Review Questions for Agriculturists Board Exam

(Economics and Marketing)

1, The meaning of the word “economics” is most closely associated with this word

a. Free b. scare c. unlimited d. unrestricted

2. The study of individual firms is classified as

a. cooperatives b. macroeconomics c. microeconomics d. sociology

3. Otherwise known as Tenant’s Emancipation Decree

a. P.D 17 b. P.D 27 c. P.D 47 d. P.D 97

4. The law that provided for the mechanisms of the implementation of the Comprehensive Agrarian
Reform Program

a. R.A # 131 b. R.A # 132 c. E.O # 228 d. E.O # 229

5. The economic study of the way economic relationships ought to be and which involve value
judgments.

a. Normative economics b/ Positive economics c. Price theory d. production

theory

6. The study that deals with the behavior of the whole economy and discusses topics like GNP, level of
employment and national income.

a. agrarian Reform b. macroeconomic c. microeconomics d. taxation

7. Economics is of Greek origin derived from the Greek word “oikonomia” which means

a. business management b. classroom management c. crop management d. household

management

8. The objective or goal of a rational producer or firm is

a. benefit maximization b/ cost maximization c. profit maximization d. sales

maximization

9. The theory that shows the technical relationship between the application of inputs or factors of
production and the resulting maximum obtainable output/

a. cost function b. production function c. profit function d. savings

function

10. This law was promulgated to initiate land reforms including the abolition of share tenancy transfer of
capital to industry, and the establishment of implementing agency
 a. R.A # 3844 b. R.A # 4844 c. R.A # 5844 d. R.A 6844

11. The Agriculture and Modernization Act of 1997 is otherwise known as

a. R.A # 3435 b. R.A # 3436 c. R.A # 8435 d. R.A # 8436

12. Which aspect of taxation below involves normative economics?

a. effect of the tax on incentives to work b. fairness of the tax c. incidence of the tax
d. escape

13. The social science concerned with the production, distribution, consumption and exchange of goods
and services

a. anthropology b. economics c. semantics d. sociology

14. System of compulsory contribution levied by a government own persons, corporation and property,
primarily as a source of revenue for government expenses

a. conscription b. philianthropy c. subsidy d. taxation

15. In public law, in its widest sense, the right or power to take private property for public use is

a. due process of law b. easement c. eminent domain d. injunction

16, The economic system under which private individuals and businesses carry on the production and
exchange of goods and services through a network of markets

a. Capitalism b. merchantism c. socialism d. syndicalism,

17. An applied science which is concerned the identification, description and classification of economic
problems in agriculture

a. agricultural economics b. applied economics c. normative economics d.

positive econ

18. These are considered scarce and to be paid for and are produced and needed by men to satisfy their
wants

a. markets goods b. economic goods c. intangible goods d.

tangible goods

19. In economics, this word is defined as the creation of goods and services to satisfy human wants

a. consumption b. marketing c. production d. transporting

20. From the production equation Q = f (X1,X2,X3); X1,X2 and X3 represent the

a. production costs b. production inputs c, production output d. production

function
21. In production, this is the input considered as the organizer and coordinator of labor, land and capital

a. cooperative b. corporation c. management d. firm

22. If total product Q = 120, quantity of labor L = 10 average product of labor is equal to

a. -12 b. 12 c. -20 d. 20

23. The act that provided for recognition and the use of electronic commercial and non-commercial
transactions and penalties for unlawful use thereof otherwise known as Electronic Commerce Act.

a. R.A # 3571 b. R.A # 7586 c. R.A # 8435 d. R.A # 8793

24. The following are the three program components of the National Service Training Program (NSTP).
Except

a. Civic Welfare Training b. Information and Education

c. Literacy Training Service d. Reserve Office Training Coprs(ROTC)

25. The Department of Agrarian Reform was created by E.O. # 347 of 1971 and was reorganized on july
26, 1987 and was reorganized by this law

a. E.O # 129 b. E.O # 129-A c.O # 229 d. E.O # 229-A\

26. Promotes the reproduction, processing, marketing and distribution of high-valued crops

a. R.A # 7800 b. R.A # 7900 c. R.A # 8700 d. R.A # 9700

27.Under this law, the Phil. Crop Insurance Corporation is mandated to provide insurance protection to
farmers against losses arising from natural disasters, plant disease and pest infestation.

a. P.D # 1467 b. P.D # 2467 c. P.D # 3467 d. P.D # 4467

28. R.A # 8550 is otherwise known as:

a. The Phil. Crops Code of 1998 b. The Phil. Fisheries Code of 1998

c. The Phil Forestry Code of 1988 d. The Phil. Marine Code of 1998

29. Created by virtue of Section 75 of R.A 8435 in the Proffessional Regulation Commission to upgrade
the Agriculture and Fisheries profession

a. Agriculture and Fisheries Act b. Agriculture and Fisheries Board

c. Agriculture and Fisheries Order d. Agriculture and Fisheries Policy

30. The president responsible for the implementation of the Comprehensive Agrarian Reform Program in
the Philippines
 a. Corazon C. Aquino b. Joseph E. Estrada c. Ferdinand E. Ramos d. Fidel
V. Ramos

