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Economics Mcqs 4423 MCQs [All-Courses]

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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.

All Topics  4423

The main reason that people hold money to buy things is referred to as the ?
A Profit motive
B Precautionary motive
C Transactions motive
D speculation motive
Correct Answer: Transactions motive
Which of the following events will lead to an increase in the demand for money ?
A An increase in the interest rate
B An increase in the level of aggregate output
C A decrease in the price level
D An increase in the supply of money
Correct Answer: An increase in the level of aggregate output
If the quantity of money demanded exceeds the quantity of money supplied then the interest rate will ?
A change in a certain direction
B remain constant
C fall
D rise
Correct Answer: rise
A bank has excess reserves to lend but is unable to find anyone to borrow the money This will _________ the size of the money multiplier?
A reduce
B have no effect on
C increase
D double
Correct Answer: reduce
The difference between a bank’s actual reserves and its required reserves is its?
A required reserve ratio
B profit margin
C excess reserves
D net worth
Correct Answer: excess reserves
A checking deposit in a bank in considered _________ of that bank?
A an asset
B capital
C net worth
D a liability
Correct Answer: a liability
Money that a government has required has required to be accepted in settlement of debts is ?
A barter money
B currency value
C legal tender
D commodity money
Correct Answer: legal tender
Which one of the following is not true ?
A The difference between the price at which commercial bank sells an asset to the central bank and the price it agrees to buy it back can be expressed as an annualized percentage of the selling price and this is called the refinancing rate
B Commercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate
C In the UK the refinancing rate is known as the repo rate and in the USA it is referred to as the discount rate.
D If the central bank has bought some assets from a commercial bank with an agreement that the commercial bank will buy them back at a later date, then this would be called a repo
Correct Answer: Commercial banks may borrow from and lend to each other and the interest rate at which they do this is called the refinancing rate
Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will ?
A rise by an amount that depends on the bank’s reserve ratio
B rise by less than the amount of the deposit
C fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio
D fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio
Correct Answer: rise by an amount that depends on the bank’s reserve ratio
The refinancing rate is ?
A The interest rate at Which commercial banks lend to and borrow from each other
B The interest rate the European Central Bank pays on reserves
C The interest rates the public pays when borrowing from banks
D The interest rates the European Central Bank charges on loans to banks
Correct Answer: The interest rates the European Central Bank charges on loans to banks
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