Economics MCQs

Option A: the monarchy

Option B: the central planners of the Soviet Union

Option C: the capitalist and middle class

Option D: the aristocrats of wealthy nations

Correct Answer: the capitalist and middle class ✔

Option A: total market reliance for resource allocation

Option B: economic restructuring by Gorbachev

Option C: intensified central planning

Option D: None of the above

Correct Answer: economic restructuring by Gorbachev ✔

Option A: low interest rates

Option B: political instability inhibits world-wide investment

Option C: human capital or technical skills were lacking

Option D: real domestic currency depreciation exists

Correct Answer: human capital or technical skills were lacking ✔

Option A: diverting savings from agriculture to industry

Option B: state assisted entrepreneurs

Option C: state monopolized trading

Option D: markets for allocating resources

Correct Answer: markets for allocating resources ✔

Option A: Japan

Option B: Four tigers

Option C: Vietnam

Option D: Thailand

Correct Answer: Vietnam ✔

Option A: South Korea

Option B: China

Option C: Taiwan

Option D: Singapore

Correct Answer: China ✔

Option A: declined

Option B: increased

Option C: remained the same

Option D: cannot be determined

Correct Answer: increased ✔

Option A: debt rescheduling agreement

Option B: debt service agreement

Option C: program for growth

Option D: stabilization program

Correct Answer: debt rescheduling agreement ✔

Option A: changes in industrial structure over time

Option B: specific barriers to development and how to overcome them

Option C: The impact of international trade structures on developing countries

Option D: the caste of class structure and discrimination in the labor market

Correct Answer: specific barriers to development and how to overcome them ✔

Option A: Food shortages

Option B: Foreign debt

Option C: Rapid population growth

Option D: Labor shortages

Correct Answer: Labor shortages ✔

Option A: mechanization

Option B: land reform

Option C: import substitution

Option D: produce marketing boards

Correct Answer: land reform ✔

Option A: Successful agricultural projects produce surplus food to support urban development

Option B: agricultural investment will prevent the flight of capital abroad

Option C: agricultural projects usually have low import requirements

Option D: export prices for agricultural products are more stable than those for industrial products

Correct Answer: agricultural projects usually have low import requirements ✔

Option A: The constraints imposed by dependency on the already-developed nations

Option B: A steady rate of capital formation

Option C: An adequate level of social overhead capital

Option D: The supply of human resources is too high

Correct Answer: The constraints imposed by dependency on the already-developed nations ✔

Option A: the prices of the goods they imported were falling

Option B: the price of goods they exported were increasing

Option C: their terms of trade were deteriorating

Option D: their terms of trade were improving

Correct Answer: their terms of trade were deteriorating ✔

Option A: 80%

Option B: 65%

Option C: 50%

Option D: 25%

Correct Answer: 80% ✔

Option A: a lower rate of illiteracy

Option B: a greater degree of equality in the income distribution

Option C: a lower infant mortality rate

Option D: a smaller percentage of the labor force in urban areas

Correct Answer: a smaller percentage of the labor force in urban areas ✔

Option A: money lent to the country being immediately invested abroad

Option B: People investing their money in urban business rather than agriculture

Option C: money moving around financial institutions rather than being invested in production

Option D: people investing money abroad rather than in their own country

Correct Answer: people investing money abroad rather than in their own country ✔

Option A: an agreement with the World Bank to turn some of a debt into other forms

Option B: a change in debt repayment due to inability to pay

Option C: regular payments of interest and repayments of capital

Option D: a program of austerity measures agreed with the IMF to make repayment possible

Correct Answer: a change in debt repayment due to inability to pay ✔

Option A: The colonial period

Option B: The early 1950s

Option C: most debt was incurred during the oil shocks of the 1970s

Option D: the early 1960s

Correct Answer: most debt was incurred during the oil shocks of the 1970s ✔

Option A: modern sector and traditional sector

Option B: town and country

Option C: men and women

Option D: rich people and poor people

Correct Answer: modern sector and traditional sector ✔

Option A: encourages mechanization

Option B: allows the farmers to set the prices for their agricultural products

Option C: enables farmers to escape the problem of diminishing return

Option D: makes farmers owners of the land instead of tenants and owners’ farmers are more productive than tenant farmers

