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PPSC Economics Chapter 1 Basic Economics MCQs With Answers
Question # 1
Aggregate demand refers to the total demand for all domestically produced goods and services in an economy generated from.
Choose an answer
The household and government sectors
The household sector
All sectors except the rest of the world
All sectors including the rest of the world.
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Question # 2
Horizontal integration may lead to internal economics of scale. Which of the following is not a type of internal economy of scale.
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Purchasing
Technical
Financial
Safety
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Question # 3
What makes economics scientific.
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It tests theories against observations and modifies the theories if needed.
It uses numbers to measure things
It involves the use of experiments
It is a description of how thing work
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Question # 4
Resources in an economy
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Are always fixed
Can never decrease
Always increase over time
Are limited at any moment in time
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Question # 5
Ordinal measurement approach was not presented by
Choose an answer
Allen
Hicks
Edge worth
Robbins
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Question # 6
An increase in price all other, things unchanged leads to.
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Shift demand outwards
Shift demand inward
A contraction of demand
An extension of demand
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Question # 7
Which of the following is a normative statement in economics.
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More spending by the government reduces poverty
Higher taxes lead to less desire to work
the UK Economy is growing fast relative to other European Union members
The Government should concentrate on reducing unemployment
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Question # 8
According to the quantity theory of money an increase in the money supply is most likely to lead ot inflation if
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The velocity of circulation decreases
The number of transactions decreases
There is deflation
The velocity of circulation and the number of transactions is constant
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Question # 9
The natural rate of unemployment is likely to tall if
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Unemployment benefits increase
Income tax increases
More training is available for the unemployed
Geographical immobility increases
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Question # 10
Which of the following is not a global organization?
Choose an answer
IMF
World bank
Competition commission
WTO
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Question # 11
Firm in oligopoly are likely to.
Choose an answer
Invest heavily in branding
Act independently of other firms
Try to differentiate its products
Try to be a price maker
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Question # 12
The standard of living is often measured by
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Real GDP per capita
Real GDP
Real GDP * Population
Real GDP Plus depreciation
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Question # 13
If employees cannot accept a job because of the costs of moving this is known as.
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Occupational immobility
Cyclical unemployment
Structural immobility
Geographical immobility
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Question # 14
A subsidy paid to producers.
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Shifts the supply curve
Shifts the demand curve
Leads to a contractional supply
Leads to an extension of supply
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Question # 15
If people are made unemployed because of a fall in aggregate demand this is known as.
Choose an answer
Frictional unemployment
Seasonal unemployment
Cyclical unemployment
Structural unemployment
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Question # 16
If firm earn normal profits.
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They will aim to leave the industry
Other firms will join the industry
The revenue equals total costs
No profit is made in accounting terms
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Question # 17
Earning from primary products are often unstable because.
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Demand is price elastic
Supply is price elastic
Supply conditions are relatively stable
Supply conditions are unstable
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Question # 18
Rapid increases in the price level during periods of recession or high unemployment are known as.
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Slump
Stagnation
Stagflation
Inflation
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Question # 19
Which of the following is an injection into the economy.
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Investment
Saving
Taxation
Import spending
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Question # 20
An increase in demand for a product should.
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Increase equilibrium price and quantity.
Decrease equilibrium price and quantity.
Increase equilibrium price and decrease quantity.
Decrease equilibrium price and increase quantity.
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Question # 21
Finding a partner to work with abroad is called a.
Choose an answer
Takeover
Merger
Acquisition
Joint venture
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