31. The 1991 Consumer Act of the Philippines is also known as

a. Consumer Product Quality and Safety Law b. Consumer Quality and Safety Law

c. Product Quality and Safety Law d. Product Safety and Quality Law

32. One of the provisions of R.A # 3571 not prohibited along public roads, plazas, parks, school premises
or any public pleasure ground.

a. cutting trees b. destroying of planted growing trees c. injuring planted growing trees d.
trimming trees

33. The social science concerned with the production, distribution, consumption and exchange of goods
and services to satisfy human wants

a. anthropology b. semantics c. sociology d. economics

34. In economics, the term used to describe the persistent increase in the general price level

a. inflation b. flux c. interest d. coordinate

35. Any medium of exchange that is widely accepted in payment for goods and services and in settlement
of depts.

a. bond b. foreign exchange c. money d. stock exchange

36. One who assumes the responsibility for a business operation with the expectation of making a profit

a. ambassador b. consumer c. entrepreneur d. politician

37. Represents the fraction of the labor force that cannot find jobs

a. employment rate b. unemployment rate c. birth rate d. Labor Force

Participation rate

38. The monetary authority in the Philippines that governs the level of money supply through policies set
by the Monetary Board

a. Central Bank of the Philippines b. Business Trust Corporation

c. Philippine Trust Company d. allied Bank of the Philippines

39. Refers to the exchange of goods and services between one country and other countries

a. Expo-Filipino Trade b. International Trade c. Domestic Trade

d. Barter Trade

40. The financial arm of the Agrarian Reform program

 a. Land Bank of the Philippines b. Metro Bank

c. Development Bank of the Phil. D. Bank of the Philippine Islands

41. Otherwise known as the Comprehensive Agrarian reform Law

a. R.A 6658 b. R.A 6656 c. R.A 6756 d. R.A 6657

42. Repealed P.D 175 and is known as the Cooperative Code of the Philippines

a. R.A ^6839 b. R.A 6936 c. R.A 6938 d. R.A 6836

43. Organized the Rochdale Society of Equitable Pioneers and which gain him the title as Father of
Cooperatives

a. Robert Roosevelt b. Robert Cruz c. Robert Lee d. Robert Owen

44. R.A 7160 is also known as

a. National Government Code b. Code of Agrarian Reform

c. Local Government Code d. Agricultural Land Reform Code

45. Amended by R>a numbers 8421 and 8424 and is also known as the Expanded VAT Law

a. R.A 7716 b. R.A 7677 c. R.A 7617 d. R.A 7717

46. The use by the taxpayer of illegal or fraudulent means to defeat or reduce the payment of tax

a. tax evasion b. tax exemption c. tax avoidance d. tax

transformation

47. Form of business organization created by operation of law with not less than 5 and not more than 15
members.

a. cooperative b. partnership c. corporation d. sole proprietorship

48. These are taxes imposed on goods exported from imported into a country

a. energy taxes b. value-added taxes c. Customs Duties d.

income taxes

49. The tax on the net income or the entire income realized in one taxable year

a. income tax b. donors tax c. value-added tax d. revenue tax

50. This act shall be known as the “High-Value Crops Development Act of 1995”

a. R.A # 7900 b. R.A # 8900 c. R.A # 9700 d. R.A # 9800

51. Republic Act # 6938 is otherwise known as the

 a. Agriculture Code of the Philippines b. Cooperative Code of the Philippines

c. Forestry Code of the Philippines d. Taxation Code of the Philippine

52. This law was created to upgrade the Agriculture and Fisheries profession

a. R.A # 5435 b. R.A # 6435 c. R.A # 7435 d. R.A # 8435

53. A president’s report to the nation is called

a. BONA b. MONA c. SONA d. ZONA

54. A voluntary option under the National Service Training Program of 2001.

a. PCIC b. ACMA c. NAPC d. ROTC

55. The food basket of the Philippines

a. Visayas b. Mindanao c. Luzon d. Palawan

56. A Latin phrase which means in Economics all other things held constant

a. Ceteris paribus b. Ager cultura c. Laissez faire d. none of the

above

57. Also known as the law of diminishing marginal productivity

a. Law of Diminishing Returns b. Law of Diminishing Utility

c. Law of Diminishing Supply d. Law of Diminishing Demand

58. The central monetary authority that governs the level of money in the Philippines

a. BSP b. GSP c. MSP d. SSP

59. A collective term referring to the use of taxation and government spending to influence the level of
income.

a. monetary policy b. fiscal policy c. trade policy d. credit policy

60. A grant of immunity to particular persos or corporations from a tax which they are obliged to pay.

a. tax avoidance b. tax amnesty c. tax evasion d. tax exemption

61. Efficient stage of production lies at

a. Stage 1 b.Stage 2 c. Stage 3 d. Stage 4

62. In production, output increases at a different rate at

a. Stage 1 b.Stage 2 c. Stage 3 d. Stage 4

63. Also called as equal product curves

a. demand curves b. indifference curves c. isoquant curve

d. isocost curve

64. Total revenue is derived by using this formula (where P = Price, Q = Output)

a. P* Q b. P x Q c. P – Q d. Q/P

65. The extra product or output added for every one extra unit of that factor added, while other factors are
held constant.

a.Average Product b. Total Product c. Marginal Product d.

