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Preface:
This book is primarily designed for students and teachers. This book contains more than 8381 ques-
tions from the core areas of NTA NET ECONOMICS. The questions are grouped chapter-wise. There
are total 8381+ MCQ with answers. This reference book provides a single source for multiple
choice questions and answers in NTA NET ECONOMICS. It is intended for students as well as for
developers and researchers in the field. This book is highly useful for faculties and students. One
can use this book as a study guide, knowledge test questions bank, practice test kit, quiz book, trivia
questions . . . etc.
NARAYAN CHANGDER
The strategy used in this book is the same as that which mothers and grandmothers have been
using for ages to induce kids in the family to sip more soup (or some other nutritious drink). The
children are told that some cherries (their favourite noodles or cherries ) are hidden somewhere
in the bowl, and that serves as an incentive for drinking the soup. In joint families, by the time the
children are old enough to know the trick played by their grandma, there is usually another group
of kids ready to fall for it! They excite the kids, but the real nutrition lies not in the noodles but in
the soup. The problems given in this book are like those noodles/cherries while solving all these
problems are nutritious soup. Now it is your choice to drink the nutritious soups or not!!!.
The overwhelming response to the first edition of this book has inspired me to bring out this second
edition, which is a thoroughly revised and updated version of the first.
Every effort has been made to make this book error-free. I welcome all constructive criticism of the
book. I will upload more MCQ’s on NTA NET ECONOMICS in quiz format. Keep visiting our website
https://www.gatecseit.in/.
This E-book is dedicated to the loving memory of my mother:
my guiding light, my shining star,
forever
It is my deepest gratitude and warmest

affection that I dedicate this Ebook.
To my mother JOYTSNA CHANGDER

who could not see this Ebook.
who has been a constant source of Knowledge and in-

spiration. Mom, Covid did not take you, it took our
many dreams. wherever you are we will meet again.
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Contents
1 Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 Micro Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Macro Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
1.3 Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
1.4 Econometrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
1.5 Mathematical Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
1.6 International Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
1.7 Public Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
1.8 Money and Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289
1.9 Growth Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369
1.10 Development Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412
1.11 nvironmental Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453
1.12 Demography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476
1.13 Indian Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 493
1.14 Rural Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532
1.15 Co-operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549
1.16 Development Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559
1.17 Development Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 588
1.18 Applied Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 632
1.19 Business Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 696
NARAYAN CHANGDER
1. Economics
1.1 Micro Economics

1. What is an economic system where only (C) quantity demanded increases
the government makes the economic deci- (D) quantity demanded decreases
sions?
5. Amount a seller is paid for a good minus
(A) traditional economy
the seller’s cost of providing it
(B) free enterprise
(A) Consumer surplus
(C) mixed economy
(B) Producer surplus
(D) command economy (C) Total surplus
2. London introduces charge on most pollut- (D) Deadweight tax
ing vehicles.
6. Producer surplus is
(A) Business news (A) Cost-willingness to pay
(B) Economic news (B) Price-cost to seller
(C) Microeconomics (C) Cost to seller-price
(D) Macroeconomics (D) Willingness to pay-price
3. SSEMI 3 a:When the income in households 7. Which of the following is considered deter-
increases, what is the likely result? minants of demand?
(A) The supply curve will shift to the left. (A) Income
(B) The supply curve becomes vertical. (B) Price of related goods
(C) The demand curve shifts to the right (C) Tastes and fashion
(D) The demand curve shifts to the left. (D) all of the above
4. SSEMI 2 a:If the price of a product in- 8. The study of the economy as a whole
creases, which is true regarding the de- (A) Macroeconomics
mand curve? (B) Microeconomics
(A) demand increases (C) Economics
(B) demand decreases (D) none of above
1. D 2. B 2. C 3. C 4. D 5. B 6. B 7. D 8. A 9. A
4 Chapter 1. Economics
9. Which of the following is NOT a determi- 15. Land, Labor, Capital, and Entrepreneur-
nant of supply? ship
(A) prices of gold (A) Diversification
(B) technology (B) Deductions
(C) Portfolio
(C) substitute goods
(D) Factors of Production
(D) complementary goods
16. ) Scarcity requires that people must
NARAYAN CHANGDER
10. The income & substitution effects account (A) trade
for (B) compete
(A) the upward sloping supply curve (C) cooperate
(B) the downward sloping demand curve (D) make choices
(C) movements along a given supply 17. The law of supply says that at higher
curve prices,
(D) the “other things equal” assumption (A) sellers will supply more of an eco-
nomic good.
11. Characteristics of equilibrium include (B) sellers will supply less of an economic
(A) where supply and demand intersect good.
(B) where QS = QD (C) buyers will demand less of an eco-
nomic good.
(C) no shortage and no surplus
(D) buyers will demand more of an eco-
(D) all of these nomic good.
12. What is supply? 18. Short run marginal costs eventually in-
crease because of the effects of:
(A) Amount that determines what is pur-
chased (A) increasing marginal product
(B) diminishing marginal product
(B) Amount producers are willing to sell
(C) increasing fixed costs
(C) Amount consumers are willing to buy (D) diseconomies of scale
(D) Amount an item costs
19. SSEMI 2 a:Which statement describes the
13. A point above the PPF curve represents law of demand?
(A) efficiency (A) As prices rise, quantity demanded de-
creases.
(B) inefficiency (B) As prices rise, demand decreases.
(C) Unemployment (C) As prices fall, quantity demanded de-
(D) Unattainable creases.
(D) As prices fall, demand decreases.
14. Which of the following can cause an in-
crease in supply? 20. Does an increase in Variable Costs affect
a firm’s output?
(A) a decrease in productivity
(A) Yes
(B) a decrease in the cost of inputs (B) No
(C) an increase in taxes (C) Maybe
(D) fewer sellers in the marketplace (D) none of above
10. B 11. D 12. B 13. D 14. B 15. D 16. D 17. A 18. B 19. A 20. A 21. D
1.1 Micro Economics 5
21. Economics is a social sciences study how: (A) Jack has an absolute advantage in the
(A) Managing the business so that it is production of X.
profitable. (B) Jack has a comparative advantage in
(B) Avoid scarcity for many different us- the production of X.
ages and competition. (C) Jill has a comparative advantage in
(C) Creating personal fortunes in the the production of Y.
stock market. (D) Jill has an absolute advantage in the
(D) Allocation of scarce resources for var- production of X.
ious usages.
26. A government payment made to a busi-
22. If the supply of product X is perfectly elas- ness is a
tic, an increase in the demand for it will (A) tax
increase: (B) regulation
(A) equilibrium quantity but reduce equi- (C) subsidy
librium price
(D) resource
(B) equilibrium quantity but equilibrium
price will be unchanged 27. Which of the following is related to Mi-
(C) equilibrium price but reduce equilib- croeconomics?
rium quantity (A) Jute Industry
(D) equilibrium price but equilibrium (B) Unemployment problem
quantity will be unchanged
(C) National income
23. Which of the following is NOT one of the (D) Poverty of the country
three basic questions of economics when
looking at economic systems? 28. If the equation y = 5 + 0.6 x was graphed,
the:
(A) What goods and services will be pro-
duced? (A) slope would be-5
(B) What is the price of the goods? (B) slope would be +5
(C) Who is responsible for producing (C) slope would be +0.6
goods and services? (D) vertical intercept would be +0.6
(D) How will goods and services be dis-
tributed to customers? 29. Giving a haircut
(A) example of scarcity
24. When the price of a product increases, a (B) example of a service
consumer is able to buy less of it with a
given money income. This describes: (C) example of a good
(A) the cost effect (D) example of a consumer
(B) the inflationary effect 30. What is true about normative state-
(C) the income effect ments?
(D) the substitution effect (A) They are objective
(B) They are objective and testable
25. There are two goods, X and Y. If the op-
portunity cost of producing good X is lower (C) They are subjective and not testable
for Jack than for Jill, then (D) All of the options
22. B 23. B 24. C 25. B 26. C 27. A 28. C 29. B 30. C 31. B
31. Which economic prblm involves selection (B) Identical Products

os category of people who will ultimately (C) Price Makers:firms can set their own
consume the goods price.
(A) How to produce (D) Low barriers of entry
(B) For whom to produce
(C) What to produce 37. A table that lists the quantity of a good
that a single person will buy at each price
(D) None of these
in a market.
NARAYAN CHANGDER
32. SSEMI 4 c:A market structure in which (A) demand schedule
there is only one seller is known as a (B) market demand schedule
(A) Pure competition (C) elasticity chart
(B) Monopolistic competition
(D) supply and demand graph
(C) Oligopoly
(D) Monopoly 38. Which one of these is NOT a cause of
scarcity?
33. Which of the following best describes Pro-
(A) overproduction of time
ductive Efficiency?
(B) not enough materials
(A) Minimum ATC
(C) Poor Distribution of Resources
(B) Minimum AVC
(C) Minimum MC (D) Rapid Increase in Demand
(D) Minimum AFC 39. An equilibrium price will NOT change un-
less?
34. An increase in the price of Anadin is likely
to be paired with a(n) in the demand (A) either demand & supply change (or
for Panadol because the two goods are both)
(A) increase; complements (B) both demand & supply change
(B) increase; substitutes (C) only demand changes
(C) decrease; complements (D) only supply changes
(D) decrease; substitutes
40. Which of the following is an example of
35. As the price of a good rises in a market, it Micro Economics study?
acts as a signal: (A) National Income
(A) consumers that they should buy a (B) Consumer behavior
greater quantity of the good. (C) Unemployment
(B) to producers that they should supply
(D) Foreign trade
a greater quantity of the good.
(C) to consumer that they should in- 41. If Michael Jordan did advertisements for
crease their demand for the good. Steak and Shake, this would cause the
(D) to producers that they should in- curve for Steak and Shake to shift
crease their supply of the good. (A) demand right
36. Which of the following ARE NOT character- (B) demand left
istics of a perfectly competitive market? (C) supply right
(A) Many buyers/sellers (D) supply left
32. D 33. A 34. B 35. B 36. C 37. A 38. A 39. A 40. B 41. A 42. C
42. The problem of unlimited desires and lim- 48. Suppose that there is a decrease in number
ited resources is the problem of of sellers in a market. We would expect
(A) wants (A) Supply to remain unchanged
(B) marginal benefit (B) Supply could increase or decrease
(C) scarcity (C) Supply to increase
(D) free enterprise (D) Supply to decrease
43. The demand for a(n) increases as 49. The concept of opportunity cost is based
money income increases-that is, the de- upon the principle of
mand curve shifts rightward when con- (A) need
sumer income increases. (B) consumption
(A) normal good (C) scarcity
(B) inferior good (D) profit
(C) superior good 50. What is the fundamental problem of eco-
(D) declining good nomics?
(A) How to keep consumers out of debt?
44. A monopoly can price discriminate be-
tween two groups of consumers if each (B) How to fulfill our unlimited wants and
group has needs with limited resources?
(A) a large consumer surplus. (C) How to figure out the way to make the
most money?
(B) a different willingness to pay.
(D) How do we ensure all people get a col-
(C) the same willingness to pay. lege education?
(D) the ability to resell the good to the
other group. 51. The word economics is most closely con-
nected with the word
45. Consumer surplus is equal to: (A) Free
(A) Price-willingness to pay (B) Scarcity
(B) Cost-price (C) Unlimited
(C) Willingness to pay-price (D) Restricted
(D) Price-cost 52. A change in quantity supplied is caused by:
46. Scarcity forces people to (A) a change in technology
(A) Make Choices (B) a change in the cost of an input
(B) satisfy all their wants and needs (C) the price elasticity of supply
(C) Give up opportunity cost (D) a change in the price of the produced
good
(D) none of above
53. Alternative name of Microeconomics is
47. Production Possibility curve is also called called
(A) Production Possibility Boundary (A) Income Theory
(B) Transformation Curve (B) Employment Theory
(C) Production Possibility Frontier (C) Price Theory
(D) All of these (D) Demand Theory
43. A 44. B 45. C 46. A 47. D 48. D 49. C 50. B 51. B 52. D 53. C 54. C
54. What is the type of business that is owned 60. In an oligopoly, there are
by two or more people? (A) many firms and barriers to entry.
(A) entrepreneurship (B) many firms and no barriers to entry.
(B) corporation (C) few firms and barriers to entry.
(C) partnership (D) few firms and no barriers to entry.
(D) sole proprietorship 61. A technique of reducing or forgoing one or
55. What is it when a large group of suppliers more desirable outcomes in exchange for
NARAYAN CHANGDER
all produce the same goods? increasing or obtaining other desirable out-
comes in order to maximize the total re-
(A) Perfect Competition turn or effectiveness under given circum-
(B) Monopolistic COmpetition stances.
(C) Monopoly (A) Trade-off
(D) Oligopoly (B) Opportunity cost
(C) PPF
56. A theory which attempts to explain human
(D) Scarcity
economic behavior.
(A) Economic Hypothesis 62. A shortage causes the
(B) Economic Game (A) demand curve to shift leftward
(C) Economic Event (B) supply curve to shift rightward.
(D) Economic Model (C) price to rise
(D) price to fall
57. Additional cost associated by producing
one additional unit of product. 63. The vertical distance between a firm’s to-
tal cost (TC) and its total variable cost
(A) Fixed Costs
(TVC) curves
(B) Average Costs
(A) decreases as output decreases
(C) Marginal Costs (B) is equal to the average variable cost
(D) Emplicit Costs (AVC)
(C) is equal to the total fixed cost (TFC)
58. Which of the following makes economics a
science? (D) is equal to the marginal cost (MC)
(A) Systemized body of knowledge 64. Public utilities are an example.
(B) Capability of measurement (A) Oligopoly
(C) Cause and effect relationship (B) Natural Monopoly
(D) All of the options (C) Perfect Competition
(D) Monopolistic Competition
59. An increase in the price of aspirin is likely
to be paired with a(n) in the demand 65. (5) The nation of Namibia is working hard
for Tylenol because the two goods are to eliminate poverty in the country. The
(A) increase; complements government has taken ownership of the
factors of production, and now everyone
(B) increase; substitutes
is guaranteed a job. Which of the follow-
(C) decrease; complements ing most likely represents the type of eco-
(D) decrease; substitutes nomic system found in Namibia?
55. A 56. D 57. C 58. D 59. B 60. C 61. A 62. C 63. C 64. B 65. B
(A) Market 70. Which of the following are true in