Correct Answer: makes farmers owners of the land instead of tenants and owners’ farmers are more productive than tenant farmers ✔

Option A: shortages of inputs including land

Option B: an over-investment in farm equipment

Option C: migration from rural areas to urban areas

Option D: a lack of effective demand for food products

Correct Answer: shortages of inputs including land ✔

Option A: stress agricultural development over industrial development

Option B: promote industrial development over agriculture

Option C: use a balanced strategy that promotes both agricultural and industrial development

Option D: stress the importation of agricultural products and the export of manufactured goods

Correct Answer: use a balanced strategy that promotes both agricultural and industrial development ✔

Option A: the vicious circle of poverty hypothesis

Option B: the dependency theory

Option C: neo-colonialism

Option D: the under-consumptionist hypothesis

Correct Answer: the vicious circle of poverty hypothesis ✔

Option A: export promotion

Option B: industrial promotion

Option C: import substitution

Option D: unbalanced growth

Correct Answer: import substitution ✔

Option A: 40%

Option B: 10%

Option C: 20%

Option D: 30%

Correct Answer: 20% ✔

Option A: the newly industrialized countries like Korea, Taiwan Malaysia

Option B: The republics of the former Soviet Union

Option C: Countries that still have a communist government like China and Cuba

Option D: countries that have fallen far behind the economic advances of the rest of the world

Correct Answer: countries that have fallen far behind the economic advances of the rest of the world ✔

Option A: the newly industrialized countries like Korea, Taiwan Malaysia

Option B: The republics of the former Soviet Union

Option C: Countries that still have a communist government like China and Cuba

Option D: countries that have fallen far behind the economic advances of the rest of the world

Correct Answer: countries that have fallen far behind the economic advances of the rest of the world ✔

Option A: The brain drain

Option B: human capital deterioration

Option C: productivity

Option D: labor degradation

Correct Answer: The brain drain ✔

Option A: natural resources

Option B: body of knowledge

Option C: land

Option D: quantity of labor

Correct Answer: body of knowledge ✔

Option A: Public expenditure per student for higher education is about ten times as high as for primary education

Option B: The expansion of primary education redistributes benefits from the rich to the poor

Option C: Economists unanimously agree that LDCs should put greater priority on primary education

Option D: Boys are sent to schools far more often than girls

Correct Answer: Economists unanimously agree that LDCs should put greater priority on primary education ✔

Option A: About 18 percent of the world’s deaths are among children less than five years old

Option B: More than 98 percent of child deaths were in LDCs

Option C: World-wide child mortality rates increased from 1990 to 2002

Option D: 19 of the 20 countries with the highest child mortality were in Africa

Correct Answer: World-wide child mortality rates increased from 1990 to 2002 ✔

Option A: 17 million, 7 million

Option B: 7 million, 0.7 million

Option C: 3 million, 1 million

Option D: 0.5 million, 5 million

Correct Answer: 17 million, 7 million ✔

Option A: due to a lack of education

Option B: a class system in which the elite are contemptuous of manual work

Option C: upper-and middle-class westerners

Option D: The lack of bargaining power y cheap labor

Correct Answer: a class system in which the elite are contemptuous of manual work ✔

Option A: The amount of brain drain

Option B: Marginal utility

Option C: Marginal Product

Option D: The substitutability of labor to capital

Correct Answer: Marginal Product ✔

Option A: 30 to 40 years, about the same as in 1995

Option B: 30 to 40 years, a fall of more than 10 years from 1995

Option C: 50 to 60 years, about the same as in 1995

Option D: 70 years, an increase from 1995

Correct Answer: 30 to 40 years, a fall of more than 10 years from 1995 ✔

Option A: Development generally improves the health system while better health increases productivity social cohesion, and economic welfare

Option B: Life expectancy is probably the best single indicator of national health levels

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

Option D: There are growing inequalities in investment in health worldwide

Correct Answer: Life expectancy in Africa increased steadily from 1994 to 2003 due to better health care ✔