Constant product

66. The classical economist who described Economics as an inquiry into the nature and causes of the
wealth of nation.

a. Adam Smith b. David Ricardo c. Karl Marx d. Paul

Smuelson

67. Refers to the know-hows and the physical means of transforming resources into want satisfying form.

a. depreciation b. production c. resources d. techniques of

production

68. This is a state in which the producer maximizes output at a given total outlay. It is at this point where
the firm’s isoquant is just tangent to its isocost

a. consumer equilibrium b. market equilibrium c. producer equilibrium d. trade

equilibrium

69. The difference between total revenue and total costs

a. break even price b. marginal revenue c. profit d. variable cost

70. Point where profit is zero

a. break even - point b. MC is constant c. MR>MC d.

MR=P

71. Cost of the self-owned, self employed resources used by a firm in the production process

a. cash cost b. explicit cost c. fixed cost d. implicit cost

72. Value of the best foregone alternative use of the resource

a. economic cost b. implicit cost c. opportunity cost d.

variable cost
73. Costs that do not vary with output

a. explicit cost b. fixed cost c. implicit cost d. variable cost

74. If the average cost of producing 10,000 units of product X is P 0.50, total fixed cost is equal to

a. P 2,000 b. P 5,000 c. P 10,000 d. P 15,000

75. The additional cost incurred from producing an additional unit of output

a. marginal cost b. marginal avenue c. total cost d. total revenue

76. It refers to the unintended effect ( beneficial or harmful) of production or consumption on other
individuals not involved in production or consumption

A. externality b. pollution c. side effects d. social cost

77. Pollution is an example of

a. economies of scale b. negative externality c. pecuniary externality d.

positive externality

78. If good X is sold at P20 per piece, total revenue earned from selling 100 units is

a. P20 b. P200 c. P2,000 d. P20,000

79. A market characterized by the presence of many buyers and sellers selling identical products

a. monopoly b. monopolistic competition c. oligolipoly d. pure

competition

80. Condition for profit maximization regardless of market structure

a. MR = MC b. P = MC c. MR = MC d. Profit is zero

81. The price that is equal to a firm’s average variable cost, wherein the firm will no longer produce any
output

a. break-even price b. marginal price c. market price d. shut down

price

82. If the firm stops operating, the loss is equal to

a. marginal cost b. opportunity cost c. total fixed cost d. total

variable cost

83. A market characterized by the presence of only one seller

a. monobloc b. monogamy c. monopoly d. pure competition

84. Which is a characteristic of an oligopolistic industry?

 a. market situation with only a few competing sellers b. market situation with only
one seller

c. market situation with one buyer d. open market

85. Non-price competition often takes the form of

a. collusion b. momogenous products c. price wars d. product

differentiation

86. If the firm’s total production cost for 20,000 units is P50,000 and if the goods are sold at p3.00 per
unit, how much is the firm’s profit?

a. P10 b. P1,000 c. P10,000 d. P100,000

87. The softdrink industry in the Philippines is an example of what market structure/?

a. monopoly b. monopolistic market c. oligopoly d. pure

competition

88. Average cost eventually increases as output increases because

a. AFC continuously decreases b. AVC eventually increases c. MC increases d. MC is

constant

89. In a purely competitive firm, the supply curve is

a. the rising portion of the MC curve over and above the minimum point of the AVC curve

b. the rising portion of the Mc curve over and above the minimum point of the AC curve

c. the rising portion of the MC curve above the break-even curve

d. the rising portion of its MC curve

90. Which of the following industries closely approximates the perfectly competitive model?

a. automobile industry b. shampoo industry c. softdrink industry

d. rice industry

91. When the demand curve is elastic, marginal revenue (MR) is

a. 1 b. positive c. negative d. zero

92. In long-run equilibrium, the pure monopolist can make pure profits because of

a. advertising b. blocked entry c. high selling price d. low

production cost
93. The demand curve faced by a competitive firm is

a. perfectly elastic b. infinitely elastic c. horizontal d. all of

the above

94. A tax imposed upon the monopolist regardless of the output level

a. ad valorem tax b. lumpsum tax c. profit tax d. specific tax

95. A formal organization of firms in an oligopolistic industry where decisions regarding output, price
sales are made.

a. cartel b. cooperative c. corporation d. partnership

96. Occurs when expanding plant size reduces cost per unit because of, among others, specialization and
division of labor and technological factors.

a. diseconomies of scale b. economies of scale c. monopoly d.

oligopoly

97. The law that was made as bais for the Erap Para sa Mahirap Program

a. RA 8187 b. RA 8425 c. RA 8435 d. RA 8524

98. The Memo Order issued by former President Ramos in 1993 which made IPM the standard approach
to crop husbandry and pest management in rice, corn and vegetable production in the country.

a. Memo Order 126 b. Memo Order 128 c, Memo Order 162 d.