(B) Command monopoly?
(C) Mixed (A) The monopolist can set price and out-
(D) Traditional put
(B) The monopolist can make supernor-
66. Which of the following is true?
mal profits in the short run and long run
(A) Needs, wants, and resources are all
unlimited (C) The demand curve for the firm and the
market are the same
(B) Needs and wants are unlimited but re-
sources are limited (D) The monopolist protect their position
(C) Needs and wants are limited but re- through barriers to entry
sources are unlimited
71. Macroeconomics focuses on all of the fol-
(D) Needs, wants, and resources are all
lowing except
limited
(A) Unemployment prblm
67. The downward slope of a demand curve
(B) Inflation in the economy
(A) represents the law of demand
(C) Aggregate demand
(B) shows that as the price of a good
rises, consumers increase the quantity (D) Jute industry
they demand
(C) indicates how the quantity demanded 72. Every economy faces the economic prob-
changes when incomes rise and the good lems like:
is a normal good (A) What to produce?
(D) indicates how demand changes when (B) How to Produce?
incomes rise and the good is a normal
good (C) For whom to produce?
(D) All of these
68. Choose the example for normative state-
ment? 73. Who controls economic activities under
(A) The unemployment rate of Oman is centrally planned economy?
the lowest in GCC
(A) Industrialist
(B) India is the second largest populated
country in the world (B) Private Firms
(C) UAE is the richest country in the mid- (C) Government
dle east (D) Consumers
(D) Saudi Arabia should provide Hajj sub-
sidy for poor 74. Research microeconomics:
69. How would the PPC of India be affected (A) Behavioral behavior of economic cells
when there is inflow of Foreign Direct In- in market types.
vestment in India? (B) Activities taking place in the whole
(A) Shifts to the right economy.
(B) Shifts to the left (C) Consumer behavior to maximize satis-
(C) Rotates around X-axis faction.
(D) None of these (D) The overall price of a country.
66. B 67. A 68. D 69. A 70. A 71. D 72. D 73. C 74. A 75. B
75. Something that people desire such as lux- 80. Natalia uses capital and labour in the pro-
ury cars, jewelry, vacations or plastic duction of cakes. When Natalia doubled
surgery are often called? the capital and labour he used, he produced
(A) Needs twice as many cakes.What did Natalia ex-
(B) Wants perience?
(C) Services (A) diminishing returns
(D) Choices (B) coordination costs
(C) decreasing returns to scale
NARAYAN CHANGDER
76. It is the study of the nations economy as
a whole. (D) constant returns to scale
(A) Microeconomics 81. produce a quantity of goods that max-
(B) National economy imizes total surplus
(C) National output (A) Government restrictions
(D) Macroeconomics (B) Taxation
77. The Law of Supply: (C) Communism
(A) Is the exact replica of the Law Of De- (D) Free markets
mand
82. This is something that encourages or mo-
(B) Reflects producers offering more of a
tivates someone to produce a good or ser-
good as its price increases and less as its
vice:
price falls
(C) Has an inverse relationship with (A) Competition
price. (B) Profit
(D) Reflects producers offering less of a (C) Incentive
good as its price increases and more of as (D) Investment
its price falls.
83. What type of economic system allows pri-
78. Global oil demand to rise despite push for vate businesses to decide what to pro-
renewables duce, how to produce and for whom to pro-
(A) Business news duce?
(B) Economic news (A) Market
(C) Microeconomics (B) Mixed
(D) Macroeconomics (C) Command
79. SSEMI 4 c:Company X sells a good where (D) Traditional
there is a lot of competition. Companies
enter and leave the market often. Com- 84. ) The statement that is a positive
pany X stays in business because they con- statement
stantly use advertising to make their prod- (A) the price of gasoline is too high
uct seem different. In which market struc- (B) too many people in the United States
ture does Company X operate? have no health care insurance
(A) Pure Competition (C) the price of sugar in the United States
(B) Monopolistic Competition is higher than the price in Australia
(C) Oligopoly (D) more students should study eco-
(D) Monopoly nomics
76. D 77. B 78. B 78. C 79. B 80. D 81. D 82. C 83. A 84. C 85. A
85. Increased government regulations can (B) what will be produced, how it will be
cause the supply curve to produced, and for whom it will be pro-
(A) shift to the left duced
(B) shift to the right (C) the availability of resources and de-
(C) increase mand
(D) decrease (D) the extent of government involvement
86. Which of the following is true about an im- 91. If factor prices increase,
perfectly competitive firm’s marginal rev- (A) a firm will move to a lower point on its
enue (MR) curve if it has a linear and long-run average cost curve only
downward-sloping demand curve?
(B) there will be no change in the cost
(A) MR decreases at an increasing rate. curves in the long run
(B) MR increases at first, then decreases.
(C) there will be a downward shift in the
(C) MR is constant. long-run average cost curve but not in the
(D) MR decreases and is less than de- short-run average cost curve
mand. (D) both the long-run and short-run aver-
(E) MR is greater than demand. age cost curves will shift upward
87. Opportunity cost version of comparative 92. Which type of economy is controlled by
cost advantage doctrine was introduced by the government
(A) J.M.Keynes
(A) Command Economy
(B) Kindleberger
(B) Free Market Economy
(C) Haberler
(C) Mixed Economy
(D) Karl Marx
(D) Traditional Economy
88. What is the framework that places the
generalized insights of the theory in a 93. Barriers to entry are highest in which two
more specific contextual setting? types of markets?
(A) Economic Model (A) differentiated competition and
(B) Economic Principle oligopoly
(C) Economic Experiment (B) perfect competition and differenti-
(D) Economic Theorem ated competition
(C) monopoly and differentiated competi-
89. When some resources are shifted from use tion
1 to use 2, the marginal rate of transfor-
mation: (D) oligopoly and monopoly
(A) increases 94. The phrase “a change in demand” most di-
(B) decreases rectly implies a
(C) remains constant (A) movement along the curve
(D) is zero (B) movement along the price curve
90. What is the key factor in determining the (C) change in quantity demanded of a
type of economy a country has? good
(A) public and private sector (D) shift in the demand curve
86. D 87. C 88. A 89. A 90. D 91. D 92. A 93. D 94. D 95. A
95. The tendency of suppliers to offer more of 101. What are the factors of production?
a good at a higher price: (A) Labor
(A) Law of Supply (B) Land
(B) Law of Demand (C) Capital
(C) Law of Economics (D) Entrepreneurship
(D) Law of Net Income (E) Machines
96. Which of the following could attract new 102. What is the fundamental problem of ev-
NARAYAN CHANGDER
firm to join an industry? ery society?
(A) Normal profits (A) labor costs
(B) Economic losses (B) scarcity
(C) economic interdependence
(C) Economic profits
(D) market fluctuation
(D) Accounting profits
103. The long-run ATC curve:
97. The economic problem arises due to
(A) will rise if there are diminishing re-
(A) unlimited wants turns
(B) limited resources (B) will fall if there are diminishing re-
(C) alternative uses of limited resources turns
(D) all of the above (C) will rise if economies of scale are in-
curred
98. If the economics is used to describe what (D) is based on the assumption that all re-
exists and how it works, what approach sources are variable
is being used?
(A) Positive economics 104. The study of an entire economy.
(B) Negative economics (A) macroeconomics
(C) Macroeconomics (B) microeconomics
(D) Microeconomics (C) opportunity cost
(D) none of above
99. Which of the following Is the cause of eco-
nomic prblm 105. Helen has $20, 000. She wants to in-
vest in a business in which she can control
(A) Scarcity of resouces
the decisions and keep all of the profits. In
(B) Unlimited wants which type of business should she invest?
(C) Alternative users (A) Sole proprietorship
(D) All of these (B) corporation
(C) partnership
100. Dan has $5, 000. He wants to invest
his money in the type of business that has (D) none of above
the least amount of risk. In which type of 106. Xiaomi launches $10bn Hong Kong stock
business should he invest? market listing.
(A) Sole Proprietorship (A) Business news
(B) Corporation (B) Economic news
(C) Partnership (C) Microeconomics
(D) Stockholder (D) Macroeconomics
96. C 97. D 98. A 99. D 100. B 101. A 101. B 101. C 101. D 102. B 103. D
104. A 105. A 106. A 107. C
107. Patent right for invention leads to (D) time becomes less valuable as more
(A) Natural monopoly of a product is consumed
(B) Fiscal monopoly
113. In practical application of the law of de-
(C) Legal monopoly mand, if the price of rice decreases, the
(D) Technical monopoly quantity demanded for rice will
108. If the quantity supplied is equal to the (A) decreases
quantity demanded, there is (B) increases
(A) equilibrium price (C) remains unchanged
(B) break-even point (D) becomes zero
(C) surplus
(D) shortage 114. Why does scarcity exist?
(A) Each year workers tend to produce
109. What is competitive market? less than previously
(A) Market in which there are nay buyers (B) Machines wear out in time
and sellers
(C) There are not sufficient resources to
(B) Negligible impact on market price meet everyone’s wants
(C) Price and Quantity are determined by
(D) There is a limit to people’s wants
all buyers and sellers
(D) All of the above 115. the sum of all costs associated with pro-
duction
110. The Quantity of goods that a producer is
able and willing to sell at a certain price in (A) Total cost
a given period of time (B) short run
(A) Supply (C) supply elasticity
(B) Demand (D) negative returns
(C) Market
(D) Business 116. Julie has to decide between attending
her prom or going on vacation with her
111. Occurs when each addition of an input re- friend. Julie decides that perhaps prom is
sults in declining quantity of the output not that important and chooses vacation
(A) Diminishing Marginal Utility with her friend. This is an example of a?
(B) Diminishing Marginal Costs (A) Trade Off
(C) Diminishing Marginal Returns (B) Opportunity Cost
(D) Diminishing Marginal Profits (C) Rational Economic Decision Making
112. A consumer’s demand curve for a product (D) Diminishing Marginal Utility
is downsloping because
117. To produce or make something you need
(A) total utility falls below marginal utility this part of the four factors of production
as more of a product is consumed
(A) land
(B) the income and substitution effects
precisely offset eachother (B) labor
(C) marginal utility diminishes as more of (C) capital
a product is consumed (D) entrepreneurship
108. A 109. D 110. A 111. C 112. C 113. B 114. C 115. A 116. B 117. B 118. A
118. Traditionally, The subject matter of Eco- 124. This factor of production puts the other
nomics has been studied under the follow- factors together so you can actually pro-
ing broad branches duce things!
(A) Micro and macro economics (A) land
(B) Positive and normative economics (B) labor
(C) Deductive and inductive
(C) capital
(D) None of the above
(D) entrepreneurship
NARAYAN CHANGDER
119. When economists look at supply and de-
mand schedules and/or supply and de- 125. What is the economy when you go hunt
mand curves, what are the only two vari- just like your father?
ables examined? (A) Traditional
(A) Price and Demand (B) Command
(B) Price and Supply (C) Mixed
(C) Price and Quantity
(D) Market
(D) Price and Equilibrium Point
120. What country is not an example of capi- 126. When diseconomies of scale occur:
talism (A) the long-run ATC curve falls
(A) Germany (B) MC intersects ATC
(B) U.S.A (C) the long-run ATC curve rises
(C) North Korea (D) average fixed costs will rise
(D) China
127. Economic growth is depicted by
121. An example of an oligopoly would be
what? (A) shift in the production possibilities
(A) Auto industry frontier outward
(B) Milk (B) a movement from inside the curve to-
(C) Jeans ward the curve.
(D) none of above (C) a shift in the production possibilities
frontier inward.
122. In a Mixed Economic System, the eco-
(D) a movement along a production pos-
nomic problems are solved by the
sibilities frontier toward capital goods.
(A) price mechanism.
(B) general public. 128. According to Adam Smith, the unseen
(C) government. forces of the market place would be re-
(D) price mechanism and the general pub- sponsible for getting buyers and sellers to-
lic gether so they could do business. What
was the name of this force?
123. Demand is defined as consumers’ and
(A) Laissez Faire
to consume a good.
(B) Invisible Hand
(A) Ability; need
(B) Willingness; ability (C) Consumer Sovereignty
(C) Willingness; need (D) Bourgeoisie
(D) Want; need (E) Proletariat
119. C 120. C 121. A 122. D 123. B 124. D 125. A 126. C 127. A 128. B 129. A
129. According to the , quantity demanded (B) change in quantity demanded

and price move in opposite directions. (C) elasticity
(A) law of demand
(D) change in demand
(B) demand curve
(C) demand schedule 134. Which of the following is a characteristic
(D) market demand of perfect competition?
(A) No barriers to entry
130. Which of the following is correct about
PPC? (B) firms produce identical products
(A) Inefficient production occurs at any (C) price maker
point outside the production possibilities (D) one seller in the whole industry
curve.
(B) All points along the curve are efficient 135. What type of economy do most countries
points because each point represents a in the world have?
maximum output possibility. (A) Market economy
(C) All points inside the curve are
(B) Command economy
unattainable due to scarcity of resources.
(D) None of the above (C) Traditional economy
(D) Mixed economy
131. When an individual specializes to pro-
duce one good, and then acquires addi- 136. The property whereby long-run average
tional desired goods from other special- total cost falls as the quantity of output
ists, increases.
(A) both parties gain as a result of volun- (A) Economies of Scale
tary exchange.
(B) Efficient Scale
(B) both parties gain as a result of fraud-
ulent exchange. (C) Constant Returns to Scale
(C) neither party gains as specialization (D) Diseconomies of Scale
decreases efficiency.
(D) neither party gains as specialization 137. refers to the desire, willingness, and
decreases productivity. ability to buy a good or service.
(A) Supply
132. An Increase in Supply or a shift of the
supply curve to the right occurs when: (B) Demand
(A) A rise in input costs happens (C) Law of Demand
(B) If Government pays subsidies for a (D) Market Supply
good.
(C) If producers expect the price to fall in 138. The problem of what to produce covers
the future. The issue relationship to
(D) If government regulates a good. (A) What goods are to be produced
(B) What quantity of goods to be pro-
133. A change in the price of a good causes
duced
people to buy more or less of an item. This
best describes the concept of (C) Both A and B
(A) the demand curve (D) Neither A nor B
130. B 131. A 132. B 133. B 134. A 135. D 136. A 137. B 138. C 139. C
139. SSEMI 3 a:If the price of an item in- (A) Supply

creases, demand for its substitutes (B) Demand
(A) is unaffected (C) Market
(B) decreases
(D) Business
(C) increases
(D) there is no way to tell 145. Which of the following would be studied
in microeconomics?
140. A cartel is a collusive agreement among
NARAYAN CHANGDER
(A) Total numbers of workers employed
a number of firms that is designed to
in a country
(A) expand output and lower prices but
(B) The general level of prices in the
not to a predatory level.
Malaysian economy
(B) restrict output and lower prices to a
predatory level. (C) The output of the entire economy
(C) restrict output and raise prices. (D) The output and price of chicken in
Malaysia
(D) expand output and raise prices.
(E) expand output and lower prices to a 146. Opportunity cost is the:
predatory level.
(A) Number of units sacrificed
141. The study of the economy with a large (B) Number of units gained
scope, looking at regional, national and (C) Cost of next best alternative foregone
global units.
(D) None of these
(A) Macro-Economics
(B) Micro-Economics 147. Owed by many people and people invest
(C) Economics in it by buying stocks.
(D) Supply and Demand (A) Sole Proprietorship
(B) Corporation
142. In order to save cost, the “Milk Indus-
try” should use more labour than machine. (C) Partnership
This statement refers to (D) Demand
(A) What product should be produce?
148. Self interest of the consumers lies in the
(B) Where product should be produce?
maximization of
(C) For whom product should be pro-
duce? (A) Profit
(D) How product should be produce? (B) Sales
(C) Satisfaction
143. amount of tax X quantity of good sold
(D) Wealth
(A) Tax revenue
(B) Consumer surplus 149. If a man buys a pair of pants for $10 and
(C) Producer surplus sells them for $20 he will make a
(D) Invisible hand (A) profit
(B) service
144. The ability and willingness to buy specific
quantities of goods in a given period of (C) donation
time at a particular price, ceteris peribus. (D) none of above
140. C 141. A 142. D 143. A 144. B 145. D 146. C 147. B 148. C 149. A 150. B
151. A
150. The degree to which tax falls on a partic- 155. If the demand for used cars decreases af-
ular person or group ter the price of a new car falls, used cars
(A) Surplus and new cars are
(B) Tax incidence (A) inferior goods
(C) Deadweight loss (B) substitute goods
(D) Elasticity (C) complementary goods
(D) normal goods
151. Consumers will buy more at low prices,
and less at high prices. This is known as: 156. Which statement defines economics?
(A) The law of demand (A) Answers the question what to pro-
duce.
(B) The law of supply
(B) A study about limited choices and un-
(C) Supply
limited resources.
(D) Demand
(C) A branch of knowledge concerned
152. Of the three major economic questions, with the government.
which of the following is the best exam- (D) A study focused only on production,
ple of a “What? ” question? consumption and transfer of wealth.
(A) Should automobiles be produced us-
157. This determinant of supply includes both
ing workers or robots?
raw material and labor. It also states that
(B) Should higher-income or lower- when the price of it decreases, the supply
income people buy SUVs? increases.
(C) Should we make faster microproces- (A) Government Tools
sors or pest-resistant corn? (B) Prices of Resources
(D) Should migrant workers or domestic (C) Technology
workers be used to pick grapes?
(D) Competition
153. Suppose producers expect the price of
158. VOCABULARY:Government payments to
their product to fall in the future. We
encourage or protect a certain type of eco-
would expect
nomic activity.
(A) Supply could increase or decrease
(A) Subsidy
(B) Supply to remain unchanged
(B) Supply
(C) Supply to decrease
(C) Price Ceiling
(D) Supply to increase (D) Minimum Wage
154. In a centrally planned economy, who or 159. Patrick works in the oilfield and the low
what decides on the allocation of scarce re- gas prices have caused his company to tem-
sources? porarily lay people off! He is experiencing
(A) Government what kind of unemployment?
(B) Households (A) Structural
(C) Firms (B) Cyclical
(D) Market forces (C) Seasonal
(E) Banks (D) Frictional
152. C 153. C 154. A 155. B 156. D 157. B 158. A 159. D 160. B

