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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

International specialization takes place because of______________?
A differences in technology
B differences in factor endowments
C scale economies
D All of the above
Correct Answer: All of the above
If there is a balance of payments deficit then in a floating exchange rate system ?
A The external value of the currency would tend to fall
B The external value of the currency would tend to rise
C The injections from trade are greater then the withdrawals
D Aggregate demand is increasing
Correct Answer: The external value of the currency would tend to fall
In a floating exchange rate system ?
A The government intervenes to influence the exchange rate
B The exchange rate should adjust to equate the supply and demand of the currency
C The Balance of payments should always be in surplus
D The Balance of payments will always equal the government budget
Correct Answer: The exchange rate should adjust to equate the supply and demand of the currency
Tariffs ?
A Decrease the domestic price of a product
B Increase government earnings from tax
C Increase the quantity of imports
D Decrease domestic production
Correct Answer: Increase the quantity of imports
Free trade is based on the principle of ?
A Comparative advantage
B Comparative scale
C Economies of advantage
D Production possibility advantage
Correct Answer: Comparative advantage
Which of the following is not an argument for protectionism ?
A To protect infant industries
B To increase the level of imports
C To Protect strategic industries
D To improve the balance of payments
Correct Answer: To increase the level of imports
When countries from large trading blocs like the EU, the size of the bloc has the effect of improving them ?
A balance of trade
B comparative advantage
C balance of payments
D terms of trade
Correct Answer: terms of trade
If a group of countries abolish trade barriers between them and set same tariffs on goods coming in from other countries they are a ?
A common market
B free trade area
C customs union
D federation
Correct Answer: customs union
Economists suggest that an optimum tariff would be one which reduce imports to a point where___________?
A Comparative advantage is achieved
B Price elasticity of imports is unity and tariff revenue is maximized
C import prices are the same as export prices
D marginal social cost equals marginal social benefit
Correct Answer: marginal social cost equals marginal social benefit
Government payments made to domestic firms in order to encourage exports are called ?
A Side payments
B Tariffs
C subsidies
D export quotas
Correct Answer: subsidies
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