Memo Order 163

99. Otherwise known as the “ Ecological Solid Waste Management Act”

a. RA 8003 b. RA 8004 c. RA 8623 d. RA 9003

100. It provides for the establishment and management of the National Integrated Protected Areas
Systems or commonly known as the NIPAS Act.

a. RA 7484 b. RA 7585 c. RA 7586 d. RA 7686

101. Commonly known as the “ Clean Air Act of 1999” is

a. RA 7849 b. RA 7894 c. RA 7900 d. RA 8749

102. It is an act which provides for the development, management and conservation of the fisheries and
aquatic resources, integrating all laws pertinent thereto, and for other purposes

a. RA 7900 b. RA 8435 c. RA 8550 d. RA 8749

103. An act to promote the production, processing, marketing and distribution of high-value crops
providing funds therefore, and for other purposes
 a. RA 7900 b. RA 8435 c. RA 8550 d. RA 8749

104. Executive Order No. 430 series of 1990 issued by former President Corazon Aquino created the

a. National Committee on Biotechnology b. National Committee on Product

Safety Council

c. National Committee on Biosafety Council of the Philippines

d. National Committee on Science and Technology Council of the Philippines

105. The DA Administrative Order issued in 2002 which provided for the rules and regulations for the
importation and release into the environment of plants/plant products derived from the use of
modern technology

a. Administrative Order No. 08 b. Administrative Order No. 10

c. Administrative Order No. 14 d. Administrative Order No. 24

106. Known as the “Water code of the Philippines”

a. PD No. 705 b. PD No. 1066 c. PD No. 1067 d. PD No. 1586

107. It was the act ordaining reforms in the electric power industry, including the privatization of the
assets of NPC, ly among other purposes and otherwise known as the “Electric Power Industry
Reform Act of 2001.”

a. RA 7916 b. RA 8981 c. RA 9136 d. RA 9361

108. Known as the AFMA of 1997, it provides the delineation of Strategic Agriculture and Fisheries
Deveopment Zones (SAFDZ) within the Network of Protected Area for Agriculture and Agro-
industrial development (NPAAAD) to ensure that lands are efficiently and sustainability utilized for
food and non-food production and agro-industrialization.

a. RA 7586 b. RA 8371 c. RA 8435 d. RA 8550

109. A body created by RA 8435 to upgrade the Agriculture and Fisheries profession

a. Agriculture and Fisheries Board b. Professional Regulation Commission

c. Fisheries Inspection and Quarantine Service d. Inter-Agency Anti-smuggling Task

Force

110. The banner program for agricultural development, it is a transitional blueprint for putting AFMA to
work

a. Emergency Employment Program b. Comprehensive Agrarian Reform

c. Ginintuang Masaganang Ani (GMA) program d. Urban Development Housing

Program
111. A body charged with the responsibility of monitoring and regulating the importation and exportation
of fish and fishery/aquatic resources

a. Agriculture and Fisheries Board b. Fisheries Inspecction and Quarantine

Service

c. National Committee on Product Safety Council d. National Committee on Biosafety Council of

the Philippines\

112. Known as the Indigenous People’s Right Act of 1997, it provides the rights of indigenous cultural
communities/indigenous people (ICCs/IPs) to the ancestral domains to ensure their economic,
social, and cultural well-being shall be protected.

a. RA 7586 b. RA 8371 c. RA 8435 d. RA 8550

113. The using up of commodities to satisfy human wants.

a. consumption b. distribution c. production d. rationing

114. Goods which are produced to satisfy consumption needs directly

a. competitive goods b. consumption goods c. market goods d. productive

good

115. Goods which do not satisfy consumption needs directly but are used to meet the requirement of other
industries

a. competitive goods b. consumption goods c. market goods d. productive

good

116. The various quantities of a commodity which buyers are willing and able to purchase at a given
price, time, and place

a. demand b. shortage c. supply d. surplus

117. The various quantities of a commodity that sellers are willing to sell at a given price, place, and time

a. demand b. shortage c. supply d. surplus

118. A movement along a given demand curve indicating a change in the quantity bought, resulting from
a change in the price of the commodity itself when all other factors are held constant

a. change in demand b. change in quantity demanded c. change in supply d. change in

quantity supplied

119. The law which states that buyers are likely to buy more goods and services as price decreases and by
less goods and services as price rises.

