Economics
Economics MCQs with Answers and Explanations
Economics MCQs with answers and detailed explanations for CSS, PMS, lecturer and GAT tests. Micro, macro and Pakistan economy questions fully explained. Take a scored quiz instead →
According to Keynes, the precautionary motive for holding money depends primarily on:
AIncome levels
BStock market performance
CInterest rates
DInflation projections
The liquidity preference curve (demand for money) shifts rightward if there is an increase in:
AThe central bank discount rate
BCommercial bank reserve requirements
CThe general price level stability
DNominal income or total national output
The Accelerator Theory of investment posits that investment spending depends directly on the:
ALevel of interest rates
BRate of change in output or consumer demand
CCorporate tax rates
DSupply of bank credit
The High-Employment (Structural) Budget Deficit measures what the government budget deficit would be if:
AUnemployment were exactly zero
BThe economy were operating at potential full-employment GDP
CTax rates were doubled
DInflation were eliminated
The Real Business Cycle (RBC) theory asserts that economic fluctuations are primarily caused by:
AReal technology and supply-side productivity shocks
BChanges in government spending
CMonetary policy shocks
DFluctuations in consumer confidence
The Rational Expectations Hypothesis in macroeconomics was pioneered by:
AJohn Maynard Keynes
BMilton Friedman
CArthur Laffer
DRobert Lucas and Thomas Sargent
The third-degree price discrimination occurs when a firm charges different prices to different customer groups based on their:
ADifferences in price elasticity of demand
BVolume of purchases only
CExact individual reservation prices
DGeographic production location
According to the Lucas Critique, traditional macroeconomic evaluation of policy rules fails because:
AEconomic agents alter their expectations and behavior when policy rules change
BData collection is inherently inaccurate
CMonetary policy has no time lag
DFiscal multipliers are always constant
The Cournot model of duopoly assumes that each firm chooses its output level assuming that:
AThe rival firm keeps its quantity output constant
BThe rival firm keeps its price constant
CThe rival firm will match price cuts
DFirms collude explicitly
The Bertrand model of oligopoly differs from Cournot because firms compete primarily on:
APrice levels
BAdvertising expenditures
CQuantity output levels
DProduct quality differences