160. VOCABULARY:A maximum legal price (C) product market

that can be charged for a product. (D) businesses
(A) Price Floor
167. The law of supply indicates that:
(B) Price Ceiling
(A) producers will offer more of a product
(C) Subsidy at high prices that they will at low prices
(D) Minimum Wage (B) the product supply curve is downward
161. Normative economics deals with: sloping
NARAYAN CHANGDER
(C) consumers will purchase less of a
(A) facts
food at high prices than they will at low
(B) opinions prices
(C) both (a) & (b) (D) producers will offer more of a product
(D) none of these at low prices than they will at high prices
162. The formula for PES is 168. (2) Which of the following resources
(A) % change in P/% change in Qd would economists classify as “capital”?
(B) % change in P/% change in Qs (A) Raw Bauxite in a South African mine
(C) % change in Qd/% change in P (B) A hammer used in framing a house
(D) % change in Qs/% change in P (C) A worker hired to repair engines
(D) Trees used to make paper
163. If the price of printers goes down, what
happens in the market for ink cartridges? 169. The fundamental economic problem of
(A) Supply increases. having seemingly unlimited human wants
in a world of limited resources.
(B) Supply decreases.
(A) Trade-off
(C) Demand increases.
(B) opportunity cost
(D) Demand decreases
(C) PPF
164. An example of complementary goods (D) Scarcity
(A) Butter and margarine 170. There are 4 They are land, labor, cap-
(B) Public transport and cars ital and entrepreneurship.
(C) Pizza and Garlic Bread (A) Factors of Production
(D) Carrots and Parsnips (B) Market Economy
(C) Profit
165. A change in Fixed Costs affect which of
the following? (check all that apply) (D) Economics
(A) AFC 171. A deadweight loss declines in size when
(B) AVC a unit of output is produced for which
(C) ATC (A) marginal cost exceeds marginal ben-
(D) MC efit
(B) maximum willingness to pay exceeds
166. In this market, businesses supply re- minimum acceptable price
sources needed to produce goods and ser- (C) producer surplus exceeds consumer
vices. surplus
(A) resource market (D) consumer surplus exceeds producer
(B) stores surplus
161. B 162. D 163. C 164. C 165. A 165. C 166. A 167. A 168. B 169. D 170. A
171. B 172. C
172. Scarcity can best bedefined as (C) curve intersects the fixed cost curve
(A) A Shortage of a product (D) curve intersects the marginal rev-
(B) Where demand is greater than supply enue curve
(C) Unlimited wants vs Limited resources
178. What is it when a market is controlled
(D) Limited wants vs unlimited resources by one major supplier?
173. Economics may be described as a “so- (A) Monopolistic Competition
cialscience” since it deals with (B) Perfect Competition
(A) the economy (C) Oligopoly
(B) the environment (D) Monopoly
(C) human behaviour
(D) production and consumption 179. When there are only a few sellers of a
type of produce, like Smart phones, there
174. Situation in which goods and services are is said to be an?
plentiful but are prevented from making it (A) Monopoly
to the market place.
(B) Oligopoly
(A) Scarcity
(C) Monopolistic Competition
(B) Supply
(D) Perfect Competition
(C) Abundance
(D) Shortage 180. “When the price of a product rises,
consumers shift their purchases to other
175. Quantity Demanded is
products whose prices are now relatively
(A) Law of Demand lower.” This statement describes:
(B) An amount of a good that buyers are (A) an inferior good
willing to and able to purchase
(B) the rationing function of prices
(C) A sum of all individuals demands for a
good or service (C) the substitution effect
(D) An increase in one price (D) the law of supply
176. The key feature of monopolistic competi- 181. Partners who are only responsible up to
tion is the extent of their investment
(A) the small number of firms in the indus- (A) limited partnership
try. (B) trading partnership
(B) product differentiation (C) non-trading partnership
(C) the small number of firms in the indus- (D) special partnership
try.
(D) a lack of advertisement 182. For whom to produce means
177. Average total cost is minimized by pro- (A) Produce for those who are rich
ducing the level of output where the (B) Produce for those who are poor
marginal cost (C) Produce for those who needs the
(A) is minimized product
(B) curve intersects the average total (D) Do not produce for those who does
cost curve not need the product
173. C 174. D 175. B 176. B 177. B 178. D 179. B 180. C 181. A 182. A 182. B
182. C 182. D 183. D
183. The three basic categories of resources (B) Firms maximise profits and consumer
are land, labour and: maximise utility
(A) money. (C) Consumers minimise utility and firms
(B) time. maximise profits
(C) energy. (D) Workers maximise incomes and firms
(D) capital. minimise profits
189. If a new, huge oil reservoir was found

184. The demand for a product is said to be
NARAYAN CHANGDER
in Ohio, this would cause the curve for
inelastic with respect to price if:
oil and gas to shift
(A) consumers are largely unresponsive
(A) demand right
to a per unit price change
(B) demand left
(B) the elasticity coefficient is greater
that 1 (C) supply right
(C) a drop in price is accompanied by a (D) supply left
decrease in the quantity demanded 190. What will happen when there is short-
(D) a drop in price is accompanied by an term PROFIT in a market?
increase in the quantity demanded (A) Firms will enter the market, and
185. PES is always prices will rise.
(A) negative due to law of demand. (B) Firms will enter the market, and
prices will fall.
(B) positive due to law of supply.
(C) Firms will leave the market, and
(C) negative due to law of supply.
prices will rise.
(D) positive due to law of demand. (D) Firms will leave the market, and
186. An economic system in which consumers prices will fall.
and the government answer the three key 191. The Central Problem of an economy
economic questions. arises due to?
(A) Free Market Economy (A) A. Unlimited wants
(B) Mixed Market Economy (B) B. Limited resourses
(C) Command Economy (C) Either a or b
(D) Traditional Economy (D) Both a and b
187. The study of how consumers allocate 192. A market structure in which many compa-
their scarce resources to meet their wants nies sell products that are similar but not
and needs can best be described as? identical.
(A) Markets (A) Monopolistic Competition
(B) Consumerism (B) Oligopoly
(C) Economic Modeling (C) Monopoly
(D) Economics (D) Perfect Competition
(E) Scarcity
193. The fundamental condition of economics
188. Neo classical theory assumes that results from the combination of lim-
(A) Workers maximise profits and con- ited resources and unlimited wants.
sumers maximise utility (A) Scarcity
184. A 185. B 186. B 187. D 188. B 189. C 190. B 191. D 192. A 193. A
(B) Productivity (B) How to produce

(C) Microeconomics (C) For whom to produce
(D) Macroeconomics (D) None of these
194. What is an economic problem? 199. In the circular flow model, the product
(A) Problem of making optimum utiliza- market includes
tion of resouces (A) stores that sell goods and services to
(B) Making choice in the presence of households
scarcity (B) the government paying for public
(C) Problem of coice of techenique of pro- goods
duction (C) households selling their labor to busi-
(D) Problem of allocation of resources nesses
195. In the short run, a perfectly competitive (D) households receive income from busi-
firm’s economic profits nesses
(A) Must equal to zero, that is the firm 200. The basic problem of economics is
earns a normal profit
(A) scarcity
(B) Must be positive
(B) lack of choice
(C) Might be positive, negative (an eco-
nomic loss) or zero ( a normal profit) (C) shortages
(D) Must be negative, that is the firm (D) overabundance
must incur an economic loss
201. The law of demand is
196. A volcano erupts in Hawaii that destroys (A) The quantity of an item that is sup-
or severely damages many of the pineap- plied at a given price
ple orchards located there. What will be (B) The quantity of an item that is de-
the effect on price and quantity of pineap- manded at a given price
ples sold? (C) The quantity of an item that is desired
(A) price will fall and quantity will fall regardless of price
(B) price will fall and quantity will rise (D) The quantity of an not desired.
(C) price will rise and quantity will fall
(D) price will rise and quantity will also 202. Increase of resources implies that Pro-
rise duction possibility curve
(A) shifts to the right
197. A is a graph that lists prices on the
(B) shifts to the left
vertical axis and quantities on the horizon-
tal axis. (C) rotates to the right
(A) demand curve (D) none of these
(B) market demand 203. Suppose that there is an increase in input
(C) utility demand prices. We would expect
(D) demand schedule (A) Supply could increase or decrease
198. Which of these economic problem deals (B) Supply to remain unchanged
with technique of production? (C) Supply to increase
(A) What to produce (D) Supply to decrease
194. B 195. C 196. C 197. A 198. B 199. A 200. A 201. B 202. A 203. D 204. B
204. What is the curve that shows the maxi- 209. All of the following are determinants of
mum combinations of two outputs that an supply except:
economy can produce, given its available (A) technology
resources and technology? (B) prices of related goods
(A) Marginal Analysis Curve (C) producer expectations
(B) Production Possibilities Curve (D) consumers’ price expectations
(C) Technology
210. Which of the following is one of the five
NARAYAN CHANGDER
(D) Graph factors of production?
(A) productivity
205. Which is the following is a free good?
(B) goods
(A) A vaccination provided by the state
(C) entrepreneurship
without charge
(D) services
(B) Prizes of food items given away by a
supermarket 211. An economy operates on the PPC when
(C) Recycled paper (A) There is full & efficient utilization of
(D) Wind coming from the sea resources
(B) Inefficient utilization of resources
206. Which of the following market structures (C) Creation of more Employment
will have the most difficult entry of new (D) Inflow of FDI in to the economy
firms?
(A) monopoly 212. The problem of whom to produce means
(A) the choice between the goods to be
(B) monopolistics
produce
(C) oligopoly (B) The choice between the technique to
(D) perfect competition be used in production
(C) The choice to distribute the national
207. What determines if an item’s demand is income among individuals
elastic?
(D) All the above
(A) If an item is on sale
(B) If an item continues to be bought, de- 213. Economics as a subject deals with:
spite the rise in price (A) Nature & animals
(C) If an item stops being bought because (B) Rational man
of a rise in price (C) Human beings & their activities
(D) If an item is not on sale (D) None of these
214. The branch of economics that studies

208. What is the term for the principle that
decision-making by a single individual,
suppliers will normally offer more for sale
household, firm, industry, or level of gov-
at higher prices and less at lower prices?
ernment.
(A) law of supply (A) Macroeconomics
(B) supply schedule (B) Microeconomics
(C) law of demand (C) Shortage
(D) market demand (D) Surplus
205. D 206. A 207. C 208. A 209. D 210. C 211. A 212. C 213. B 214. B 215. B
215. Which of the following best describes the (B) Increase Supply
Law of Demand? (C) Decrease Demand
(A) As price goes down, demand goes (D) Decrease Supply
down. (and vice versa).
(B) As price goes down, demand goes up 220. Of the three big questions, what, how,
(and vice versa). and for whom, which of the following is
(C) As demand goes down, supply goes an example of a how question?
up. (A) Why do doctors and lawyers earn high
(D) As demand goes up, price becomes incomes?
elastic. (B) Why don’t we produce more small
cars and fewer gas guzzlers?
216. Why must every nation answer the three
fundamental economic questions? (C) Why do we use machines rather than
migrant workers to pick grapes?
(A) Because of increased international
trade and cooperation. (D) Why do college football coaches earn
more than professors?
(B) Because of the problem of scarcity.
(C) Because rich nations must subsidise 221. Peggy, a recent college graduate, decides
the development of poor nations. to look for a job instead of going to grad-
(D) Because some nations are more suc- uate school. If she is unable to find a job
cessful than others. that suits her interests right away, what
type of unemployment is she MOST likely
217. Why does average total cost eventually experiencing?
rise?
(A) structural
(A) Average fixed costs eventually begin
to rise at an increasing rate. (B) seasonal
(B) Average variable cost eventually be- (C) frictional
gin to rise at an increasing rate. (D) cyclical
(C) Average marginal costs eventually de-
crease. 222. Elasticity refers to
(D) none of above (A) how producers of goods and services
react to price changes
218. Sharon decided to open a dry-cleaning (B) how often the price of a good or ser-
business. She borrowed some money from vice changes when quantity demanded
her sister and took a loan from a bank. She changes
hired one helper. What is one disadvan-
(C) how consumers of goods and services
tage of Sharon’s business?
(A) no separation of ownership and con-
(D) how producers of goods and services
trol
(B) ease of organizing the firm
(C) unlimited liability 223. Total Revenue-Total Cost =
(D) double taxation (A) Profit
219. Iphones become more expensive. What (B) Revenue
will happen to Iphone covers? (C) Marginal Revenue
(A) Increase Demand (D) Variable Revenue
216. B 217. B 218. C 219. C 220. C 221. C 222. C 223. A 224. B