a. law of supply b. law of demand c. law of diminishing returns d. law of

increasing cost
120. A shift of the demand curve either to the left or to the right indicating a change in the quantity
bought at all alternative prices\

a. change in supply b. change in demand c. change in quantity supplied d. change in

quantity demanded

121. If the percentage increase in the quantity of a commodity demanded is smaller than the percentage
fall in its price, the coefficient of price elasticity of demand is

a. zero b. less than one c. equal to one d. greater than one

122. A rightward shift of the demand curve indicates

a. a decreased in demand b. an increase in demand

c. a decreased in quantity demanded d. an increase in quantity demanded

123. A market condition which causes price to increase, decreasing the amount that each consumer is
willing to buy

a. demand b. shortage c. surplus d. market equilibrium

124. The demand for “necessities” rend to be

a. elastic b. inelastic c. perfectly elastic d. unitary

elastic

125. A measure of the degree of responsiveness of quantity demanded to changes in market price.

a. price elasticity of demand b. price elasticity supply

c. income elasticity demand d. income elasticity of supply

126. Surplus occurs when

a. Qd>Qs b. Qd<Qs c. more is bought than what is sold d. price is lower than
the equilibrium

127. If the percentage change in the price of a commodity results is a higher percentage change in
quantity demanded demand is

a. elastic b. inelastic c. perfectly elastic d. unitary

elastic

128. The response of quantity offered for sale for every change in price is

a. cross elasticity b. income elasticity c. elasticity of demand d.

elasticity of supply
129. Meeting the needs of present generation without compromising the ability of future generation to
meet their own

a. economic growth b. economic freedom c. economic development d. sustainable

development

130. Enterprises that utilize a high ration of labor or capital relative to a particular land resource

a. extensive b. intensive c. subsistent d. sustainable

131. The economic principle that seeks or helps to explain specialization of production or specialization
of doing a particularly activity

a. Principle of Comparative Advantage b. Principle of Diminishing Marginal

Utility

c. Principle of Diminishing Returns d. Principle of Increasing Cost

132. When the long-run average cost falls as output increases, there is

a. absolute advantage b. relative advantage c. diseconomies of size d. economies of size

133. The principal determinant of supply elasticity is

a. demand b. price c. supply d. time

134. The market period where it is not possible for suppliers to alter supply. Supply does not respond to
the price level

a. very short-run b. intermediate c. long run d. short run

135. The market period where all factors used in production are variable

a. immediate b. intermediate c. long run d. short-run

136. An improvement in technology causes supply to

a. decrease b. increase c. stop d. remain the same

137. An increase in the consumers income will cause the demand for goods and services to

a. decrease b. increase c. stop d. remain the same

138. A good for which demand decreases as consumers income increases

a. abnormal goods b. inferior goods c. normal goods d. consumer goods

139. Defined as any practice, method, technology, philosophy or system of agricultural production that is
economically feasible, ecologically sound, socially just and humane, culturally appropriate, and
grounded on holistic science
 a. economic growth b. economic development c. sustainable agriculture d.
development

140. A development strategy which is designed to promote domestic industry to replace imports

a. inward-looking development b. outward looking development

c. balanced development d. basic needs strategy

141. A development strategy which is geared towards developing export industries that are in demand in
the world market

a. inward-looking development b. outward looking development

c. balanced development d. basic needs strategy

142. If unemployment rate is 20%

a. 4 out of 20 who wanted to work cannot find jobs

b. 10 out of 50 who wanted to work cannot find jobs

c. 20 out of 100 who wanted to work cannot find jobs

d. all of the above

143. The central monetary authority in the Philippines is

a. Monetary Board b. Department of Finance c. Central Bank d. Board of

Investment

144. The policy making body of the Central Bank is

a. Monetary Board b. Board of Investments c. Department of Finance

145. The interest rate that Central Bank charges to commercial banks is called

a. reserve requirement b. market interest rate c. rediscount rate d. flat money

146. The Central Bank engages in open market purchase if it wants to

a. expand demand for money b. contract demand for money

c. expand supply of money d. contract supply of money in the economy

147. The following are instruments of an expansionary fiscal policy except

a. increased taxes b. increased government spending c. decreased taxes d.

increase government
148. A deflationary gap exists when equilibrium output/income is

a. greater than income at full employment level b. less than income at full employment
level

c. equal to the full employment level d. none of the above

149. An inflationary gap exists when equilibrium output/income is

a. greater than income at full employment level b. less than income at full employment
level

c. equal to the full employment level d. none of the above

150. The economy has budget deficit if

a. total revenues exceed total expenditures b. total expenditures exceeds

total revenues

c. total revenues and total expenditures are the same d. none of the above

151. The change in equilibrium income as a result of a one-peso change in the autonomous component of
aggregate expenditure is called

a. marginal propensity to consume b. marginal propensity to save c. multiplier d. none

of the above

152. The change in consumption spending that arises from a one-peso change in disposable income is
called

a. marginal propensity to consume b. marginal propensity to save c. multiplier d. none

of the above

153. Asset demand for money is also known as

a. transactions demand b. precautionary demand c. speculative demand d. none

of the above

154. The represents the liabilities of the Cental Bank to the public sector in the form of currency in
circulation and to the banking sector in the form of cash reserves

a. interest rate b. reserve money c. rediscount money d. time deposits

155. The proportion by which the public hold money in the form of cash or deposits is called

a. reserve-deposit ratio b. high-powered money c. currency-deposit ratio d.

rediscount rate

156. The monetary base of an economy is called

 a. reserve-deposit ratio b. high-powered money c. currency-deposit ratio d.
rediscount rate

