work

Option D: Those of working age who are seeking work and are available to for work at current wage rates.

Correct Answer: Those of working age who are seeking work and are available to for work at current wage rates. ✔

Option A: Normative economics

Option B: Positive economics

Option C: Objective economics

Option D: Reality economics

Correct Answer: Objective economics ✔

Option A: Lower interest rates

Option B: Lower taxation rates

Option C: Lower government spending

Option D: Lower inflation

Correct Answer: Lower interest rates ✔

Option A: Pay rates within the private sector

Option B: pay rates in the public sector

Option C: investment in education

Option D: Benefits available for the unemployed and sick

Correct Answer: Pay rates within the private sector ✔

Option A: Spending on health

Option B: Spending on defence

Option C: Firms investment decisions

Option D: Spending on education

Correct Answer: Firms investment decisions ✔

Option A: A policy

Option B: A way of reaching a target

Option C: A target

Option D: A strategy

Correct Answer: A strategy ✔

Option A: interest rate adjustment

Option B: central bank intervention in the Forex

Option C: domestic wage and price adjustment

Option D: devaluation

Correct Answer: domestic wage and price adjustment ✔

Option A: low inflation

Option B: low interest rates

Option C: stable nominal exchange rates

Option D: budget deficits and government debt under control

Correct Answer: all of the above ✔

Option A: permanently fixed capital movements floating exchange rates a fixed structure of interest rates

Option B: permanently fixed exchange rates, free capital movements, a single interest rates

Option C: a common currency a single central bank, common monetary policy

Option D: a common currency floating exchange rates common monetary policy

Correct Answer: permanently fixed exchange rates, free capital movements, a single interest rates ✔