224. Which of the following basic economic 229. Which of the followings is not an assump-
problems is closely related to the tech- tion of PPC?
nique of production? (A) Resources in the economy are con-
(A) What? stant
(B) How? (B) The economy produces only two
(C) For whom? goods
(C) There is no change in the technique of
(D) Where?
production
NARAYAN CHANGDER
225. Examples of renewable goods would in- (D) Resources are equally efficient in pro-
clude? duction of both the goods
(A) Water, Coal, Gas and Oil 230. SSEMI 4 b:Which provides the greatest
(B) Solar, Natural Gas, Hydroelectric incentive for entrepreneurs to take risks?
(C) Oil, Coal and Solar (A) profits
(D) Solar, Wind and Hydroelectric (B) inflation
(C) prices
226. Other things being equal, which of the
(D) interest
following might shift the demand curve for
gasoline to the left? 231. Eataly’s sights set on China with possi-
(A) the discovery of vast new oil reserves ble joint-venture
in Alberta (A) Business news
(B) the development of a low-cost elec- (B) Economic news
tric automobile (C) Microeconomics
(C) an increase in the price of train and (D) Macroeconomics
air transportation
232. Labor costs are rising through the roof!
(D) a large decline in the price of automo-
Minimum wages are now at $25 an hour.
biles
This means even the basic item will need
227. For a market structure to be classified as to cost more to keep up with rising costs.
an oligopoly, what would characterize the What determinant of supply does this
firms that have control over the market? most relate to?
(A) A large number of firms (A) Change in Technology
(B) Change in Number of Sellers in the
(B) A small number of firms
Market
(C) Government firms
(C) Change in Cost of Factors of Produc-
(D) One single firm tion
228. The supply curve shows (D) none of above
(A) The amount of goods or services that 233. A listing of the specific quantities that
are supplied at a given market price. would be purchased at various prices is
(B) The amount of goods or services that known as
are consumed at a given market price. (A) Price Points
(C) The amount of goods or services that (B) Price Elasticity
are supplied at a given quantity. (C) Demand Schedule
(D) none of above (D) Demand Curve
225. D 226. B 227. B 228. A 229. D 230. A 231. A 232. C 233. C 234. A
234. Measure of profit which includes explict (C) There should not be an overpopulated
costs and depreciation of capital. country
(A) Accounting Profit (D) Income inequality should b ereduced
(B) Economic Profit
240. Max is studying for his spelling test. Un-
(C) Total Profit
fortunately, his favorite TV program is on
(D) Marginal Profit right now. If he studies for the test, he
will miss watching the show. Max decides
235. Let P = price, MR = marginal revenue,
to study for his test instead of watching
MC = marginal cost, and ATC = average
TV. What is the opportunity cost of his de-
total cost. In monopolistic competition,
cision?
which of the following most accurately de-
scribes the long-run equilibrium conditions (A) studying for a test
for a firm? (B) watching TV
(A) P>ATC, MR=MC, and P>MC (C) spelling test
(B) P=ATC, MR=MC, and P=MC (D) none
(C) P=ATC, MR=MC, and P>MC
241. Opportunity Cost is also known as the
(D) P=ATC, MR>MC, and P>MC
(A) best option.
236. Which of the following is a typical fixed (B) second best options.
cost?
(C) trade-off.
(A) utilities
(D) choices
(B) rent
(C) hourly labor 242. The relationship between the quantity of
(D) materials inputs used to make a good and the quan-
tity of output produced.
237. A market structure in which a few large (A) Diminishing Marginal Utility
firms dominate a market.
(B) Production Function
(A) Oligopoly
(C) Conjunction Junction
(B) Monopoly
(D) Economies of Scale
(C) Monopolistic Competition
(D) Perfect Competition 243. When the price of a good increases, the
quantity demanded
238. What is given up when a choice is made
(A) increases
(A) Scarcity
(B) decreases
(B) choice
(C) remains unchanged
(C) opportunity cost
(D) reverses
(D) resources
244. What is the price that both buyers and
239. Which of the following is an egg of posi-
sellers accept?
tive economy
(A) Supply price
(A) India should take steps to control ris-
ing prices (B) Equilibrium price
(B) There are inequalities of income in (C) Subsidized price
our economy (D) Demand price
235. C 236. B 237. A 238. C 239. A 240. B 241. B 242. B 243. B 244. B 245. A
245. If there is destruction of resources in an 251. An increase in output which arises from
economy the PPC one additional unit of input.
(A) Shifts towards left hand side (A) Marginal Cost
(B) Brings unemployment (B) Marginal Physical Product
(C) Shifts towards right hand side (C) Marginal Revenue
(D) None of the above (D) Marginal Input
246. A is a chart or table showing quanti- 252. Technology used to make cars improves.
NARAYAN CHANGDER
ties supplied at different possible prices. This will cause..
(A) supply schedule (A) Supply to Increase
(B) supply curve (B) Demand to increase
(C) market table (C) Supply to Decrease
(D) profit graph (D) Demand to Decrease
247. The uncompensated impact of one per- 253. SSEMI2 b:Whenever a company devel-
son’s actions on the well-being of a by- ops a new product, an equilibrium price
stander and quantity will eventually be deter-
(A) Opportunity cost mined by
(B) Externality (A) how much money is available in the
economy.
(C) Deadweight loss
(B) he government in their role as price
(D) Surplus setter.
248. Cardinal approach to utility is: (C) the interaction of sellers and produc-
(A) Comparable ers.
(B) Measurable (D) the interaction of buyers and sellers.
(C) Not measurable 254. Which is a feature of a perfectly compet-
(D) none of these itive market?
(A) Price differences between firms pro-
249. What factor of production’s function is to ducing the same product
make decisions and take risks?
(B) The industry’s demand curve is per-
(A) Capital fectly elastic
(B) Enterprise (C) Significant barriers to entry into the
(C) Land industry
(D) Labour (D) Products are standardized or homo-
geneous
250. A perfectly competitive firm is a price-
taker because 255. The Law of Supply states:
(A) the government sets its price (A) as price increases, supply increases
(B) it produces a differentiated product (B) as prices decrease, supply increases
(C) a larger firm sets the price for the in- (C) as price increases, quantity de-
dustry manded decreases
(D) intense competition prevents it from (D) as price decreases, quantity de-
influencing the market price manded decreases
246. A 247. B 248. B 249. B 250. D 251. B 252. A 253. D 254. D 255. A 256. C
256. Which of the following is not a re- (C) where the quantity of resources is suf-
source? ficient to meet all wants
(A) Land. (D) where people’s needs exceed other
(B) Labour. people’s resources.
(C) Money. (E) where the quantity of resources is suf-
(D) Capital. ficient to meet all needs.
257. Something that people consume that is 262. Which of the following is NOT
tangible “can be touched.” economist’s study?
(A) Service (A) Scarcity
(B) Good (B) Benefit
(C) Need (C) Choices
(D) Want (D) Incentives
258. In a , most economic decisions are
263. The law of demand refers to how
made by individuals looking out for their
own interests. (A) demand changes when people’s in-
(A) free exchange comes change
(B) market economy (B) demand changes when the prices of
substitutes and complements change
(C) privatized economy
(D) socialist market (C) the quantity demanded changes when
the price of the good changes
259. The relationship between quantity sup- (D) the price of the good changes when
plied and price is and the relationship people’s demand for the good changes
between quantity demanded and price is
264. When the U.S. government purchases a
(A) direct, inverse submarine from a company, the govern-
(B) inverse, direct ment has made a major transaction in the
(C) inverse, inverse (A) factor market
(D) direct, direct (B) public market
(C) product market
260. Problem of occurs when goods and
services are limited compared to man’s un- (D) foreign exchange market
limited want and desires.
265. An economic actor is
(A) surplus
(B) scarcity (A) Is a Hollywood actor
(C) choices (B) A person that uses money to buy
goods and services. An economic actor
(D) opportunity cost
uses these resources to shape an econ-
261. Scarcity is a situation: omy.
(A) where people’s needs exceed their re- (C) A person or unit able to use land, la-
sources. bor or capital. An economic actor uses
(B) where people’s wants exceed their re- these resources to shape an economy.
sources. (D) none of above
257. B 258. B 259. A 260. B 261. B 262. B 263. C 264. C 265. C 266. B
266. The branch of economics that studies (B) Desires

decision-making for the economy as a (C) Needs
whole.
(D) Choices
(A) Microeconomics
(B) Macroeconomics 272. Pure monopoly may be based on
(C) Positive Economics (A) Increasing return to scale
(D) Normative Economics (B) Control over the supply of raw mate-
NARAYAN CHANGDER
rials
267. The concept of pure monopoly was first
given by (C) Patent or government franchise
(A) Robinson (D) All of the above
(B) Stigler
273. Which of the following would best repre-
(C) Sraffa sent all “Factors of Production” that any-
(D) Chamberlain one starting a business would need to be
successful?
268. When a price ceiling is imposed in a mar-
ket: (A) Land, Labor, Entrepreneurship
(A) A persistent surplus results (B) Land, Labor, Capital and En-
(B) Sellers of the product are made bet- treprenuership
ter off (C) Labor, Capital and Financing
(C) Quantity supplied is greater than the (D) Capital, Labor and Land
quantity demanded
(D) A persistent shortage results 274. If marginal cost is less than the aver-
age total cost, then the average total cost
269. When the percent change in quantity de- curve will.
manded is greater than a percent change (A) Increase
in supply it is
(B) Decrease
(A) inelastic
(C) Not change
(B) elastic
(D) none of above
(C) complementary
(D) unit elastic 275. Tax levied on a good levied on sellers
270. What are all societies forced to do be- (A) Supply curve stays the same
cause of scarcity? SHOW ANSWER (B) Supply curve shifts upward
(A) Make production decisions (C) Supply curve shifts downwards
(B) Conserve resources (D) None of the above
(C) Limit resource use
(D) Charge large amount of money for 276. What do minimum wage laws impose on
available resources the market?
(A) surpluses
271. A good or service that people require for
survival such as food, water, shelter and (B) price floor
clothing are called? (C) price ceilings
(A) Wants (D) shortages
267. B 268. D 269. B 270. A 271. C 272. D 273. B 274. B 275. B 276. B 277. B
277. Sending one of your workers back to (A) Business news

school to learn accounting would best rep- (B) Economic news
resent which factor of production?
(C) Microeconomics
(A) Physical Capital
(D) Macroeconomics
(B) Human Capital
(C) Land 283. What is not an example of a substitute?
(D) Entrepreneurship (A) Train freight and truck freight
(B) Peanut butter and jelly
278. What will happen when there is short-
(C) Hershey’s and Nestle chocolate
term LOSS in a market?
(D) Microsoft Word and Google Docs
(A) Firms will enter the market, and
prices will rise. 284. The study of an entire economy or one of
(B) Firms will enter the market, and its principal sectors.
prices will fall. (A) Macroeconomics
(C) Firms will leave the market, and (B) Microeconomics
prices will rise.
(C) Scarcity
(D) Firms will leave the market, and
(D) Factors of Production
prices will fall.
285. Kathy, Sue, and Christina own a bakery.
279. If the demand for a good increases when
Each day all three women spend hours bak-
people’s incomes increase,
ing cakes, decorating cakes, and packaging
(A) the good is an inferior good cakes. Which economic concept would help
(B) the law of demand is violated them become more efficient?
(C) the good’s demand curve must be up- (A) Scarcity
ward sloping (B) Productivity
(D) the good is a normal good (C) Specialization
280. Which of these is not a physical asset? (D) Interdependence
(A) Stocks 286. (3) Which of the followingis NOT a con-
(B) Car sumer good?
(C) House (A) a bulldozer at a construction site
(D) Property (B) a Happy Meal at McDonalds
281. SSEMI 3 a:Related goods, income, and (C) a pack of Doritos in a vending machine
preferences are variables MOST LIKELY to (D) a television set for sale at an appli-
affect which part of a market? ance store
(A) supply
287. Why does economy exist in the world?
(B) demand
(A) Human wants for goods and services
(C) quantity supplied are unlimited
(D) quantity demand (B) Productive resources with which to
produce goods and services are limited
282. The Bank of England raises interest rates,
signals confidence in strengthening econ- (C) Both
omy. (D) None of the above
278. C 279. D 280. A 281. B 282. B 282. D 283. B 284. A 285. C 286. A 287. C
288. B
288. The branch of economics which studies 294. A nation in which the government makes
the economy as a whole all decisions about what gets produced,
(A) Micro Economics who it goes to and how much will be paid
(B) Macro Economics for it is often called a?
(C) positive Economics (A) Command Economy
(D) Normative Economics (B) Traditional Economy
(C) Mixed Market Economy
289. Study of behavior of individual house-
NARAYAN CHANGDER
holds, firms, and governments (D) Free Market Economy
(A) Microeconomics (E) Keynesian Economy
(B) Macroeconomics
295. Which of the following would entice a
(C) Economics
firm to enter an industry in the long run?
(D) none of above
(A) P=ATC
290. The good or service that you give up (B) P>ATC
when you make an economic choice is
(C) P<AVC
called
(D) P=MR
(A) opportunity cost
(B) economic choice 296. Human effort directed toward producing
(C) economic interdependence goods and services.
(D) economic specialization (A) land
291. Efficiency loss is another term for (B) labor
(A) Deadweight loss (C) goods
(B) Consumer surplus (D) capital
(C) Producer surplus
297. Economics is the study of
(D) Elasticity
(A) How society manages the unlimited
292. Why does no one firm dominate in a per- resources
fect competition?
(B) How to reduce our wants until we r
(A) Each firm produces so little of the satisfied
total supply that they cannot influence
(C) How society manages it’s scarce re-
prices
sources
(B) One firm will eventually dominate and
make it a monopoly (D) How to fully satisfied our unlimited
wants
(C) Each firm sells to different people
(D) No firm has an incentive to 298. Suppose consumers see a decrease in the
price of Coke. We would expect
293. Wants are
(A) Things you essential for survival (A) Demand could increase or decrease
(B) Food, clothing, shelter (B) The demand for Pepsi remains un-
(C) Desires that are not essential to sur- changed
vive (C) The demand for Pepsi to decrease
(D) Air, water, food (D) The demand for Pepsi to increase
289. A 290. A 291. A 292. A 293. C 294. A 295. B 296. B 297. C 298. C 299. B
299. Graphically, if the supply and demand 304. if there is an opportunity cost for a cer-
curves are linear, consumer surplus is mea- tain product, then
sured as the triangle (A) there is a money cost for the decision
(A) under the demand curve and below (B) Resources are unlimited
the actual price
(C) There is a sacrifice of something else
(B) under the demand curve and above
the actual price
(D) none of above
(C) above the supply curve and above the
actual price 305. The perpetual problem in economics is:
(D) above the supply curve and below the (A) the inability of people to work to-
actual price gether effectively.
(B) the inability to satisfy everyone’s
300. This is a type of business with two or
wants with the resources available.
more individuals involved.
(C) the gap between the income of the
(A) sole proprietorship
rich and the poor.
(B) partnership
(D) how to supply enough to earn a con-
(C) corportation sistent profit
(D) limited partnership
306. The central question in economics is how
301. The fundamental economic problem being to:
faced is: (A) deal with the problem of scarcity.
(A) Unlimited human wants (B) change government economic policy.
(B) Limited wants and unlimited re- (C) change people’s wants to match their
sources needs.
(C) Unlimited wants and scarcity of re- (D) manage money and become wealthy.
sources
(D) Limited wants and limited resources 307. Mowing lawns, washing the car and tak-
ing out the trash are all ways to earn
302. Will lead to a change along the supply money by
curve (A) selling a product
(A) Change in prices (B) providing services
(B) Change in costs of production (C) saving for college
(C) Change in taxes (D) none of above
(D) Change in international tariffs
308. The demand curve shows the relation-
303. Economics is ship between:
(A) studying goods, services, and how (A) money income and quantity de-
people can get them. manded
(B) studying trees, bushes, and other (B) price and production costs
plants. (C) price and quantity demanded
(C) studying animals and wildlife. (D) consumer tastes and the quantity de-
(D) studying food, and how food is made. manded
300. B 301. C 302. A 303. A 304. C 305. B 306. A 307. B 308. C 309. A
309. How can we measure the excess of dead- (B) consumer and producer interaction
weight loss? (C) by a point on a production possibili-
(A) Demand Curves ties curve
(B) Uncompensated Response (D) by the law of demand
(C) Substitution Effect
315. Benefit buyers get from participating in
(D) none of above
a market
310. Consider the following table:Production (A) Consumer surplus
NARAYAN CHANGDER
Possibilities: A B C D EBread (units): 0 1 (B) Producer surplus
2 3 4Butter (units): 10 9 7 4 0The oppor-
tunity cost of increasing bread production (C) Total surplus
from 2 to 3 units is units of butter. (D) Welfare economics
(A) 7
316. Which of the following illustrates the
(B) 2 concept of internal economies of scale?
(C) 4 (A) Falling average cost as output in-
(D) 3 creases
311. An increase in a firm‘s reputation can be (B) Falling average cost as the industry
represented by expands
(A) A rightward shift of the demand curve (C) Falling fixed cost as output increases
(B) A leftward shift of the demand curve (D) Rising average cost as output in-
(C) A rightward shift of the supply curve creases
(D) A leftward shift of the supply curve 317. Which of the following is not a major
component of a contemporary market sys-
312. Several Companies sell similar products
tem?
is called what type of competition?
(A) Money
(A) Perfect Competition
(B) Monopolistic Competition (B) Unemployment
(C) Monopoly (C) Trade
(D) Oligopoly (D) Specialization
313. How short run is defined in Economics? 318. In the long run
(A) As the time period where all factors (A) all input can be varied
of production are considered variable. (B) all inputs are fixed
(B) As the time period of up to 12 months. (C) some inputs are variable and other in-
(C) As the time period where at least one puts are fixed
factor of production is considered fixed. (D) outputs is fixed
(D) As the time period where the firm has
the flexibility to make production choices. 319. Variable Cost/Quantity =
(A) Marginal Variable Cost
314. SSEMI 2 b:How are equilibrium price and
quantity determined in most markets in (B) Average Fixed Cost
the U.S. Economy? (C) Average Variable Cost
(A) government sets the price (D) Marginal Total Cost
310. D 311. A 312. B 313. C 314. B 315. A 316. A 317. B 318. A 319. C 320. E
320. Another name for the type of economic (C) Unlimited Liability
system the United States has is called (D) Receives all profits
the?
(A) Command Economy 326. On the market demand and supply graph,
(B) Traditional Economy the vertical axis shows
(C) Socialist System (A) demand.
(D) Free Market Economy (B) equilibrium.
(E) Free Enterprise System (C) prices.
(D) quantity.
321. What is the formula for finding supply
function? 327. The example of machinery in a factory is
(A) Qs = c-dP an example of which of the 4 factors of
(B) Qs = c x dP production?
(C) Qs = c + dP (A) land
(D) Qs = c / dP (B) labor
(C) capital
322. What do households provide to the re-
source market?
(A) income 328. A perfectly competitive firm faces a de-
(B) money mand curve that is:
(C) people (A) parallel to the vertical axis.
(D) land, labor, capital (B) U-shaped
323. In general, the marginal benefit of eating (C) parallel to the horizontal axis
a 5th pizza is than the 1st pizza. (D) downward sloping.
(A) less
329. How does competition among buyers af-
(B) more fect price?
(C) same (A) Competition decreases the quality
(D) I don’t know which decreases the price
324. Why do all societies have to make deci- (B) Competition increases quality of prod-
sions about how resources will be used? ucts which increases price.
(A) People are greedy (C) Competition increases production
which increases the price.
(B) There are not enough resources for
those who want them (D) Competition increases demand which
increases price.
(C) Resources are too expensive for most
people 330. If there is a tax of $60 and the consumer
(D) Because there is a huge gap between burden is $10 what is the burden on the
the rich and poor producers?
325. What is the biggest disadvantage of a (A) $10
Sole proprietorship and a partnership? (B) $50
(A) Start Up Costs (C) There is not enough information
(B) Taxes (D) $60
321. C 322. D 323. A 324. B 325. C 326. C 327. C 328. C 329. B 329. D 330. B
331. B
331. What reason allows increasing returns 337. Brazil’s food inflation:don’t blame it all
to occur with production as one assess the on the weather
labor factor only? (A) Business news
(A) increasing costs (B) Economic news
(B) worker specialization
(C) Microeconomics
(C) underutilization
(D) Macroeconomics
(D) fixed resources
NARAYAN CHANGDER
338. Which of the following best illustrates
332. Why will scarcity continue to be a prob-
your marginal benefit from studying?
lem in the future?
(A) Prices will rise (A) The knowledge you gain from study-
ing 2 hours a night for a month
(B) Resources will always be finite
(B) The best things forgone by studying 2
(C) Needs will decrease in the future
hours a night for a month
(D) World population will fall
(C) What you are willing to give up to
333. For the law of supply, as price rises, study for one additional hour
what happens to quantity supplied? (D) What you must give up to be able to
(A) it goes up study for one additional hour
(B) it goes down
339. The resources for satisfying human
(C) it stays the same
wants are:
(D) it is not effected
(A) limited
334. In this market structure there are many (B) unlimited
buyers and sellers with identical products
(C) available at zero price
(A) perfect competition
(D) none of these
(B) monopolistic competition
(C) monopoly 340. What is the most common economic sys-
(D) oligopoly tem today?
(A) command
335. The choice between two goods or ser-
vices is known as (B) mixed
(A) scarcity (C) traditional
(B) opportunity cost (D) none of above
(C) economic choice
341. The circular flow model of a market econ-
(D) economic specialization omy shows
336. When the quantity demanded at a spe- (A) how profits are made
cific price exceeds the quantity supplied, (B) what inputs are required for what out-
what will result in the market? puts
(A) Equilibrium occurs (C) how many firms can support the
(B) A shortage occurs needs of how many households
(C) A surplus occurs (D) the interactions between households
(D) Supply increases and firms in the free market
332. B 333. A 334. A 335. C 336. B 337. B 337. D 338. C 339. A 340. B 341. D
342. A
342. The income elasticity of demand is a mea- 347. When you buy a PlayStation instead of
sure of the: an X-Box because the price of the PlaySta-
(A) relative responsiveness of quantity tion went up, this is an example of what?
demanded to changes in income. (A) Complements
(B) absolute change in demand yielded by (B) Substitutions
an absolute change in income.
(C) Elasticity
(C) slope of the income-consumption
curve. (D) Economics
(D) negative slope of a market demand
curve. 348. A surplus would be found
(A) In the bottom portion of the upward
343. What are the advantages to a market sloping supply curve
economy?
(B) Below the equilibrium point
(A) People are more likely to lose their
jobs (C) Above the equilibrium point
(B) Less income disparity than a com- (D) None of the above
mand economy
(C) One person gets to decide who gets 349. In perfect competition, each firm .
what (A) can influence the price that it charges
(D) More consumer choices than a com-
(B) produces as much as it can
mand economy.
(C) is a price taker
344. The study of a single factor of an
(D) faces a perfectly inelastic demand for
economy-such as individuals, households,
its product
businesses, rather than the economy as a
whole.
350. Which of the following best explains
(A) scarcity why firms experience Increasing Marginal
(B) microeconomics Returns?
(C) macroeconomics (A) Workers can specialize
(D) none of above
(B) Workers reach the limit of fixed re-
345. When CDs became popular, people sources
stopped listening to tape cassettes. This (C) Managers motivate workers to pro-
caused the curve for tape cassettes to duce more
shift
(D) Poor management leads to low moti-
(A) demand right vation
(B) demand left
(C) supply right 351. According to the Total Revenue Test for
(D) supply left elastic demand, as prices go , total rev-
enue goes
346. What is the importance of economics?
(A) Up; Up
(A) To learn a way of thinking
(B) To understand the society (B) Down; Up
(C) To be an informed citizen (C) Up; Down
(D) All of the above (D) Down; Down
343. D 344. B 345. B 346. D 347. B 348. C 349. C 350. A 351. C 352. B
352. A market in which profit opportunities (A) the substitution effect