157. Money is serve as a

a. unit of account b. medium of exchange

c. store of value and standard for deferred payment d. all of the above

158. Proportion of deposits that banks are mandated by the Central Bank (CB) to keep either as vault cash
or as a deposit with the CB for safekeeping is called

a. excess reserves b. currency-deposit ratio c. required reserves d.

reserve deposit ratio

159. The amount of reserves that banks keep is affected by

a. market interest rate b. rediscount rate c. reserve requirement d. all of

the above

160. The higher the reserve requirement, the

a. greater is the potential amount of new deposit money that can be generated

b. lesser is the potential amount of new deposit money that can be generated

c. grater is the expansion of money supply d. none of the above

161. In monetary equilibrium there is a

a. positive relationship between the level of income and the rate of interest

b. negative relationship between the level of income and the rate of interest

c. positive relationship between money supply and the rate of interest

d. negative relationship between money supply and the rate of interest

162. An increase in government spending has

a. positive effect upon the level of income if the LM schedule is vertical

b. negative effect upon the level of income if the Lm schedule is vertical

c. no effect upon the level of income if the Lm schedule is vertical

d. none of the above

163. The “Paradox of Thrift” states that

a. higher savings cause a reduction in equilibrium income

 b. higher savings cause income to increase

c. higher savings does not affect equilibrium income

d. none of the above

164. An increase in government spending

a. increase budget defecit b. increases budget surplus

c. does not affect government revenues d. none of the above

165. If C = 100 + 0.75 Yd \

a. the MPC is 0.50 b. the MPC is 0.25 c. the MPS is 0.75 d. the MPS is
0.25

166. If C = 80 + 0.50Yd, I = 100, G = 50, and T = 100, the equilibrium level of income is

a. 300 b. 360 c. 400 d. 46o

167. Considering the equilibrium income in number 166 and if the full employment level of income is
400, then there exist

a. an inflationary gap b. a deflationary gap c. no gap d. none of the

above

168. In order to eliminate the gap in number 166, government spending should

a. increase by 20 b. decrease by 20 c. increase by 60 d. decrease by 70

169. In order to eliminate the gap in number 166, the amount of lumpsum tax should

a. increase by 40 b. decrease by 40 c. increase by 60 d. decrease by 60

170. In order to eliminate the gap in number 166, both the amount of government spending and lumpsum
tax should

a. increase by 40 b. decrease by 40 c. increase by 30 d. decrease by 30

171. Investment is a function of the rate of interest. A decrease in the rate of interest

a. increases the level of investment while decreases the level of income

b. increases the level of investment while increases the level of income

c. decreases the level of investment while decreases the level of income

d. increases the level of investment while increases the level of income

172. The IS schedule shows a

a. positive relationship between interest rate and income

b. negative relationship between interest rateand income

c. positive relationship between interest rate and the level of investment

d. negative relationship between interest rate and the level of investment

173. The LM schedule shows a

a. positive relationship between interest rate and income

b. negative relationship between interest rate and income

c. positive relationship between interest rate and the level of money supply

d. negative relationship between interest rate and the level of money supply

174. The equation for planned investment is 100- 500i while the equation for planned saving is -40 +
0.25Y. Given a 0.08 interest rate, equilibrium income is

a. 350 b. 400 c. 450 d. 500

175. The equilibrium income in (174)

a. increased when interest rate increases to 0.10

b, decreases when interest rate increases to 0.10

c remains the same when interest rate increases to 0.10

d. either increases or decreases when the interest rate increases to 0.10

176. If C = 60 + 0.80 Yd, I = 300 – 600i, G = 50, and T = 75, the IS equation is

a. Y = 1750 – 3000i b. Y = 1750 + 3000i c. Y = 2050 –3000i d. Y = 2050 +3000i

177. The supply of money is determined by the behavior of the

a. public b. banks c. BSP d. all of the above

178. a demand for wage increase can cause

a. demand-pull inflation b. cost-push inflation

c. both demand-pull and cost-push inflation d. none of the above

179. In the short-run, a demand-pull inflation results into

 a. increased output and employment b. increased output and decreased employment

c. decreased output and employment d. decreased output and increased employment

180. If the LM equation is Y = 600 + 800i, which of the following combinations of the rate of interest
and the level of income do not represent equilibrium between the supply of and demand for money?

a. The rate of interest is 0.10 and the level of income is 680

b. The rate of interest is 0.08 and the level of income is 660

c. The rate of interest is 0.06 and the level of income is 648

d. The rate of interest is 0.05 and the level of income is 640

181. The demand for money is

a. Positively related to the level of income and negatively related to the rate of interest

b. negatively related to the level of income and rate of interest

c. positively related to the rate of interest and the level of income; or

d. negatively related to the level of income and positively related to the rate of interest

182.-190. Pesa is a small and closed economy. Its national currency is Pesitas. This year, the Pesan
investment function, I = 250 – 400i. A survey showed that the Pesans would like to save 0.20 out of
every additional Pesitas they earn. Moreover, it was revealed that the subsistence level of
consumption among Pesans is 100; that is, with zero income , people would still spend 100 Pesitas.
Meanwhile, the government spending, G = 300. On the other hand, the government collects a
lumpsum tax, T = 250.