Option A: high formal education and training

Option B: better health and physical condition of the labor force

Option C: Both a and b are correct

Option D: None of the above is correct

Correct Answer: Both a and b are correct ✔

Option A: I and II only

Option B: III and IV only

Option C: I, II and III only

Option D: I, II , III and IV

Correct Answer: I and II only ✔

Option A: mortality-adjusted lifelong

Option B: premature living age

Option C: life mortality-fertility ratio

Option D: disability-adjusted life years

Correct Answer: disability-adjusted life years ✔

Option A: individuals pay the full cost of their education

Option B: government subsidizes schooling

Option C: education persons migrate more

Option D: capital and unskilled labor are complements

Correct Answer: individuals pay the full cost of their education ✔

Option A: 60 million

Option B: 10 million

Option C: 3 million

Option D: million

Correct Answer: 3 million ✔

Option A: an elastic good

Option B: an inferior good

Option C: a normal good

Option D: a luxury good

Correct Answer: an inferior good ✔

Option A: price inelastic

Option B: none of these

Option C: unit price elastic

Option D: price elastic

Correct Answer: price elastic ✔

Option A: increase total revenue to farmers as a whole because the demand for food is elastic

Option B: increase total revenue to farmers as whole because the demand for food is inelastic

Option C: reduce total revenue to farmers as a whole because the demand for food is elastic

Option D: reduce total revenue to farmers as a whole because the demand for food is inelastic

Correct Answer: reduce total revenue to farmers as a whole because the demand for food is inelastic ✔

Option A: demand is price inelastic

Option B: supply is price elastic

Option C: supply is price inelastic

Option D: demand is price elastic

Correct Answer: demand is price inelastic ✔

Option A: the quantity supplied is sensitive to changes in the price of that good

Option B: That quantity demanded is insensitive to changes in the price of that good

Option C: the quantity demanded is sensitive to changes in the price of that good

Option D: the quantity supplied is incentive to changes in the price of that good

Correct Answer: the quantity supplied is sensitive to changes in the price of that good ✔

Option A: transportation

Option B: taxi rides

Option C: bus tickets

Option D: airline tickets

Correct Answer: transportation ✔

Option A: price elastic

Option B: none of these answers

Option C: unit price elastic

Option D: price inelastic

Correct Answer: price inelastic ✔

Option A: the percentage change in the quantity demanded divided by the percentage change in income.

Option B: the percentage change in income divided by the percentage change in the quantity demanded

Option C: the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good

Option D: none of these answers

Correct Answer: the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good ✔

Option A: Supply would tend to be price elastic

Option B: none of these answers

Option C: demand would tend to be price inelastic

Option D: demand would tend to be price elastic

Correct Answer: demand would tend to be price inelastic ✔

Option A: elastic in the upper portion and inelastic in the lower portion

Option B: inelastic in the upper portion and elastic in the lower portion

Option C: inelastic throughout

Option D: constant along the demand curve

Correct Answer: elastic in the upper portion and inelastic in the lower portion ✔

Option A: Rs 0 per month

Option B: Rs 30 per month

Option C: Rs 40 per month

Option D: Either Rs 30 or Rs 40 per month because the price elasticity of demand is 1.0

Correct Answer: Rs 30 per month ✔

Option A: 1.4

Option B: 0.66

Option C: 0.75

Option D: 2.0

Correct Answer: 1.4 ✔

Option A: infinite

Option B: Zero

Option C: less than 1

Option D: none of these

Correct Answer: less than 1 ✔

Option A: 1.50

Option B: 1.15

Option C: none of these

Option D: 0.15

Correct Answer: 1.00 ✔

Option A: all of these answers

Option B: price inelastic

Option C: unit price elastic

Option D: price elastic

Correct Answer: unit price elastic ✔

Option A: zero

Option B: infinite

Option C: one

Option D: unable to be determined form this information

Correct Answer: zero ✔

Option A: substitutes

Option B: complements

Option C: necessities

Option D: luxuries

Correct Answer: complements ✔

Option A: The good is luxury

Option B: There are a great number of substitutes for the good

Option C: The good is a necessity

Option D: The good is an inferior good

Correct Answer: The good is a necessity ✔

Option A: price elastic

Option B: unit price elastic

Option C: none of these answers

Option D: price inelastic

Correct Answer: price elastic ✔

Option A: income inelastic

Option B: price inelastic

Option C: price elastic

Option D: unit price elastic

Correct Answer: price elastic ✔

Option A: decrease aggregate demand

Option B: reduce tax rates or lower interest rates

Option C: decrease government spending

Option D: decrease private consumption and investment

Correct Answer: decrease private consumption and investment ✔

Option A: Migration to the cities is a larger contributor than natural population growth to urban labor growth is sub Saharan Africa