are eliminated almost instantaneously. (B) the income effect
(A) open market (C) an increase in the demand for Nike
(B) efficient market soccer balls
(C) monopoly market (D) the price effect
(D) closed market 358. Bob currently earns $50, 000 per year
as a financial planner. If he quit his job and
353. which of these is a cause of shifting the opened an ice cream stand on the beach,
NARAYAN CHANGDER
demand curve to the right hand side if earning $25, 000 per year in accounting
goods are normal profit, what is his Economic Profit?
(A) increase in income of consumer (A) $25, 000
(B) increase in price of substitute goods (B) $50, 000
(C) decrease in price of complementary (C) $75, 000
goods (D) -$25, 000
(D) all of these
359. Consumers buy more of a good when its
354. If there is improved technique of Produc- price decreases and less when its price in-
tion in both the goods, how the PPC will creases. The desire for a product or service
be affected? (A) Law of Demand
(A) Leftward shift of PPC (B) Law of Supply
(B) Rightward shift of PPC (C) Consume
(C) Rotation of PPC (D) Produce
(D) None of these 360. When you buy a game system and games
together, this is an example of which eco-
355. The founder and father of the mixed mar-
nomic concept?
ket economic system?
(A) Complements
(A) Karl Marx
(B) Substitutions
(B) Adam Smith
(C) Elasticity
(C) John Maynard Keynes (D) Economics
(D) David Ricardo
361. The problem of ‘how to produce’ relates
356. An increase in the price of A cause an in- to:
crease in the demand for B. This indicates (A) the choice of technique
that A and B are (B) distribution of income
(A) substitute good (C) the choice of goods and services
(B) not related (D) none of above
(C) complementary goods
362. The study of how prices are set for indi-
(D) inferior good vidual goods is considered as an issue in
357. When the price of Nike soccer balls fell,
Ronaldo purchased more Nike soccer balls, (A) macroeconomics
and fewer Adidas soccer balls. Which of (B) microeconomics
the following best explains Ronaldo’s de- (C) descriptive economics
cision to buy more Nike soccer balls? (D) normative economics
353. D 354. B 355. C 356. A 357. A 358. D 359. A 360. A 361. A 362. B
363. Name a country that has a command (C) Mighty sword

leaning mixed economy. (D) Strawberry smoothie
(A) United States
369. Graphs provide a means to clearly show
(B) Great Britain economic relationships in two-dimensional
(C) Germany space.
(D) N. Korea (A) True
(B) False
364. When tradition and customs decide what
gets produced in an economy system then (C) Sometimes
you have which type of system? (D) Seldom
(A) Command Economy 370. An economic system in which tradition
(B) Traditional Economy and customs answer the three key eco-
(C) Mixed Market Economy nomic questions.
(D) Free Market Economy (A) Free Market Economy
(E) Centrally Planned Economy (B) Mixed Market Economy
(C) Command Economy
365. Which of the following best describes Al- (D) Traditional Economy
locative Efficiency?
(A) D = ATC 371. What would be most likely to increase
the equilibrium price of apartment rentals
(B) D = AVC
in a particular area?
(C) D = MC
(A) An increased supply of building mate-
(D) Run = DMC rials
366. Which of the following is characterized (B) A decrease in the availability of apart-
as ‘the point where the quantity of a good ments
supplied is the same as the quantity de- (C) A decrease in demand for apartments
manded of that good’? (D) A surplus of undeveloped land
(A) The S/D Similarity 372. VOCABULARY:The amount of any given
(B) The Equilibrium Price commodity available for sale at a given
(C) Price-Fixing time.
(D) Price Adjustment Point (A) Subsidy
(B) Demand
367. In the long run, a Perfectly Competitive
(C) Supply
Firm will..
(D) Price Floor
(A) Earn zero economic profit
(B) Earn an economic profit 373. Empirical economics aims to:
(C) Make an economic loss (A) Objectively describing and interpret-
(D) Shut down ing facts and economic issues with scien-
tific grounds.
368. Adam Smith’s “ “ guides the market (B) Make personal comments or subjec-
to the most efficient point (max total sur- tive views.
plus) (C) Explain the conduct of economic cells
(A) Deadweight loss in market types.
(B) Invisible Hand (D) There is no correct sentence.
363. D 364. B 365. C 366. B 367. A 368. B 369. A 370. D 371. B 372. C 373. A
374. When the price of good A rises, people (B) Price Ceiling
start to drink good B. In this case, what is (C) Subsidy
good B considered?
(D) Price-Fixing
(A) luxury good
(B) complementary good 380. List the four market structures in order
(C) substitute good from least competitive to most competi-
tive.
(D) normal good
(A) Oligopoly, Monopoly, Perfect Compe-
NARAYAN CHANGDER
375. If firms are entering an industry that tition, Monopolistic Competition
is monopolistically competitive, we would (B) Monopoly, Oligopoly, Monopolistic
expect Competition, Perfect Competition
(A) the demand for existing firms to shift (C) Monopoly, Monopolistic Competition,
rightward Perfect Competition, Oligopoly
(B) the demand for existing firms to be- (D) Perfect Competition, Oligopoly,
come more inelastic. Monopoly, Monopolistic Competition
(C) economic profits to rise for all firms
381. Law of demand and supply are good ex-
(D) the demand for existing firms to shift
amples of in economics.
leftward
(A) Cause and effect relationship
376. These are physical goods that are used to (B) Systemized body of knowledge
produce other goods (example:trucks and
(C) Capability of measurement
trains to transport goods).
(D) All of the options
(A) scarcity
(B) land 382. Microeconomics and Macroeconomics fo-
(C) capital cuses on the following in terms of employ-
(D) i have no clue ment:
(A) Employment Rate
377. Value of the next best alternative given
(B) Production
up for the alternative that was chosen.
(C) Individual Employment
(A) trade-off
(D) Supplies
(C) time 383. The problem of “what to produce” re-
(D) labor lates to:
(A) the choice of technique
378. “The max price a buyer will pay for a
good” (B) distribution of income
(A) Consumer surplus (C) market value of goods and services
(B) Producer surplus (D) the choice of goods and services
(C) Deadweight loss 384. Who is father of economics
(D) Willingness to pay (A) Alfred Marshall
379. VOCABULARY:The lowest legal wage (B) Adam Smith
that can be paid to workers. (C) JR Hicks
(A) Minimum Wage (D) Samuelson
374. C 375. D 376. C 377. B 378. D 379. A 380. B 381. A 382. A 382. C 383. D
384. B 385. A
385. What is another term for policy eco- (C) Cost of living
nomics? (D) Age of boss
(A) Normative economics
391. Those things used in making all goods
(B) Positive economics
and providing all services, and all of them
(C) Negative economics are scarce.
(D) Microeconomics (A) Resources
386. What happens when production is shut (B) Materials
down? (C) Capital
(A) Fixed Cost Increases (D) Finances
(B) Variable Costs Decline
392. Ramesh is working at a salary of 35,
(C) Variable Costs become zero 000 per month. He receives two job of-
(D) Fixed Costs become zero fers:1) To work as an accountant at a
salary of 30, 000 per month. 2) To work
387. In the context of rising prices, follow-
as a sales manager at a salary of 25, 000
ing statements are made by two peo-
per month.In the given case, his opportu-
ple:Udit:Prices in the economy are con-
nity cost will be:
tinuously rising.Shivam:The government
should take reasonable steps to control ris- (A) 25, 000
ing prices. (B) 30, 000
(A) Udit:Positive ; Shivam:Normative (C) 35, 000
(B) Udit:Normative ; Shivam:Positive (D) 65, 000
(C) Both are positive statements
393. Movement along the Demand curve to
(D) Both are normative statement the right is called
388. Someone who makes a product to sell is (A) decrease in demand
a (B) decrease in quantity demanded
(A) human resource (C) increase in demand
(B) consumer (D) increase in quantity demanded
(C) producer
394. The most fundamental concepts underly-
(D) trader ing the discipline of economics are:
389. The problem of “What to Produce” is re- (A) scarcity and making an efficient
lated to choice.
(A) Choice of Goods to be produced (B) supply and demand.
(B) Choice of technique of production (C) money, stocks and bonds.
(C) Choice of group of Consumers (D) inflation and unemployment.
(D) None of these 395. On the demand and supply graph, the
390. Which of these factors do you not need horizontal axis shows
to take into consideration financially when (A) demand.
choosing a new job? (B) equilibrium.
(A) Salary (C) prices.
(B) Benefits (D) quantity.
386. C 387. A 388. C 389. A 390. D 391. A 392. B 393. D 394. A 395. D 396. B
396. C
396. Gold demand slides to eight-year low in 401. If farmers stopped growing potatoes be-
third quarter of 2017. cause it was too hard, this would cause
(A) Business news the curve for Grippo’s to shift
(B) Economic news (A) demand right
(C) Microeconomics (B) demand left
(D) Macroeconomics (C) supply right
(D) supply left
397. A rational choice is
NARAYAN CHANGDER
402. Value to buyers minus cost to sellers
(A) the best thing you must forgo to get
something (A) Consumer surplus
(B) what you are willing to forgo to get (B) Producer surplus
something (C) Total surplus
(C) made by comparing marginal benefit (D) Deadweight loss
and marginal cost
403. Why are some Monopolies allowed to
(D) the best for society
exist in our society?
398. The process by which one substantially (A) Geography:it may be the only busi-
improves or adds to a product is called? ness in a given area
Example:improving an iPad with a better (B) Government:only the government
camera or making it thinner. provides certain services
(A) Productivity (C) Utilities:sometimes only 1 company
(B) Innovation owns the utilities in an area
(C) Production (D) All of the Above
(D) Invention 404. These two are present in scarcity.
(E) Engineering (A) Unlimited wants and needs
(B) Limited wants and needs
399. Which of the following is NOT a factor of
production? (C) Unlimited Resources
(A) Land resources (D) Limited Resources
(B) Labor 405. Average revenue (AR) is the same thing
(C) Entrepreneur as
(D) Market (A) price per unit
(B) TR/Output
400. SSEMI 4 c:Assume Company 1 and Com-
(C) the extra revenue received as a result
pany 2 operate as an oligopoly. Which
of selling one more unit of output
statement BEST represents this?
(D) Total revenue less marginal revenue
(A) They own many different “brands”
(B) They are major corporations with 406. Economics is the study of how
stockholders (A) we choose to use unlimited re-
(C) They control over 75% of the market sources.
(D) They have products that are different, (B) unlimited resources are used to sat-
but are marketed the same way isfy scarce wants.
397. C 398. B 399. D 400. C 401. D 402. C 403. D 404. A 404. D 405. A 406. D
407. A
(C) society uses abundant resources to 412. Economic problem arises due to
satisfy unlimited desires. (A) Limited resources
(D) scarce resources are used to satisfy (B) Unlimited wants
unlimited wants.
(C) Alternative uses of resources
407. What is meant by opportunity cost? (D) All of the above
(A) The next best alternative foregone
(B) The cost of the item selected 413. On major advantage of a corporation is:
(C) The cost of exploring business oppor- (A) Always have profits
tunities (B) Limited Liability
(D) The labour used in producing the (C) minimum failure
product (D) All of the above
408. Large number of buyers and sellers are
the characteristics of which type of mar-
a monopoly?
ket
(A) A national market for packaged meat
(A) Perfect competition
(B) A large oil company in one state
(B) Monopoly
(C) Monopolistic competition (C) A transcontinental railroad line
(D) Oligopoly (D) One company owning the majority of
the electric power plants
409. Tax on a good levied on buyers
(A) Demand curve shift downward 415. Which form of business organization is
easiest to organize but is LEAST able to
(B) Demand curve shift upward
benefit from specialization?
(C) Supply curve shift downward
(A) sole proprietorship
(D) Supply curve shift upward
(B) partnership
410. The founder and father of the free mar- (C) limited partnership
ket economic system?
(D) corporation
(A) Karl Marx
(B) Adam Smith 416. Scarcity refers to limitation of in re-
(C) John Maynard Keynes lation to for a commodity.
(D) David Ricardo (A) Demand, sale
(B) Demand, supply
411. SSEMI 4 a:Jane and Jill run a photogra-
phy business as a partnership. They are (C) Supply, Demand
trying to decide if they wish to form a (D) None of these
corporation. If they decide to incorporate,
what will be a new disadvantage they will 417. What type of market is it when there in
face? which there is no competition?
(A) double taxation (A) Buyer’s market
(B) unlimited liability (B) Oligopoly
(C) sharing of profits (C) Free Market
(D) ease of startup (D) Monopoly
408. A 408. C 409. A 410. B 411. A 412. D 413. B 414. D 415. A 416. C 417. D
418. A
418. It is comes from Greek word mikros, (C) Theory of Relativity

