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 →
The Statutory Liquidity Ratio (SLR) mandates commercial banks to keep a specified percentage of their net demand and time liabilities in:
ALiquid assets like cash, gold, and approved government securities
BCash deposits with the central bank only
CForeign currency accounts
DCorporate stock equities
The Reverse Repo Rate is the rate of interest at which:
ACentral bank lends to commercial banks against collateral
BCommercial banks deposit surplus liquidity with the Central Bank
CCommercial banks lend to retail consumers
DGovernments issue short-term treasury bills
Call Money Market refers to the market for short-term interbank borrowing and lending for a duration of:
A15 days to 1 year
B5 years to 10 years
C1 day (overnight)
D30 days exactly
The Tax Multiplier for a balanced budget expansion (where government spending increase equals tax increase) is equal to:
AZero
BFive
CInfinity
DOne
Incidence of a tax refers to the:
AUltimate economic burden of the tax
BInitial legal liability to pay the tax
CCost of collecting the tax by authorities
DTax evasion rate
If demand for a good is perfectly inelastic, the entire economic burden of a specific sales tax falls on:
AThe producers/sellers
BThe consumers
CThe government treasury
DForeign exporters
The Peacock-Wiseman Hypothesis explains growth in public expenditure through periodic jumps called the:
ADemonstration Effect
BCrowding-out Effect
CDisplacement Effect
DPigou Effect
The Principle of Minimum Aggregate Sacrifice in taxation theory was advocated by Edgeworth to justify:
AFlat proportional taxation
BRegressive taxation
CIndirect sales taxation
DProgressive taxation
Under the Foreign Exchange Management Act (FEMA) framework, Current Account Convertibility refers to freedom to convert currency for:
AImport/export of goods, services, and remittance transactions
BPurchase of foreign real estate assets
CForeign stock market acquisitions
DLong-term sovereign debt buying
In the Cambridge Cash Balance Approach to money demand (M = kPY), ‘k’ represents:
AThe velocity of money circulation
BThe real interest rate
CThe fraction of nominal income individuals desire to hold as cash balances
DThe marginal propensity to consume