Option B: In Latin America natural population increase is the major source of urban growth

Option C: From 1975 to 2000 the number of cities in LDC with populations over 1 million increased from 20 to 50

Option D: The urban share of total LDC population grew from 27 percent in 1975 and 35 percent in 1992 to 40 percent in 2003

Correct Answer: In Latin America natural population increase is the major source of urban growth ✔

Option A: marginal rate of substitution

Option B: labor force literacy

Option C: substitution of leisure and work among labor

Option D: limited technical sustainability of factors

Correct Answer: limited technical sustainability of factors ✔

Option A: are workers who are compelled to work short hours

Option B: result from an inadequate use of workers capacities

Option C: are part-time workers who voluntarily work short hours

Option D: None of the above is correct

Correct Answer: result from an inadequate use of workers capacities ✔

Option A: The unemployment rate for youths is twice that of people over 24

Option B: Unemployment in rural areas is twice that of urban areas

Option C: World-wide there are fewer unemployed females than males, but the rate is higher for women

Option D: The unemployed are relatively well educated

Correct Answer: World-wide there are fewer unemployed females than males, but the rate is higher for women ✔

Option A: persons 15 to 24 years old

Option B: the educated

Option C: residents of urban areas

Option D: from the poorest 1/5 of the population

Correct Answer: from the poorest 1/5 of the population ✔

Option A: plant and equipment

Option B: buildings

Option C: inventories

Option D: consumers goods

Correct Answer: consumers goods ✔

Option A: technique to manage raw materials efficiently

Option B: residual of a production function

Option C: resource coordinating other productive resources

Option D: blueprint on how to manage the labor force

Correct Answer: resource coordinating other productive resources ✔

Option A: I and II only

Option B: III and IV only

Option C: I, II and III only

Option D: I, II and IV only

Correct Answer: I and II only ✔

Option A: I and II only

Option B: II and III only

Option C: I, II and III only

Option D: I, II, III and IV

Correct Answer: I, II, III and IV ✔

Option A: That people migrate when urban wages exceed rural wages

Option B: a higher expected income in urban areas

Option C: better infrastructure in urban areas

Option D: the availability of labor-intensive jobs in urban areas

Correct Answer: a higher expected income in urban areas ✔

Option A: is insufficient for solving the urban unemployment problem

Option B: will generate capital-intensive technologies

Option C: will generate more government revenue through urban wages

Option D: induces government to increase minimum wages

Correct Answer: will generate capital-intensive technologies ✔

Option A: when marginal revenue productivity of labor is zero

Option B: the same as seasonal unemployment of LDC agricultural

Option C: the rigid factor proportions in LDC agriculture and industry

Option D: due to capital formation and the level of technology remaining constant.

Correct Answer: when marginal revenue productivity of labor is zero ✔

Option A: disguised unemployed

Option B: cyclical unemployed

Option C: seasonally unemployed

Option D: voluntarily unemployed

Correct Answer: disguised unemployed ✔

Option A: employed plus unemployed divided by labor force

Option B: total employment divided by population

Option C: labor force divided by population

Option D: unemployed divided by employed

Correct Answer: employed plus unemployed divided by labor force ✔

Option A: fertility

Option B: population quality

Option C: mortality

Option D: morbidity

Correct Answer: population quality ✔

Option A: national product

Option B: capital

Option C: natural resources

Option D: prevailing technology

Correct Answer: national product ✔

Option A: shows the dependency output of the working population

Option B: depicts the relationship between input and output

Option C: states the relationship between products and income distribution

Option D: is a function of natural resources in a country

Correct Answer: depicts the relationship between input and output ✔

Option A: There are more women than men in U.S business because of the aspirations of U.S girls

Option B: There are relatively few women in U.S business partly because of female socialization

Option C: LDC businesswomen have a better chance than men of getting credit from bankers and suppliers

Option D: Businesswomen in India are viewed as naturally stronger, less emotional more socially adept and more rational than businessmen

