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Economics Mcqs 4423 MCQs [All-Courses]

Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?

A The aggregate supply curve shifts to the right by more than Rs 16 billion

B The aggregate demand curve shifts to the left by more than Rs 16 billion

C The aggregate demand curve shifts to the right by more than Rs 16 billion

D the aggregate supply curve shifts to the left by more than Rs 16 billion

Review Detailed Answer

Correct Answer: The aggregate demand curve shifts to the right by more than Rs 16 billion

When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?

A supply-side economics

B None of these answers

C The crowding-out effect

D The multiplier effects

Review Detailed Answer

Correct Answer: The crowding-out effect

An increase in the marginal propensity to consumer (MPC) ?

A raises the value of the multiplier

B has no impact on the value of the multiplier?

C rarely occurs because the MPC is set by congressional legislation

D lowers the value of the multiplier

Review Detailed Answer

Correct Answer: raises the value of the multiplier

The initial impact of an increase in government spending is to shift ?

A aggregate demand to the right

B aggregate demand to the left

C aggregate supply to the right

D aggregate supply to the left

Review Detailed Answer

Correct Answer: aggregate demand to the right

The initial effect of an increase in the money supply is to ?

A increase the interest rate

B increase the price level

C decrease the price level

D decrease the interest rate

Review Detailed Answer

Correct Answer: increase the price level

When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ?

A None of these answers

B decrease the quantity demanded of money

C increase the quantity demanded of money

D decreases the demand for money

Review Detailed Answer

Correct Answer: decrease the quantity demanded of money

Which of the following best describes how an increase in the money supply shift the aggregate demand curve ?

A The money supply shifts right prices fall spending increases and the aggregate demand curve shifts right

B The money supply shifts right the interest rate rises investment decreases and the aggregate demand curve shifts left

C The money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right

D The money supply shifts right, prices rise, demand curve shifts left

Review Detailed Answer

Correct Answer: The money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right

Which of the following statements about stabilization policy is not true ?

A Many economists prefer automatic stabilizers because they affect the economy with a shorter lag than activist stabilization policy

B None of these answers are true

C Long lags enhance the ability of policy makers to fine tune the economy

D When policy makers implement activist stabilization policies there is a significant risk that their policies may actually have a destabilizing effect

Review Detailed Answer

Correct Answer: Long lags enhance the ability of policy makers to fine tune the economy

When an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of ?

A The multiplier effects

B supply side economics

C None of these answers

D The crowding out effect

Review Detailed Answer

Correct Answer: The multiplier effects

Which of the following statements regarding taxes is correct ?

A Most economists believe that in the short run the greatest impact of a change in taxes is on aggregate supply, not aggregate demand

B An increase in taxes shifts the aggregate demand curve to the right

C A decrease in taxes shifts the aggregate supply curve to the left

D A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.

Review Detailed Answer

Correct Answer: A permanent change in taxes has a greater effect on aggregate demand than a temporary change in taxes.

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?

When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?

An increase in the marginal propensity to consumer (MPC) ?

The initial impact of an increase in government spending is to shift ?

The initial effect of an increase in the money supply is to ?

When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ?

Which of the following best describes how an increase in the money supply shift the aggregate demand curve ?

Which of the following statements about stabilization policy is not true ?

When an increase in government purchases increases the income of some people, and those people spend some of that increase in income on additional consumer goods, we have seen a demonstration of ?

Which of the following statements regarding taxes is correct ?