182. The Pesans economy has

a. MPC = 0.50 b. MPC = 0.20 c. MPS = 0.80 d. MPS = 0.20

183. The consumption function is

a. C = 100 + 0.20 Yd b. Y = 100 – 20 Yd c. Y = 100 + 0.80 Yd d. Y =

100 – 0.80 Yd

184. The government expenditure multiplier is

a. 1.25 b. 2 c. 4 d. 5

185. The tax multiplier is

a. 3 b. -3 c. 4 d. -4
186. The balance-budget multiplier is

a. 1 b. 2 c. 3 d. 4

187. If money supply, Ms =300; transactions-precautionary demand for money, Mt = 0.20 Y; and
speculative demand for money, Ma = 200i. The equilibrium rate of interest is

a. 33.75 b. 43.35% c. 55.75% d. 68.75%

188. With the new rate of interest in (46), the equilibrium level of income is

a. 1575 b. 1375 c. 1135 d. 875

189. When the money supply increases by 80, the equilibrium rate of interest

a. increases to 33.75% b. increases by 10% c. decreases by 10% d.

remains the same

190. When the money supply increases by 80, the equilibrium income

a. increases to 33.75% b. increase by 10% c, decreases to 1135 d.

remains the same

191. Increased government spending shifts the IS schedule to the right by government multiplier (K g∆G).
this fiscal measure increases the level of income by K g∆G if

a. there is no speculative demand for money b. the LM schedule is vertical

c. the LM schedule is horizontal; or d. the LM schedule has a slope greater than zero

192. It is a money wage expressed in terms of the goods and services it can purchase

a. real wage b. money wage c. nominal wage d. minimum

wage

193. It is the value of money a peso compared to its full value in a given base year.

a. PPP b. WPI c. CPI d. RPI

194. Shows the flow of goods and services between any given country and the rest of the world

a. balance of payments b. capital transactions c. current transactions d.

transfer payments

195. These are goods purchased and resold with or without further processing

a. formal goods b, services c. intermediate goods d. economic

goods

196. It represents the net income of the various unincorporated business enterprises
 a. depreciation b. net income c. rental income of persons d.
proprietor’s income

197. Interest bearing certificates of indebtedness

a. notes receivable b. bonds c. notes payable d. borrowings

198. It is a means by which a government provides financial resources to cover a budget deficit or
allocated financial resources arising from a budget surplus

a. financing b. insurance premiums c. investment d. none of the

above

199. It is the difference between gross final out and intermediate output

a. gross domestic product b. gross national product

c. gross value added d. gross domestic capital function

200. They are export of imported goods which do not undergo physical and/or chemical transformation in
thePhilippines

a. non-traditional export b. traditional export c. re-exports d. none of the

above

201.It is the amount of money or other resources measured in terms of money placed on activities or other
forms of assets for the purpose of earning profit

a. capital investments b. stocks c. investments d. subscription capital

202. Any paid form of nonpersonal presentation and promotion of ideas, goods or services by an
identified sponsor

a. promotion b. publicity c. advertisement d. personal selling

203. Is the amount of money charged for a product or service

a. cost b. price c. value d. profit

204. Consists of short-term incentives to encourage purchase or sales of a product or service

a. advertisement b. publicity c. sales promotion d. selling

205. Is a set of interdependent organizations involved in the process of a making a product or service for
use or consumption by the consumer or industrial user.

a. middlemen b. wholesalers c. distribution channel d. agents

206. Is anything that can be offered to a market for attention, acquisition, use or consumption that might
satisfy a want or need.

a. assets b. resources c. promotion d. product

207. A price reduction to reward customers for paying bills on time

a. volume discount b. functional discount c. cash discount d.

seasonal discount

208. Is a name, design or symbol (or a combination of these) that identifies the products of a seller or
group of sellers

a. design b. trademark c. brand d. advertisement

209. A pricing approach where the seller sets price in accordance with competitors.

a. target profit pricing b. demand-based pricing c. competition-based pricing d. cost

pricing

210. A pricing strategy where the firm charges the same price to all customers who seek to purchase a
good or service under similar conditions.

a. one-price policy b. flexible pricing c. customary pricing d. variable pricing

211. A distribution strategy where the producer purposely limit the number of middlemen handling the
products.

a. intensive distribution b. selective distribution c. exclusive distribution

d. extensive

212. A market is usually defined as a

a. place where buyers and sellers meet to exchange goods and services

b. group of freely competing buyers and sellers

c. an activity of the buyers and sellers

d. all of the above

213. The series of services involved in the process of moving the products from the farm gate to the
consumers

a. exchange .b. marketing c. transporting d. disbursement

214. The marketing services performed alter the product characteristics which include

a. form, time, place and possession characteristics

b. form, time, odor and weight characteristics

 c. form, time, weight and shape characteristics

d. shape, size, weight and color of the product

215. The services performed by the producer before the point of first sale are called

a. marketing services b. post-production services c. extra services d. all of

the above

216. One of the approaches to the study of marketing that answers the question “what” in who does what
is

a. institutional approach b. consumer approach c. functional approach d.