Correct Answer: There are relatively few women in U.S business partly because of female socialization ✔

Option A: Protestants disapproved of accumulating wealth

Option B: Protestants failed to restrict extravagance and conspicuous consumption

Option C: Roman Catholicism expressed its asceticism in a secular vocation

Option D: capitalism was most advanced in Protestant countries

Correct Answer: capitalism was most advanced in Protestant countries ✔

Option A: Adam Smith

Option B: Max Weber

Option C: Joseph Schumpeter

Option D: William Baumol

Correct Answer: Max Weber ✔

I- coordinator of other production resources
II- decision maker under uncertainty
III- innovator
IV- gap filler and input completer

1. I and II only
2. II and III only
3. I, II and only
4. I, II, III and IV

Correct Answer: 4. I, II, III and IV ✔

Option A: oligopolistic capitalism

Option B: resource management

Option C: innovation

Option D: land and labor

Correct Answer: innovation ✔

Option A: An existing internet provider provides competition to two other providers in Dayton Ohlio

Option B: The production and marketing of the Model T Ford in the 19-teens

Option C: The invention of the Stanley steamer

Option D: An American buying a stock in the Philippines stock market

Correct Answer: The production and marketing of the Model T Ford in the 19-teens ✔

Option A: I and II only

Option B: II and III only

Option C: III and IV only

Option D: I and IV only

Correct Answer: II and III only ✔

Option A: I and II only

Option B: II and III only

Option C: I, II and III only

Option D: I, II, III, and IV

Correct Answer: I and II only ✔

Option A: based on government intervention in the means of production

Option B: that originated in the United States in the 19th Century

Option C: Where private owners of capital make decisions based on profit

Option D: that dominated developing economies in the 19 Century

Correct Answer: Where private owners of capital make decisions based on profit ✔

Option A: created stationary economies of scale

Option B: maintained the relationship between firms and their clients

Option C: replaced price as the important

Option D: limited the expansion of firms

Correct Answer: replaced price as the important ✔

Option A: the development of pure science, invention innovation financing the innovation and the innovation’s acceptance

Option B: introducing new products modifying production functions creating credit and making profits

Option C: innovation investment credit creation and economies growth

Option D: patent management resource gains mature innovation and speculative gains

Correct Answer: A. the development of pure science, invention innovation financing the innovation and the innovation’s acceptance ✔

Option A: Perfect competition

Option B: An economy below full employment

Option C: No savings or technical change

Option D: No entrepreneurial function is required

Correct Answer: An economy below full employment ✔

Option A: depreciation generally improves the trade balance

Option B: depreciation generally hurts the trade balance

Option C: no strong generalization is possible

Option D: depreciation has no effect on the trade balance

Correct Answer: no strong generalization is possible ✔

Option A: pass through

Option B: absorption

Option C: adjustment mechanism

Option D: currency contract period

Correct Answer: pass through ✔

Option A: sooner

Option B: longer

Option C: bigger

Option D: smaller

Correct Answer: sooner ✔

Option A: improves

Option B: worsens

Option C: is unaffected

Option D: falls for a while before increasing

Correct Answer: is unaffected ✔

Option A: should increase the dollar value of exports

Option B: should not have any effect on the dollar value of U.S imports

Option C: must increase the balance of trade

Option D: All of the above

Correct Answer: All of the above ✔

Option A: import prices to fall by 10 percent

Option B: import prices to rise by 10 percent

Option C: export prices to rise by 10 percent

Option D: export prices to fall by 10 percent

Correct Answer: import prices to rise by 10 percent ✔

Option A: appreciation in the value of both currencies

Option B: depreciation in the value of both currencies

Option C: appreciation in the value of the yen against the mark

Option D: depreciation in the value of the yen against the mark

Correct Answer: depreciation in the value of the yen against the mark ✔

Option A: shorten the amount of time in which the depreciation leads to smaller trade deficit

Option B: shorten the amount of time in which the depreciation leads to smaller trade surplus

Option C: lengthen the amount of time in which the depreciation leads to smaller trade deficit

Option D: lengthen the amount of time in which the depreciation leads to smaller trade surplus

Correct Answer: lengthen the amount of time in which the depreciation leads to smaller trade deficit ✔