meaning “small” (D) Price goes up quantity demanded
(A) Micro goes down
(B) Microeconomics
424. What is the goal of a firm?
(C) Economics
(A) to make profits
(D) none of above
(B) to maximize profits
419. “We cannot have all the things we (C) to maximize revenue
NARAYAN CHANGDER
want”. The resources available to satisfy (D) none of the above
our wants are, at any time, limited in sup-
ply:The statement reflects the concept of 425. Which of the following are factors of pro-
duction?
(A) opportunity cost (A) Animals
(B) choices (B) Land
(C) scarcity (C) Labour
(D) unemployment (D) Enterprise
(E) Capital
420. Bank of America to shift 125 British jobs
to Ireland ahead of Brexit (select three) 426. In the 1990s, AT & T controlled 80%
(A) Business news of the phone industry and was the ONLY
(B) Economic news provider of long distance phone service.
This is an example of
(C) Microeconomics
(A) Perfect Competition
(D) Macroeconomics
(B) A monopoly
421. The characteristic of oligopolistic firms (C) Oligopoly
that makes them different from all other (D) Monopolistic Competition
types of firms is that oligopolistic firms:
(A) Advertise their products 427. Will lead to a change along the demand
(B) Consider each other’s decisions curve
(C) Produce differentiated products (A) Change in prices
(D) Face high barriers to entry (B) Change in firm’s reputation
(C) Change in consumer preferences
422. Under the monopoly MC is (D) none of above
(A) More than the price
(B) Less than the price 428. A rational person
(C) Equal to the price (A) buys the cheapest products at all
times
(D) All of the above
(B) undertakes actions which produce
423. Law of Supply marginal social benefits that exceed
(A) Tendency of suppliers to offer more of marginal social costs.
a good at a higher price (C) considers the marginal utility gained
(B) Consumers buy more of a good when from an action and chooses those activi-
its price decreases and less when its price ties which generate the greatest utlity
increases (D) none of these answers.
419. C 420. A 420. B 420. D 421. B 422. B 423. A 424. B 425. B 425. C 425. D
425. E 426. B 427. A 428. C 429. C
429. When the price of a good or service is (C) Economic Profit > 0
high consumer demand will usually be (D) MR > MC
(A) high
(B) unpredictable 435. What drives the circular flow model?
(C) low (A) success
(D) average (B) profit
(C) taxes
430. A market structure in which a large num- (D) monetary policy
ber of firms all produce the same prod-
uct and no single seller controls supply or 436. The efficient scale of production occurs
prices. when
(A) Monopoly (A) marginal cost is equal to average to-
(B) Monopolistic Comeptition tal cost.
(C) Oligopoly (B) marginal cost is less than average
(D) Perfect Competition fixed cost.
(C) marginal cost is less than average
431. When there is only one seller of a good variable cost.
or service, they are said to have a?
(D) marginal cost is greater than average
(A) Monopoly total cost
(B) Oligarchy
(E) marginal cost is less than average to-
(C) Monopolistic Competition tal cost
437. Positive economics involves statements
432. Which type of economy has central own- which are:
ership of property, centrally-planned econ- (A) verifiable
omy, and lack of individual choice?
(B) not verifiable
(A) Free Market Economy
(C) giving suggestions
(B) Mixed Economy
(D) none of these
(C) Command Economy
(D) Traditional Economy 438. If the demand for digital cameras in-
creases when consumers’ incomes rise,
433. A monopoly is a market structure in then digital cameras are
which
(A) a normal good
(A) a single firm exercises its power over
(B) an inferior good
smaller firms
(B) a single firm produces a product with (C) a substitute good
a wide variety of very close substitutes (D) a complement to video cameras
(C) each firm is run by a small proprietor 439. Which of the following factors is a char-
(D) there is only one firm producing a acteristic of monopolistics competition?
product which has no close substitutes
(A) Large number of small sellers
434. Normal Profit is when (B) producer of identical products
(A) TR = TC (C) price maker
(B) TR = TVC (D) a firm that practices barriers to entry
430. D 431. A 432. C 433. D 434. A 435. B 436. A 437. A 438. A 439. B 440. B
440. Entrepreneurs do all of the following EX- 446. Shaniq consumes only magazine and CDs.
CEPT Her income equals $60 per month. CDs
(A) bear risk from business decisions are $12 each and magazines are $5 each.
What is the equation for her budget line?
(B) own all the other resources
(A) $60 = Qm + QCD
(C) organize labor, land, and capital
(B) $60 = $12Qm + $5QCD
(D) none of above
(C) 12 =-2Qm + 6
441. Printers and ink cartridges are typically
NARAYAN CHANGDER
(D) $60 = 12QCD + 5Qm
purchased together. Economists would call
these 447. The excess demand is a situation in
(A) Stubstitues which the demand for a product or service
(B) Complements exceeds its supply in a market.
(C) Elastic (A) Surplus
(D) Inelastic (B) Shortage
(C) Production
442. A price ceiling is a price
(D) Equal
(A) that creates a surplus of the good
(B) below which a seller cannot legally 448. A country’s system for deciding what
sell gets produced to meet its people’s needs
(C) above which a seller cannot legally and wants.
sell (A) Economic Challenge
(D) Both answers A and B are correct (B) Economic Course
(C) Economic System
443. Assumption of PPC is/are:
(D) Economic Process
(A) There are only two goods
(B) Resources are fully employed 449. Iceberg & romaine are two different
(C) Technology is given types of lettuce. For most consumers, ice-
berg and romaine are
(A) complements
444. Tangible objects that can satisfy people’s (B) substitutes
wants.
(C) inferior goods
(A) land
(D) resources
(B) labor
(C) capital 450. A decrease in supply or a shift of the sup-
(D) goods ply curve to the left:
(A) If more suppliers enter the market
445. Slope of production possibility curve is place.
(A) Straight line (B) A fall in the cost of an input occurs.
(B) Convex to the point of origin (C) If government ends regulation.
(C) Concave to the point of origin (D) If government places an excise tax on
(D) None of these goods.
441. B 442. C 443. D 444. D 445. C 446. D 447. B 448. C 449. B 450. D 451. A
452. B
451. VOCABULARY:The combination of desire, 456. Assuming that peanut butter and jelly
ability, and willingness to buy a product. are complementary goods and consumers
(A) Demand see an increase in the price of peanut but-
ter, we would expect
(B) Supply
(A) The demand for jelly to decrease
(C) Equilibrium Price
(B) The demand for jelly to increase
(D) Price Floor
(C) Demand could increase or decrease
452. Opportunity Cost is (D) demand for jelly to remain unchanged
(A) Number of units of a commodity sac- 457. Which of the following is NOT the factor
rificed affecting the timing of redevelopment
(B) Value of the next best alternative ac- (A) Tenure
tivity forgone (B) Statutory rights
(C) Number of units of a commodity (C) Developer’s planning
gained
(D) Landowner’s inertia
(D) None of these
458. Game theory is used to explain
453. The value of goods expressed in money (A) why firms price discriminate
terms is
(B) how monopolies evolve into
(A) Revenue oligopolies
(B) Market (C) strategic behavior of firms in
(C) Price oligopoly
(D) Cost (D) profit maximization in monopoly
(E) price leadership of monopolistic com-
454. Consider the market for cellular phones. petition
Which of the following shifts the demand
curve leftward? 459. Oil, natural gas, coal and human labor
are all examples of what?
(A) studies showing using cellular
phones can cause brain cancer (A) Marginal Inputs
(B) a decrease in the price of cellular (B) Variable Costs
phones (C) Fixed Costs
(C) a decrease in the quantity demanded (D) Productive Resources
of cellular phones
460. VOCABULARY:The lowest legal price
(D) an increase in the services provided that can be paid for a good or service.
by cellular phones, such as text messag-
(A) Price Floor
ing
(B) Price Ceiling
455. A point inside the PPC indicates (C) Minimum Wage
(A) Full utilization of resources (D) Subsidy
(B) Efficient utilization of resources 461. If total product is at a maximum, the
(C) Unemployment (A) average product must be falling and
(D) Economic Growth be equal to zero
453. C 454. A 455. C 456. A 457. C 458. C 459. D 460. A 461. D 462. A
(B) average product must equal marginal 467. Which market structure involves selling
product identical products?
(C) marginal product must be greater (A) Perfect Competition
than zero and must be falling (B) Monopolistic Competition
(D) marginal product must be falling and (C) Oligopoly
be equal to zero
(D) Monopoly
462. A resource used to produce goods and
468. Mrs. Castro works as a teacher in a pub-
NARAYAN CHANGDER
services.
lic school. What could be a benefit from
(A) Factors of Production her work as a public servant?
(B) Capital Resource (A) Free school supplies
(C) Capital Good
(B) Shorter hours of work
(D) Production Possibilities Curve
(C) Better retirement plan
463. What is the difference between Account- (D) Immediate access to holidays
ing (Normal) Profit and Economic Profit?
469. Unlimited wants but limited resources
(A) Merchandise Costs
best describes which basic economic con-
(B) Opportunity Cost cept?
(C) Labor Cost (A) Supply
(D) Expenses
(B) Demand
464. Which of the following is the best defini- (C) Elasticity
tion for Marginal Cost? (D) Scarcity
(A) The cost of producing more units (E) Shortage
(B) The cost of producing one additional
unit 470. One reason why the quantity of a good
(C) Fixed costs demanded increases when its price falls is
that the:
(D) Variable Costs
(A) price decline shifts the supply curve
465. An increase in taxes can be represented to the left
by (B) lower price shifts the demand curve
(A) A rightward shift of the demand curve to the left
(B) A leftward shift of the demand curve (C) lower price shifts the demand curve
(C) A rightward shift of the supply curve to the right
(D) A leftward shift of the supply curve (D) lower price increases the real in-
comes of buyers, enabling them to buy
466. Which of the following does not illus- more
trate the concept of profit maximisation?
(A) MR=MC 471. “How allocation of resources affects eco-
nomic well-being”
(B) The difference between TR and TC is
the greatest (A) Consumer surplus
(C) Economic profit is at least zero or (B) Producer surplus
greater (C) Welfare economics
(D) Total revenue is maximised. (D) Deadweight loss
463. B 464. B 465. D 466. C 466. D 467. A 468. C 469. D 470. D 471. C 472. C
472. All of the following are part of the 4 fac- (C) For whom to produce
tors of production EXCEPT (D) none of above
(A) land
478. The strengthening dollar isn’t going to
(B) labor
last, says portfolio manager
(C) food
(A) Business news
(D) capital
(B) Economic news
(E) enterpreneurship
(C) Microeconomics
473. Which of the following is an example for (D) Macroeconomics
positive statement?
(A) Petrol price should be decreased by 479. A change in quantity demanded is shown
the government (A) at various points on the demand curve
(B) Government ought to provide tax re- (B) with a new demand curve drawn
duction for poor above or below the original demand curve
(C) Price and demand is negatively re- (C) with a vertical line
lated (D) none of above
(D) Minimum wage should be increased
480. What happened to a supply curve when
474. Revenue generated by producing one ad- supply goes down?
ditional unit of product. (A) moves left
(A) Marginal Revenue (B) moves rights
(B) Marginal Profit (C) moves up
(C) Total Revenue (D) moves down
(D) Average Revenue
481. The amount a firm receives for the sale
475. which of the following is the economic of its output. P x Q =
activity? (A) Profit
(A) Production (B) Total Revenue
(B) Consumption (C) Marginal Revenue
(C) Exchange (D) Average Profit
(D) All of these
482. For an unregulated monopolist, the
476. What do product markets provide for profit-maximizing quantity will always
consumers according to the circular flow be:
model? (A) in the elastic region of the demand
(A) goods and services curve
(B) only goods (B) where marginal revenue equals price
(C) only services (C) where price equals average total cost
(D) taxes (D) where the marginal cost curve inter-
sects the demand curve
477. The problem of deals with technique
of production. 483. Which of the following is NOT the char-
(A) What to produce acteristics of a property?
(B) How to produce (A) Divisible
473. C 474. A 475. D 476. A 477. B 478. B 478. D 479. A 480. A 481. B 482. A
483. A 484. C
(B) Longevity 489. Lucas fixes his friend’s sink. He is pro-

(C) Unique viding a
(A) trade
(D) Durable
484. Positive statements are (C) product
(A) macroeconomic. (D) service
(B) microeconomic. 490. The monopoly supply curve cannot be
NARAYAN CHANGDER
(C) statements of description that can be drawn simply because
tested. (A) The monopolists itself control price
(D) statements of prescription that in- (B) He has no rivals
volve value judgments. (C) The demand is indeterminate
485. Reductions of combined consumer and
producer surplus 491. How marketing built Lego into the
world’s favourite toy brand
(A) Deadweight loss
(A) Business news
(B) Elasticity (B) Economic news
(C) Tax incidence (C) Microeconomics
(D) Surplus (D) Macroeconomics
492. If consumer incomes increase, the de-
486. When a major car company lowers its
mand for product X:
prices, other car makers will probably
(A) will necessarily remain unchanged
(A) maintain existing prices.
(B) may shift either to the right or left
(B) raise their prices. (C) will necessarily shift to the right
(C) go out of business. (D) will necessarily shift to the left
(D) lower their prices.
493. The definition of Scarcity is
487. What type of factor of production is a (A) An unlimited amount of resources to
road? meet limited wants and needs
(B) A limited amount of resources to meet
(A) Capital
unlimited wants and needs.
(B) Enterprise (C) When people use time and energy to
(C) Labour create events
(D) Land (D) a city where individuals commit them-
selves to unlimited wants and needs
488. All the following are the Basic Economic
494. Tax on a good levied on buyers or on sell-
Problems EXCEPT
ers
(A) What product should be produce? (A) Same outcome:a price wedge
(B) Where product should be produce? (B) Price paid by buyers rises
(C) For whom product should be pro- (C) Price received ny sellers falls
duce? (D) Lower quantity sold
(D) How product should be produce? (E) All of the above
485. A 486. D 487. A 488. B 489. D 490. A 491. A 492. C 493. B 494. E 495. D
495. The production possibility curve may be 500. What is the best example of scarcity
defined as (A) The restuarant is not crowded tonight
(A) possible combinition of goods to be (B) The school parking lot only has 150
consumed spaces but 200 students want to park
(B) possible combinition of goods to be there
produced (C) There are 500 houses in the subdivi-
(C) possible combinition of goods to be sion and 250 of them are occupied
produced and consumed (D) A person decided to dye her hair
blonde instead of red
(D) possible combinition of goods to be
produced at a given level of resource and 501. VOCABULARY:Market structure with
given technology. only a single seller of a particular prod-
uct.
496. Which type of business can only be
(A) Oligopoly
owned by one person?
(B) Demand
(A) partnership
(C) Supply
(B) corporation
(D) Monopoly
(C) entrepreneurship
(D) sole proprietorship 502. Which of the following statements be-
longs to macroeconomics:
497. If the production of a good generates a (A) The unemployment rate in many coun-
positive externality, the government can tries is very high.
increase allocative efficiency by: (B) The average GDP growth rate in the
(A) taxing the producer of the good period of 2003-2011 in Vietnam was about
7%.
(B) setting a price ceiling to encourage
production of the good (C) Inflation rate in Vietnam is about 12%
per year during 2007-2011.
(C) subsidizing the producer of the good
(D) All three statements are correct.
(D) prosecuting firms that produce the
good without proper permit 503. An economic system in which only con-
sumers own the factors of production and
498. “All things remain unchanged” in Latin answers the three key economic ques-
phrase means tions.
(A) Latina antenna (A) Free Market Economy
(B) ceteris paribus (B) Mixed Market Economy
(C) non tammen sufficit (C) Command Economy
(D) honoris causa (D) Traditional Economy
504. Does an increase in Fixed Costs affect a