survey approach

217. The approaches to the study of marketing are

a. institutional approach b. functional approach c. commodity approach c. all

of the above

218. Another approach to the study of marketing that deals with the organization of the market as it
influence the nature of competition and pricing including the pattern of behavior of firms

a. functional approach b. structure conduct performance approach

c. market study approach d. all of the above

219. Characteristics of the product is one of the problem areas in agricultural marketing. One of the
characteristics named below is not

a. bulkiness b. perishability c. quality d. seasonality of

production

220. Marketing functions are specialized activities performed in accomplishing the marketing process
which include

a. exchange functions b. physical functions c. facilitating functions d. all of the

above

221. Standardization and grading, financing, risk bearing are functions classified as

a. physical functions b. exchange functions c. facilitating function d. none

of the above

222. The sorting of products according to their quality attributes like size, weight, color etc. is called

a. standardization b. winnowing c. grading d. all of the

above
223. The practice of making the quality specification of grades uniform is

a. standardization b. grading c. classifying d. sorting

224. Marketing margin is can be defined as

a. difference between prices at different levels of marketing

b. what the consumer pays minus what the producer receives

c. difference between retail and farm price

d. all of the above

225. Percentage margin can be computed as

a. absolute margin over the selling price

b. absolute margin times selling prices

c. absolute margin over the buying price

d. none of the above

226. Percentage mark-up can be expressed as the

a. absolute margin over the selling price

b. absolute margin over the buying price

c. absolute margin times the selling price

d. absolute margin times the buying price

227. The book which became the opposite of classical economics written by Adam Smith

a. Inquiry into the Nature of Causes of the Wealth of Nations

b. Principle of Political Economy

c. Essay on the Principle of Population

d. General Theory of Employment, Interest and Money

228. The astronomer who enunciated the quantity theory of money and prices

a. John Locke b. John Law c. David Hume d. Copernicus

229. A left-alone policy with respect to business as a natural consequence of the principle of competition
which is the underlying assumption of the invisible hands
 a. Cost b.Laissez Fare c. Economics d. freedom

230. Who published the book “General Theory of Employment, Interest and Money”

a. Adam Smith b. David Ricardo c. John Maynard Keynes d. Leon Wales

231. Is an Economic system associated more with the political system of a strong one man or junta
dictarorship

a. Marxist b, Fascism c, Feudalism d, Socialism

232. The theory of how government spending decisions are made and how they should be made.

a. Quantity Theory b. Theory of Public Choice c. Satisfying Theory d. Game theory

233. The exchange of goods and services across international boundaries

a. regional trade b. domestic trade c. international trade d. local trade

234. Source of gains from trade

a. resource endowment b. forex c. remittance d. foreign investors

235. The ability of one nation to produce a commodity at a lesser cost compared to that of another nation

a. cost efficiency b. low labor cost c. comparative advantage d. open

economy

236. Forgone benefit

a. liability b. fixed cost c. variable cost d. opportunity cost

237. Real production costs generally fall as the scale of output increases

a. diseconomy b. economies of scale c. rising output d. diminishing

output

238. The ratio of the price of goods exported to the price of the goods imported

a. price ratio b. export ratio c. import ratio d. terms of trade

239. Zero government interference in the flow of imports and exports

a. free trade b. duty free c. free flow d. barter

240. A policy, which defends domestic producers from foreign competition

a. monetarist b. protectionist c. fiscalist d. mercantilism

241. Tariff barrier

a. import tax b. export tax c. quota d. preferential trading

242. Percentage tax of the price of imported commodity

a. specific tax b. property tax c. ad valorem d. business tax

243. Agreement among countries to present common trade regulations and trading front

a. collusion b. merging c. common market d. uniform

market

244. ASEAN’s trade agreement

a. CEPT b. AFTA c. EPZ d. NAFTA

245. Symbolizes EC’s monetary integration

a. US$ b. EC flag c. Euro E d. EC market

246. The longest and most comprehensive round of GATT negotiations

a. Uruguay round b. Manila round c. Tokyo round d. Jakarta round

247. Forerunner of WTO

a. CEPT b. EU c;SEATO d. GATT

248. Refers to the actual foreign currency or various claims on it

a. stock exchange b. foreign exchange c. money market d. futures

market

249. The organizational framework within which individuals, firms, and banks buy and sell foreign
currencies or foreign exchange

a. foreign exchange market b. gold market c. commodities market d.

futures market

250. The domestic currency price of a foreign currency

a. foreign exchange rate b. growth rate c. flow rate d. interest rate

251. A summary of all its economic transactions with the rest of the world during a given year

a. national income b. GNP c. balance of payments d. GDP

252. Shows the change in the nation’s assets abroad and foreign assets in the nation other than official
reserve assets

a. capital account b. current account c. balance sheet d.

inventory