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 →
A Treasury Bill (T-Bill) is a money market instrument issued by the government that is characterized as a:
AHigh-coupon long-term bond
BDividend paying equity stock
CForeign currency debt
DZero-coupon discount security (issued at discount and redeemed at par value)
The Fisher Effect predicts that a 1% increase in expected inflation will lead to a 1% increase in the:
ANominal Interest Rate
BReal Interest Rate
CReal GDP Growth Rate
DTax Revenue Rate
In Islamic Banking, ‘Mudarabah’ is best defined as a financial partnership where:
ABoth parties contribute capital and share profits and losses equally
BOne party provides capital (Rab-ul-Mal) and the other provides management/expertise (Mudarib)
CA bank purchases goods and resells them at a cost-plus profit margin
DFunds are held in pure trust without profit allocation
Capital Account Convertibility refers to the freedom to convert local currency into foreign assets for:
AMerchandise import purchases only
BFinancial investments, capital movements, and asset ownership
CTourist expenditures abroad only
DDiplomatic payments
The Feldman-Mahalanobis Growth Model used in national planning prioritized heavy capital goods investment to:
AMaximize short-run consumer goods imports
BAbolish public sector ownership
CAccelerate long-term economic growth and self-reliance in industrial capital
DFocus exclusively on agriculture
The Kuznets Curve (inverted U-curve) hypothesis suggests that as economic development proceeds, income inequality:
AContinuously decreases from the start
BContinuously increases without limit
CRemains completely unchanged
DInitially increases, reaches a peak, and then decreases
The Environmental Kuznets Curve posits an inverted U-shaped relationship between per capita income and:
AEnvironmental degradation / pollution levels
BPopulation growth rate
CTax revenue collection
DForeign debt obligations
The Genuine Progress Indicator (GPI) improves upon standard GDP by incorporating:
AStock market market capitalization
BEnvironmental damage, pollution costs, and social inequality factors
CMilitary defense expenditures
DForeign reserve accumulation
In input-output analysis developed by Wassily Leontief, the Hawkins-Simon Conditions guarantee that:
APrices will remain constant during inflation
BExports will always equal imports
CThe production system can yield positive net outputs of all goods
DCapital-labor ratio remains fixed
The Terms of Trade definition (Px / Pm) is specifically referred to as the:
AGross Terms of Trade
BIncome Terms of Trade
CSingle Factoral Terms of Trade
DNet Barter (or Commodity) Terms of Trade