Option A: European union, single market

Option B: Western European, single currency area

Option C: European Union, single currency area

Option D: Western European, single market

Correct Answer: European union, single market ✔

Option A: The ECU

Option B: currency swap agreement between member

Option C: the exchange rate mechanism

Option D: all of the above

Correct Answer: all of the above ✔

Option A: crowds out imports

Option B: crowds out public consumption

Option C: crowds out exports

Option D: reduces the budget deficit

Correct Answer: crowds out exports ✔

Option A: stable

Option B: predictable

Option C: volatile

Option D: depreciating

Correct Answer: volatile ✔

Option A: interest rates

Option B: competitiveness

Option C: trade

Option D: speculation

Correct Answer: speculation ✔

Option A: higher import prices, higher wages increases

Option B: lower export prices, lower imports volumes

Option C: higher import prices, lower export prices

Option D: higher wage increases lower import volumes

Correct Answer: higher import prices, higher wages increases ✔

Option A: money supply targets

Option B: income policy

Option C: interest rates

Option D: inflation targets

Correct Answer: interest rates ✔

Option A: buy foreign exchange, sell domestic currency

Option B: sell foreign exchange buy domestic currency

Option C: buy foreign exchange buy domestic currency

Option D: sell foreign exchange sell domestic currency

Correct Answer: sell foreign exchange buy domestic currency ✔

Option A: Price difference

Option B: balance of payments difference

Option C: current account differences

Option D: expected exchange rate changes

Correct Answer: expected exchange rate changes ✔

Option A: exports

Option B: taxes

Option C: inventories

Option D: imports

Correct Answer: taxes ✔

Option A: deficit

Option B: surplus

Option C: revaluation

Option D: devaluation

Correct Answer: surplus ✔

Option A: selling, increase

Option B: buying reduce

Option C: selling, reduce

Option D: buying increase

Correct Answer: F. C and D ✔

Option A: depreciates, appreciates

Option B: revalues, devalues

Option C: appreciates, depreciates

Option D: becomes more expensive becomes cheaper

Correct Answer: appreciates, depreciates ✔

Option A: falls; falls; falls; surplus

Option B: falls; rises; falls; surplus

Option C: is static; low; rises; deficit

Option D: rises; falls; rises; deficit

Correct Answer: falls; falls; falls; surplus ✔

Option A: rise; falls; rise; deficit

Option B: falls; rises; falls; surplus

Option C: falls; falls; falls; surplus

Option D: is static; low; rises; deficit

Correct Answer: is static; low; rises; deficit ✔

Option A: fluctuate more than it would do otherwise

Option B: appreciate

Option C: depreciate

Option D: not be affected

Correct Answer: depreciate ✔

Option A: fluctuate more than it would do otherwise

Option B: appreciate

Option C: depreciate

Option D: not be affected

Correct Answer: depreciate ✔

Option A: depreciate

Option B: not be affected

Option C: fluctuate more than if it were at peace

Option D: appreciate

Correct Answer: depreciate ✔

Option A: will remain the same

Option B: will decrease

Option C: will increase

Option D: could either increase of decrease

Correct Answer: will increase ✔

Option A: a recession

Option B: a trade surplus

Option C: a trade deficit

Option D: an expansion.

Correct Answer: a trade deficit ✔

Option A: financial account on the balance of payments.

Option B: balance of payments

Option C: balance of payments on current account

Option D: capital account of the balance of payments

Correct Answer: financial account on the balance of payments. ✔

Option A: visible trade balance

Option B: balance of trade

Option C: balance of payments on current account

Option D: balance of payments.

Correct Answer: balance of trade ✔

Option A: free-trade

Option B: autarkic

Option C: open

Option D: mixed

Correct Answer: open ✔

Option A: rise, fall

Option B: rise; rise

Option C: fall; fall

Option D: fall; rise

Correct Answer: rise, fall ✔

Option A: fiscal policies

Option B: incomes policies

Option C: supply-side policies

Option D: monetary policies

Correct Answer: fiscal policies ✔

Option A: real balance effect

Option B: menu costs of inflation

Option C: money illusion.

Option D: cost-push inflation.

Correct Answer: menu costs of inflation ✔

Option A: ratio of the frictional unemployment rate to the cyclical unemployment rate.

Option B: Sum of structural unemployment and cyclical unemployment.

Option C: Sum of frictional unemployment and cyclical unemployment

Option D: sum of frictional unemployment and structural unemployment.

Correct Answer: sum of frictional unemployment and structural unemployment. ✔

Option A: regional

Option B: technological

Option C: structural

Option D: demand-deficient

Correct Answer: structural ✔

Option A: natural

Option B: frictional

Option C: disequilibrium

Option D: structural

Correct Answer: disequilibrium ✔

Option A: the household and government sectors

Option B: the household sector.

Option C: all sectors of except the rest of the world

Option D: all sectors of the economy including the rest of the world.

Correct Answer: all sectors of the economy including the rest of the world. ✔

Option A: not change the unemployment rate

Option B: decrease the unemployment rate

Option C: increase the unemployment rate

Option D: have an indeterminate impact on the unemployment rate

Correct Answer: increase the unemployment rate ✔

Option A: a labour force survey.

Option B: the number out of work and claiming benefit

Option C: the percentage of the labour force not in work

Option D: the ILO/OECD standardised unemployment measurement

Correct Answer: the ILO/OECD standardised unemployment measurement ✔

Option A: Unemployment population ratio.

Option B: Unemployment rate

Option C: employment rate

Option D: Labour force rate.

Correct Answer: Unemployment rate ✔

Option A: Increasing employment

Option B: Increasing economic growth

Option C: Increasing government spending

Option D: Increasing the level of exports

Correct Answer: Increasing employment ✔

Option A: lower interest rates

Option B: A better balance of trade position

Option C: Faster economic growth

Option D: Lower unemployment

Correct Answer: Lower unemployment ✔

Option A: Unemployment

Option B: Inflation

Option C: The wages paid to footballers

Option D: Economic growth

Correct Answer: Economic growth ✔

Option A: Income tax

Option B: National insurance

Option C: VAT

Option D: Interest insurance

Correct Answer: Income tax ✔

Option A: The price of houses in karachi

Option B: The wage rate for plumbers in Islamabad

Option C: Your decision to work or stay at home

Option D: The level of unemployment is pakistan

Correct Answer: Your decision to work or stay at home ✔