499. Das Capital was written by
firm’s output?
(A) Marx (A) Yes
(B) Hayek (B) No
(C) Smith (C) Maybe
(D) Keynes (D) none of above
496. D 497. C 498. B 499. A 500. B 501. D 502. D 503. A 504. B 505. C
505. Which of the following is a microeco- (C) Resources, goods, and interest
nomics statement? (D) Resources, goods, and services
(A) the real domestic output increased by
2.5 percent last year. 511. Which of the following would eliminate
(B) Unemployment was 9.8 per cent of scarcity as an economic problem?
the labour force last year. (A) Moderation of people’s competitive
(C) The price of wheat declined last year. instincts.
(D) The general price level increased by 4 (B) Discovery of sufficiently large new en-
NARAYAN CHANGDER
per cent last year. ergy reserves
506. Scarcity is a problem: (C) Resumption of steady productivity

growth.
(A) that only poor people face.
(D) Economic scarcity cannot be elimi-
(B) because human wants are limited
nated as long as the resources are lim-
while resources are unlimited.
ited.
(C) because human wants are unlimited
while resources are limited. 512. Which of the following will make PES
(D) only in third world countries. price inelastic?
507. Scare means (A) Lengthy production process
(A) enough (B) Large volumes of stock available
(B) missing (C) Excess capacity
(C) limited (D) Time
(D) abundant
513. Selling goods and services is an example
508. VOCABULARY:Agreement of compet- of
ing businesses to set specific prices of (A) Free Enterprise
goods/services.
(B) Freedom of Speech
(A) Price Ceiling
(C) Free Services
(B) Price Floor
(D) none of above
(C) Demand
(D) Price-Fixing 514. Two types of resources?
509. What is it called when a product loses (A) Renewable and Replaceable
value over time? (B) Non-Renewable and Usable
(A) Depreciation (C) Non-Renewable and Renewable
(B) Inflation (D) Renewable and Non-Replaceable
(C) Assets
(D) Growth 515. Supply means that a seller is and
to sell a good.
510. In the United States economy, there is a
(A) willing and happy
circular flow of what three things between
households, businesses, and markets? (B) willing and able
(A) Resources, stocks, and bonds (C) willing and hopeful
(B) Resources, dividends, and taxes (D) none of above
506. C 507. C 508. D 509. A 510. D 511. D 512. A 513. A 514. C 515. B 516. D
516. This is the best alternative that we forgo, (C) TFC = TVC+TC
or give up, when we make a choice or a de- (D) TC =TVC x TFC
cision.
(A) Efficient market 522. Allocative efficiency occurs only at that
output where
(B) Marginalism
(A) marginal benefit exceeds marginal
(C) Scarce cost by the greatest amount
(D) Opportunity cost (B) consumer surplus exceeds producer
517. What defines average variable cost? surplus by the greatest amount
(A) total cost divided by the quantity of (C) the combined amounts of consumer
the variable factor employed surplus and producer surplus are maxi-
mized
(B) total variable cost divided by the quan-
tity of the variable factor employed (D) the areas of consumer and producer
surplus are equal
(C) total variable cost divided by the out-
put produced 523. Which of the following are needs rather
(D) the addition to total variable cost by than wants? Choose three.
producing one more unit of output (A) iPhone
(B) Trousers
518. A change in Variable Costs affect which
of the following? (check all that apply) (C) Five Guys burger
(A) AFC (D) Water
(E) Bread
(B) AVC
(C) ATC 524. Labour-intensive techniques are chosen
(D) MC in a:
(A) Labour-surplus economy
519. How many firms and of what size are
(B) Capital-surplus economy
there in a perfect competition?
(C) Developed economy
(A) Many, big
(D) Developing economy
(B) Many, small
(C) Few, big 525. This can be a price control that is im-
(D) 2-5, small plemented above equilibrium price, associ-
ated with Minimum wage
520. What type of economy has a private and (A) Price ceiling
public sector, the characteristics of a free (B) Price Floor
market, and is the most common economic (C) Price of goods
system today?
(D) Price redundant
(A) Free Market Economy
(B) Mixed Economy 526. New technology advances the rate at
(C) Command Economy which furniture can be assembled. Why
does this change the supply?
(A) Change in cost of production
521. Which of the following is correct? (B) Changes in number of producers
(A) TVC = TC-TFC (C) Changes in expectations
(B) TC = TVC-TFC (D) none of above
517. C 518. B 518. C 518. D 519. B 520. B 521. A 522. C 523. B 523. D 523. E
524. A 525. B 526. A 527. A
527. The government does not interfere in the 533. Which of the following is concerned with
process of decision making under: microeconomics?
(A) market economy (A) the unemployment rate decrease by
(B) centrally planned economy 30%
(C) mixed economy (B) In 2017, the national income of a
(D) all of these country is RM23, 400 milliion.
528. In a market economy, who decides on the (C) The price of chicken increases signifi-
cantly during Hari Raya season.
NARAYAN CHANGDER
prices of goods and services?
(A) government (D) The economic growth of the country
(B) buyers and sellers is expected to be 6% in 2019.
(C) firms
534. For the law of demand, as price rises,
(D) local leaders what happens to quantity demanded?
529. Who are the main economic agents? (A) it goes up
(A) Households, consumers, companies (B) it goes down
and tax payers (C) it stays the same
(B) Consumers, companies and exporters
(D) it is not effected
(C) Government, firms and importers
(D) Households, firms and government 535. Total Costs / Quantity =
(E) Households, tax payers and con- (A) Marginal Cost
sumers
(B) Average Total Cost
530. Which of the following is the characteris- (C) Implicit Cost
tic of Free Market Economy?
(D) Explicit Cost
(A) Private ownership of resources.
(B) Central planning authority 536. Average fixed cost curve will take the
(C) Public ownership of resources shape of
(D) Promote social justice. (A) Rectangular hyperbola
531. Check both items that pertains to how (B) Straight line
microeconomics and macroeconomics view (C) U-shapedd.
INCOME.
(D) Upward rising
(A) Individual Income
(B) Inflation 537. Approach favored by Adam Smith “Fa-
(C) National Income ther of Economics” in which he said that
(D) Deflation the government needed to keep its hands
off the economy and let buyers and sellers
532. This is a factor of production that is do their thing!
about all that naturally occurs in the na-
(A) Invisible Hand
ture.
(B) Invisible Head
(A) Capital
(B) Entrepreneur (C) Laissez-Faire
(C) Labor (D) Glass Ceiling
(D) Land (E) Market Place
528. B 529. D 530. A 531. A 531. C 532. D 533. C 534. B 535. B 536. A 537. C
538. A
538. Situation in which the amount of some- 544. In the long run, new firms will enter a
thing available is insufficient to satisfy the monopolistically competitive industry:
desire for it (A) provided economies of scale are be-
(A) Scarcity ing realized.
(B) Economics (B) even though losses are incurred in
(C) Demands the short run.
(D) none of above (C) until minimum average total cost is
achieved.
539. Consumer surplus increases as price
(D) until economic profits are zero.
(A) Increases
(B) Decreases 545. Which of the following is a characteris-
(C) Stays the same tic of monopolistic competition in the long
(D) Rises run?
(A) Efficiency
540. A surplus occurs when
(B) Homogeneous products
(A) the quantity demanded exceeds the
the quantity supplied (C) Zero economic profits
(B) there is equilibrium (D) No government intervention
(C) the quantity supplied exceeds the
546. Economists point out that scarcity con-
quantity demanded
fronts
(D) the quantity supplied equals the the
quantity demanded (A) the rich but not the poor
(B) the poor but not the rich
541. What is the best definition for Long (C) both the poor and the rich
Run?
(D) neither the poor nor the rich.
(A) A period of time in which at lease one
resource is fixed 547. Economics is best defined as the study
(B) A period of time in which all resources of how people, businesses, governments,
can change and societies
(C) A period of 1 to 5 years (A) make choices to cope with scarcity
(D) A period of 5 or more years (B) attain wealth
542. A statement which does not offer any (C) use their infinite resources
suggestion is known as: (D) none of above
(A) positive statement
(B) normative statement 548. In competitive markets
(C) both (a) & (b) (A) the products sold are different de-
pending on the firm selling the product
(D) none of these
(B) it is hard for a seller to enter the mar-
543. Economic Problems arises due to the fact ket due to barriers to entry
that: (C) firms will leave the market if they are
(A) resources are scare making economic profits.
(B) human wants are unlimited (D) buyers can expect to find consistently
(C) resources have alternative uses low prices and wide availability of the
(D) all of these goods that they want.
539. B 540. C 541. B 542. A 543. D 544. D 545. D 546. C 547. A 548. D 549. D
549. A decrease in the price of a good will 554. In order to have a farm, which factor
(A) increase supply. of production do you need (at least to
start)?
(B) decrease supply.
(A) land
(C) increase quantity supplied. (B) labor
(D) decrease quantity supplied. (C) capital
550. In the short run, which of the following
NARAYAN CHANGDER
costs must continuously decrease as out- 555. If storage of a good is cheap and readily
put produced increases? available, supply is likely to be
(A) Total variable cost (A) relatively elastic.
(B) relatively inelastic.
(B) Total fixed cost
(C) perfectly inelastic.
(C) Average total cost
(D) perfectly elastic.
(D) Average fixed cost
556. Demand is the desire and the to buy
551. Microeconomics and Macroeconomics a product or service
was first coined by (A) need
(A) Ragnar Frisch (B) time
(C) plan
(B) Adam Smith
(D) ability
(C) Marshall
(D) None of these 557. Which of the following market structures
results in allocative efficiency?
552. SSEMI 2 c:What occurs to equilibrium (A) Monopoly
price and quantity in a market if demand (B) Monopolistic Competition
increases, but supply remains the same? (C) Perfect Competition
(A) Price increases, quantity decreases (D) Oligopoly
(B) price decreases, quantity increases 558. Law of variable proportion explains
(C) price is unknown, quantity increases three stages of production. In the first
stage ofproduction:
(D) price increases, quantity increases
(A) Both MP and AP rise
553. The value of PES is between 0 and 1 (B) MP rises
when (C) AP Falls
(A) quantity supplied increases more (D) MP is zero
than proportionately compared to price 559. When a worker gets better and better at
rise. taking the same input and producing more
(B) quantity supplied increases less than output in the same amount of time then he
proportionately compared to price fall. / she is said to be more?
(C) quantity supplied increases more (A) Specialized
than proportionately compared to price (B) Hard Working
fall. (C) Productive
(D) quantity supplied increases less than (D) Greedy
proportionately compared to price rise. (E) Marginally Challenged
550. D 551. A 552. D 553. D 554. A 555. A 556. D 557. C 558. A 559. C 560. A
560. Coke raises their prices. What will hap- 566. One person creates the frame of a car,
pen to Pepsi? another mounts the body, another installs
(A) Increase Demand the glass while yet another adds seats.
(B) Increase Supply This is a prime example of what type of
economic activity?
(C) Decrease Demand
(A) Division of Labor
(D) Decrease Supply
(B) Economic Interdependence
561. It is comes from Greek word, makros, (C) Factors of Production
meaning “large” (D) Cost Benefit Analysis
(A) Macro (E) Consumer Sovereignty
(B) Micro
(C) Eco 567. The statements like Economy should con-
trol pollution or unemployment in the econ-
(D) none of above
omy ought to be reduced fall within the
562. When there is lots of competition in a scope of
market because the barriers to entry are (A) Normative statement
low and there are many substitutes that (B) Positive statement
exist, this is called? (C) Both A and B
(A) Monopoly (D) None of these
(B) Oligopoly
(C) Monopolistic Competition 568. In production function, production is a
function of:
(A) Price
563. Sainsbury’s vows Asda will cut prices. (B) Factors of Production
(A) Business news (C) Total Expenditure
(B) Economic news (D) None of these
(C) Microeconomics
(D) Macroeconomics 569. Monopolistic competition is character-
ized by a
564. Define the term price elasticity of supply. (A) few dominant firms and low entry bar-
(A) the responsiveness of quantity sup- riers
plied to a change in price. (B) a large number of firms and substan-
(B) the responsiveness of quantity de- tial entry barriers
manded to a change in price. (C) a large number of firms and low entry
(C) the responsiveness of quantity sup- barriers
plied to a change in quantities. (D) few dominant firms and substantial
(D) none of above entry barriers
565. What Hong Kong’s sky-high home prices 570. The founder and father of the command
mean for investors (select three) or centrally planned economic system?
(A) Business news (A) Karl Marx
(B) Economic news (B) Adam Smith
(C) Microeconomics (C) John Maynard Keynes
(D) Macroeconomics (D) David Ricardo
561. A 562. D 563. A 564. A 565. B 565. C 565. D 566. A 567. A 568. B 569. C
570. A 571. B
571. The law of supply is 576. Which is a key economic question faced
(A) The quantity of an item that is desired by all countries?
at a given price (A) How big should the army be?
(B) The quantity of an item that is sup- (B) How much money should be raised in
plied at a given price taxes?
(C) The quantity of an item that is not de- (C) How may schools should be built?
sired at a given price (D) How should goods and services be
produced.
NARAYAN CHANGDER
(D) The price of an item that is desired
based on Quantity 577. Compared to a perfectly competitive in-
dustry with the same demand and cost
572. Production Possibility curve can be curves, a monopoly’s price and quantity
(A) Concave will be which of the following?
(B) Convex (A) P=Higher; Q=Same
(C) Straight (B) P=Lower; Q=Same
(D) All of the above can be possible (C) P=Lower; Q=Higher
(D) P=Higher; Q=Lower
573. Represents how goods, services, and
money move through our economy. 578. An improvement in production technol-
ogy will:
(A) Circular Flow Diagram
(A) tend to increase equilibrium price
(B) Supply Curve
(B) shift the supply curve to the left
(C) Demand Curve
(C) shift the supply curve to the right
(D) Supply and Demand Curve (D) shift the demand curve to the left
574. In the United States people are free to 579. If sandals suddenly became very popular,
make their own choices on buying and sell- what would happen to the market for bas-
ing. Businesses that satisfy those wants ketball shoes? This would cause the
are required to following government reg- curve for basketball shoes to shift
ulations. Under these conditions the U.S. (A) demand right
would be considered which type of econ-
(B) demand left
omy?
(C) supply right
(A) Traditional Economy
(D) supply left
(B) Mixed Market Economy
(C) Command Economy 580. The amount of goods available:
(D) Free Market Economy (A) Supply
(B) Demand
575. The market value of all the inputs a firm (C) Utility
uses in production. (D) Equilibrium
(A) Implicit Costs
581. What are the advantages to a command
(B) Explicit Costs economy?
(C) Total Costs (A) More jobs / employment than a mar-
(D) Marginal Costs ket economy
572. D 573. A 574. B 575. C 576. D 577. D 578. C 579. B 580. A 581. B
(B) Less income disparity than a market 587. Government of India take efforts to re-
economy duce unemployment. How will it affect its
(C) More flexibility than a market econ- PPC?
omy (A) PPC will shift rightward
(D) More consumer choices than a mar-
(B) PPC will shift leftward
ket economy.
(C) PPC will not be affected
582. SSEMI 1 b:The primary of role of money
in the economy is to (D) None of these
(A) help set interest rates at financial in-
588. The Central Problem of what to produce
stitutions.
means-
(B) provide a mechanism to assist foreign
trade. (A) What technique to be used and in
(C) serve as a medium of exchange for what ratio
goods and services. (B) What goods are to be produced and in
(D) identify prices in various markets. what quantity
583. Fixed Cost divided by the quantity of out- (C) How to distribute the national income
put. among individuals
(A) Average Fixed Cost (D) None of the above
(B) Average Variable Cost
(C) Marginal Cost 589. Anything that is created by humans that
is used to aid in the production of other
(D) Marginal Fixed Cost
goods and services is known as a?
584. Which of the following is NOT considered (A) Capital Good
as exceptional demand?
(B) Consumer Good
(A) Products with status symbol
(B) Highly priced goods (C) Intermediate Good
(C) Festive products (D) Final Good
(D) Goods for war and natural disasters (E) Money
585. What is the fundamental economic prob-
lem? 590. Predatory pricing policy is designed to
(A) Racism (A) Drive competitors out of business
(B) Scarcity (B) Maximize profits
(C) Money (C) Encourage entrants into the market
(D) Greed
(D) Attain least cost output
586. A list of the quantity that a buyer is will-
ing to buy at different prices at one partic- 591. A keeps prices form going any higher
ular time and shows a functional relation- and causes a
ship between price and quantity.
(A) price ceiling; shortage
(A) Demand Assumptions
(B) price ceiling; surplus
(B) Demand Theorems
(C) Demand Percepts (C) price floor; shortage
(D) Demand Schedule (D) price floor; surplus
582. C 583. A 584. C 585. B 586. D 587. C 588. B 589. A 590. A 591. A 592. B
592. Which of the following is not a key idea (B) People work harder if the wage is
in the economic way of thinking? higher.
(A) People make rational choices by com- (C) The unemployment rate should be
paring costs and benefits. lower.
(B) Poor people are discriminated (D) Printing too much money causes infla-
against and should be treated more fairly. tion.
(C) A rational choice is made at the mar-
gin. 597. Something that someone does for you or
NARAYAN CHANGDER
(D) Choices respond to incentives. performs for you is called a?
(A) Service
593. Why is a PPF usually drawn concave to
the origin? (B) Good
(A) Interaction between demand and sup- (C) Need
ply (D) Want
(B) Profit motive
(C) Not all factors of production are per- 598. The amount of a product or service is de-
fectly mobile sired by buyers is known as
(D) Optimum use of resources is com- (A) Demand
plete specialisation (B) Scarcity
594. Interdependence and price leadership are (C) Supply
characteristics of firms in what kind of (D) Surplus
market structure?
(A) monopoly 599. Who is known as father of modern eco-
(B) oligopoly nomics?
(C) monopolistic competition (A) Ragnar Frisch
(D) perfect competition (B) Adam Smith
595. What does a production possibility curve (C) Marshall
show? (D) None of these
(A) The prices of two types of products
being produced 600. Value of everything a seller must give up
(B) The quantity of capital and consumer to produce a good
goods that people would like to be pro- (A) Cost
duced (B) Willingness to pay
(C) The maximum combination of two
(C) Tax
types of goods that can be produced with
given resources. (D) Deadweight loss
(D) The relative profitability of capital and
consumer goods 601. The number one goal of a business is:
(A) Equality
596. Which of the following statements is nor-
(B) Good Working Conditions
mative?
(A) Large government deficits cause an (C) Profit
economy to grow more slowly. (D) Charitable Contributions
593. C 594. B 595. C 596. C 597. A 598. A 599. B 600. A 601. C 602. B 603. A
602. During the planning period highest (A) corporation

