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 →
Which multiplier measures the change in national income resulting from an initial change in autonomous investment?
ATax Multiplier
BInvestment Multiplier
CMoney Multiplier
DBalanced Budget Multiplier
If Marginal Propensity to Consume (MPC) is 0.8, the value of the simple Keynesian investment multiplier is:
A4
B2
C5
D8
The IS curve in the IS-LM framework shows equilibrium in the:
AGoods and services market
BLabor market
CMoney market
DForeign exchange market
The LM curve in the IS-LM framework slopes upward because a higher level of income increases:
ASavings, lowering interest rates
BGovernment spending directly
CNet exports
DDemand for money, requiring higher interest rates to restore equilibrium
Frictional unemployment occurs when workers are:
AUnemployed due to seasonal weather patterns
BTemporarily between jobs or searching for a better job match
CUnemployed due to structural changes in technology
DLaid off during economic recessions
Under monopoly, the marginal revenue (MR) is:
AGreater than price
BEqual to price
CLess than price
DIndependent of price
The Kinked Demand Curve model of oligopoly explains:
APrice rigidity
BProfit maximization in perfect competition
CPrice flexibility
DMonopoly pricing power
What happens to consumer surplus when a government imposes an effective price ceiling below equilibrium?
ADeadweight loss is created and total economic surplus decreases
BProducer surplus increases
CEquilibrium quantity supplied increases
DConsumer surplus always increases overall
Opportunity cost is best defined as:
AThe monetary expenditure required to purchase a good
BThe value of the next best alternative foregone
CThe total cost of production minus variable costs
DThe accounting cost of fixed assets
Which market structure is characterized by product differentiation and many competing firms?
AMonopoly
BPerfect Competition
CMonopolistic Competition
DOligopoly