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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.

According to supply side economists as tax rates are reduced labour supply should increase. This implies that ?

A There is no income effect when tax rates are changed

B The income effect of a wage change is greater than the substitution effect of a wage change.

C There is no substitution effect when tax rates are changed

D The substitution effect of a wage change is greater than the income effect of a wage change

Review Detailed Answer

Correct Answer: The substitution effect of a wage change is greater than the income effect of a wage change

Which of the following would be considered a supply-side policy ?

A An increase in the minimum wage that would cause consumer spending to increase

B Investment tax credits for businesses to encourage investment

C Restrictions placed on the amount that can be imported

D An increased in government spending that would lead to increased aggregate demand

Review Detailed Answer

Correct Answer: Investment tax credits for businesses to encourage investment

In Which of the business cycle do firms try to cut stocks in order to save costs ?

A The upturn

B The peeking out

C The expansion

D The recession

Review Detailed Answer

Correct Answer: The recession

If injections are less than withdrawals at the full-employment level of national income, there is ?

A an inflationary gap

B hysteresis

C A deflationary gap

D hyperinflation

Review Detailed Answer

Correct Answer: A deflationary gap

Assume there is no government or foreign setor, If the MPC is 75 a Rs20 million decrease in planned investment will cause aggregate output to decrease by ?

A Rs80 million

B Rs20 million

C Rs 15 million

D Rs26.67 million

Review Detailed Answer

Correct Answer: Rs80 million

Assuming there is no government or foreign sector, if the multiplier is 2.5 the MPC is ?

A 4

B 25

C 6

D 2.5

Review Detailed Answer

Correct Answer: 6

The ratio of change in the equilibrium level of output to a change in some autonomous variable is the ?

A automatic stabiliser

B multiplier

C elasticity coefficient

D marginal propensity of the autonomous variable

Review Detailed Answer

Correct Answer: multiplier

The marginal propensity to withdraw is ?

A 1/investment multiplier

B 1-(1/injections multiplier

C MPS + MPT + MPM

D the proportion of national income that is withdraw from the circular flow of income

Review Detailed Answer

Correct Answer: MPS + MPT + MPM

As the MPS increases the multiplier will ?

A decrease

B remain constant

C increase

D either increase or decrease depending on the size of the change in investment

Review Detailed Answer

Correct Answer: decrease

Keynes suggested that decisions to consume and save were based on ?

A previous decisions

B absolute income

C relative income

D permanent income

Review Detailed Answer

Correct Answer: absolute income

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Economics Mcqs 4423 MCQs [All-Courses]

All Topics 4423

All Topics 4423

According to supply side economists as tax rates are reduced labour supply should increase. This implies that ?

Which of the following would be considered a supply-side policy ?

In Which of the business cycle do firms try to cut stocks in order to save costs ?

If injections are less than withdrawals at the full-employment level of national income, there is ?

Assume there is no government or foreign setor, If the MPC is 75 a Rs20 million decrease in planned investment will cause aggregate output to decrease by ?

Assuming there is no government or foreign sector, if the multiplier is 2.5 the MPC is ?

The ratio of change in the equilibrium level of output to a change in some autonomous variable is the ?

The marginal propensity to withdraw is ?

As the MPS increases the multiplier will ?

Keynes suggested that decisions to consume and save were based on ?