growth rate was achieved during (B) partnership
(A) 8th plan (C) proprietorship
(B) 10th plan (D) S corporation
(C) 9th plan
(D) 7th plan 608. The United States has decided to spend
more money on military goods and less on
603. The law of demand says that education. The opportunity cost for spend-
(A) at higher prices, buyers will demand ing more money on military goods would
less of an economic good. be which of the following?
(B) at higher prices, buyers will demand (A) the satisfaction of destroying our en-
more of an economic good. emies
(C) at higher prices, sellers will supply (B) the money used to fund the military
more of an economic good.
(C) money to spend on education
(D) at higher prices, sellers will supply
(D) better paid soldiers
less of an economic good.
604. is the struggle between buyers and 609. What type of economy does America
sellers to get the best products at the low- have?
est prices. (A) Mixed
(A) Competition (B) Traditional
(B) Productivity (C) Market
(C) Free enterprise (D) Command
(D) Economic freedom
610. in increasing returns to factor total pro-
605. An economic system where the three key duction
economic questions are answered only by
(A) increases
consumers without interference from the
government is known as? (B) increases with diminishing rate
(A) Command Economy (C) decreases
(B) Traditional Economy (D) increases with increasing rate
(C) Mixed Market Economy
611. Producer surplus increases as price
(D) Free Market Economy
(A) Increases
(E) Keynesian Economy
(B) Decreases
606. An increase in product price will cause: (C) Stays the same
(A) quantity demanded to decrease (D) Grows wings and flies away
(B) quantity supplied to decrease
(C) quantity demanded to increase 612. What is market?
(D) the supply curve to shift to the right (A) A group of buyers and sellers of a par-
ticular good and service
607. In what type of business organization is
(B) Increase in demand
each owner personally liable for all busi-
ness debts, even if the debts were created (C) Decrease in supply
by other owners? (D) none of above
604. A 605. D 606. A 607. B 608. C 609. A 610. D 611. A 612. A 613. A
613. Definition of market equilibrium 619. If the supply curve of a product is verti-
(A) Quantity demanded and quantity sup- cal, PES is equal to
plied are the same (A) 0.
(B) Quantity demanded and quantity sup- (B) 1.
plied are different (C) -1.
(C) Quantity demanded is higher than
(D) infinity.
quantity supplied
(D) Quantity demanded is lower than 620. What do you call inputs to prodution?
NARAYAN CHANGDER
quantity supplied (A) Scarcity
614. measure of the way in which quantity (B) choice
supplied responds to a change in price (C) opportunity cost
(A) short run (D) resources
(B) negative returns
(C) Supply elasticity 621. The lerner’s index of monopoly power
has a value
(D) long run
(A) Zero
615. Trump announces tariffs on $60bn in Chi- (B) One
nese imports.
(C) Between zero to unity
(A) Business news
(D) Two
(B) Economic news
(C) Microeconomics 622. are rewards offered to try to get
(D) Macroeconomics people to take certain economic actions.
(A) Profits
616. What is a need?
(B) Incentives
(A) Nothing
(C) Marginal benefits
(B) Something you have to have to live
(D) Trade-offs
(C) Something you would like to have
(D) Ice cream 623. The ideal price and level of output occurs
where
617. Which of the following is not a function
of money (A) Marginal Revenue and Marginal Cost
cross
(A) Measure of value
(B) MR = AVC
(B) Medium of exchange
(C) Method for deferred payment (C) Average Fixed Cost equal ATC
(D) Improvement to Barter (D) MR = MT
618. One effect of a subsidy is that it in- 624. Which of the following is not concerned
creases with the problem of choice?
(A) consumer surplus. (A) Unlimited wants
(B) allocative efficiency. (B) Excessive income
(C) producer surplus. (C) Alternative use of resources
(D) total surplus. (D) Limited resources
614. C 615. B 615. D 616. B 617. D 618. C 619. A 620. D 621. C 622. B 623. A
624. B 625. C
625. The quantity of input which minimizes 631. Opportunity cost is never
average total costs? (A) A triangle
(A) Diseconomies of scale (B) Equal to increased production
(B) Inefficient Scale
(C) The next best alternative
(C) Efficient Scale
(D) A rectangle
(D) Economy of scale
632. The amount a firm receives after all costs
626. Which factor of production is the least
have been paid.
mobile?
(A) Capital (A) Revenue
(B) Enterprise (B) Marginal Profit
(C) Labour (C) Profit
(D) Land (D) Marginal Revenue
627. VOCABULARY:Real or perceived differ- 633. What are the 3 economic questions?
ences between competing products in the (A) What to produce? How To Produce?
same industry. For whom to produce?
(A) Price-Fixing (B) Who to produce? Why you produce?
(B) Supply Like to produce?
(C) Demand (C) Why to produce? Tell who to pro-
(D) Product Differentiation duce? Things to produce?
628. The study of how individuals / con- (D) none of above
sumers allocate their scarce resources to
meet their wants and needs. 634. What does a point outside the PPC rep-
resent?
(A) Microeconomics
(A) A currently unattainable position
(B) Macroeconomcis
(C) Regional Economics (B) An inefficient position
(D) Para economics (C) The maximum use of resources
(D) Unused resources
629. When demand is price elastic, a reduction
in price leads to 635. Total Costs=
(A) increase in revenue (A) Variable Costs-Fixed Costs
(B) increase in revenue initially, and a (B) Fixed Costs-Variable Costs
subsequent fall in the long run
(C) Fixed Costs + Variable Costs
(C) reduction in total revenue
(D) Variable Costs Divided By Fixed Costs
(D) exit from the market
630. Consumer is not Sovereign in which type 636. Which type of economic system takes
of economy care of those in poverty?
(A) Market economy (A) Capitalism
(B) Centrally planned economy (B) Free Enterprise
(C) Mixed economy (C) Command
(D) none of above (D) Free Market
626. D 627. D 628. A 629. A 630. B 631. A 632. C 633. A 634. A 635. C 636. C
637. D
637. The process of combining resources to (B) You run a red light and you get a
make a good or provide a service is called ticket.
? (C) You choose to give up math to study
(A) price for history.
(B) incentive (D) In a softball game, you miss the ball
(C) consumption and strike out.
(D) production 643. In economics, the term demand refers to
NARAYAN CHANGDER
the quantity of a good that people
638. In which market structure does a firm
have greatest control over its product’s (A) will buy at one particular price over a
price? long time period
(A) perfect competition (B) would like to consume on a given date
(B) monopoly (C) will buy at many different prices at a
particular time
(C) oligopoly
(D) would like to have available during a
(D) monopolistic competition given time period
639. What is the best definition for Short 644. What are some characteristics of a free
Run? market economy?
(A) A period of time in which at lease one (A) lack of choice, competition
resource is fixed
(B) individual choice, centrally-planned
(B) A period of time in which all resources
(C) competition, consumer sovereignty
can change
(D) central ownership of property, profit
(C) A period of 1 to 5 years
(D) A period of 5 or more years 645. if demand is perfectly elastic then de-
mand curve would be
640. Which of the following are assumptions
(A) horizontal
we make about perfect competition?
(B) vertical
(A) A large number of industries
(C) rectangular hyperbola
(B) A large number of firms
(D) none of these
(C) Each firm is a price-taker
(D) No government intervention 646. Microeconomics is concerned with
(A) the aggregate income, employment
641. Which is the best example of a scarce re- and total output
source?
(B) individual economic units and specific
(A) Air markets.
(B) Water (C) international trade and barriers.
(C) Money (D) unemployment and inflation prob-
(D) Dirt lems.
642. Which one of the following is an oppor- 647. Which form of business organization is
tunity cost? authorized by law to act as a legal person
(A) You stay out late and your parents regardless of the number of owners?
ground you. (A) entrepreneurship
638. B 639. A 640. C 641. A 642. C 643. C 644. C 645. A 646. B 647. D 648. A
(B) partnership 653. In most places, citizens can only buy elec-
(C) sole proprietorship tricity for their homes from one provider.
The barriers to the electricity market are
(D) corporation
too high for new sellers. Many buyers are
648. What is this the definition of:There are eager to purchase electricity as most mod-
many buyers and sellers, a standardized ern homes require it. What is this?
product, and easy entry into and out of the (A) Oligopoly
market (B) Pure competition
(A) Pure competition (C) Natural monopoly
(B) Pure monopoly (D) Monopolistic competition
(C) Monopolistic competition
(D) Oligopoly 654. Below are the concept in economic prob-
lems EXCEPT:
649. Identify the central prblm which deals (A) Choices
with deciding the Quantity of goods to be
(B) Externalities
produced
(A) What to produce (C) Opportunity Cost
(B) How to produce (D) Scarcity
(C) For whom to produce 655. Name a country that has a free market
(D) None of these leaning mixed economy.
(A) United States
650. If production of good X rises by 1 unit
and that of good Y falls from 15 to 12.5 (B) Cuba
units then, marginal opportunity cost of X (C) N. Korea
is:
(D) Russia
(A) 27.5
(B) 2.5 656. Assume Company 1 and Company 2 oper-
(C) 15 ate as an oligopoly. Which statement best
represents this?
(D) 12.5
(A) They control over 75% of the market
651. Labour, land and capital are called: (B) They have products that are different,
(A) goods and services. but are marketed the same way
(B) entrepreneurship. (C) They own many different “brands”
(C) outputs. (D) They are major corporations with
(D) factors of production. stock holders
652. Will lead to a shift of the supply curve 657. The concept of vicious circle of poverty is
associated with
(A) Change in costs of production (A) Kindleberger
(B) Change in firm’s reputation (B) Schumpeter
(C) Change in consumer preferences (C) Ragnar Frish
(D) none of above (D) Gunnar Myrdal
649. A 650. B 651. D 652. A 653. C 654. B 655. A 656. A 657. D 658. A 659. A
658. Which of the following describes a 663. What do rent control policies impose on
monopoly firm? the market?
(A) Single seller (A) price floors
(B) Many sellers (B) shortages
(C) price ceilings
(C) Many substitutes
(D) surpluses
(D) No barrier to entry
664. A person who buys goods and services
NARAYAN CHANGDER
659. Individuals A and B can produce good X. (A) consumer
We say that A has a comparative advan-
(B) entrepreneur
tage in the Production of good X if:
(C) resource
(A) A has a lower opportunity cost of pro-
(D) currency
ducing X than B
(B) A can produce less units of X in a 665. In deciding how to produce the economy
given time period than B. should consider
(C) A can produce X using newer technol- (A) Labour intensive technique
ogy than B. (B) Capital intensive technique
(D) A can produce more units of X in a (C) Both A and B
given time period than B. (D) Neither A nor B
666. Microeconomics
660. Choose what is true about economics?
(A) the study of the economic behavior
(A) Economics involve only positive state- and decision making of small units, such
ments as individuals, families, and businesses
(B) Economics involve only normative (B) Price floor and price ceiling
statements (C) part of the economics study that con-
(C) Economics involve both positive and cerns all countries of the world
normative statements (D) Law of Demand and Supply
(D) Economics involve neither positive
667. Factors that make it difficult for new
nor normative statements
firms to enter a market are called
661. Which of these would be figured in to the (A) Barriers to entry
cost of production? (choose all that apply) (B) Factors of production
(A) wages (C) Limited supply
(B) natural resources (D) Monopolistic Outlook
(C) utilities 668. Which of the following is true about a

(D) insurance shareholder in a corporation?
(A) A shareholder is part owner of that
662. Monopolistic competition is a type of business.
(A) price discrimination (B) A shareholder may not share in the
earnings of that corporation.
(B) market structure
(C) A shareholder may not transfer his
(C) advertising strategy share to another party without permis-
(D) oligopoly sion.
660. C 661. A 661. B 661. C 661. D 662. B 663. C 664. A 665. C 666. A 667. A
668. A 669. A
(D) A shareholder is liable for any debts 675. Which of the following is found ONLY in
accumulated by that corporation. oligopoly?
669. A maximum price consumers are required (A) producers who sell identical products
to pay for a good or service. (B) one firm’s actions affect another
(A) Price Ceiling firm’s profit
(B) Equilibrium (C) entry into the industry is blocked
(C) Market Clearing Price (D) sellers face a downward sloping de-
(D) Price Floor mand curve for their product
670. If the demand of a product drops, you 676. Which of the following is not related to
would expect the price of the product to Macro Economics?
(A) Market Supply
(A) rise
(B) stay the same (B) National Income
(C) go up (C) Aggregate Demand
(D) decrease (D) Central Bank’s Policy
671. What is demand?
677. The process by which the same amount
(A) Amount an item costs of inputs, used in the same amount of time
(B) Amount producers are willing to sell produces a greater amount of output is
(C) Amount of goods or services people called
are willing to buy (A) Productivity
(D) Amount of the incentive
(B) Manufacturing
672. Which economy deals with economic is- (C) Capitalism
sues related to past, present and future?
(D) Laissez-Faire
(A) Micro economics
(B) Macro economics 678. Name two characteristics of a command
(C) Normative economics economy.
(D) Positive economics (A) centrally-planned, profit
673. The study of how people allocate their (B) central ownership of property, lack of
scarce resources to meet their wants and choice
needs? (C) competition, central ownership of re-
(A) Civics sources
(B) Economics (D) centrally-planned, consumer
(C) Utilitarianism sovereignty
(D) Consumerism
679. Who developed micro economics
674. What type of a science is economics?
(A) Alfred Marshall
(A) Political
(B) Social (B) JM Keynes
(C) Natural (C) Pigoue
(D) Physical (D) Dalton
670. D 671. C 672. D 673. B 674. B 675. B 676. A 677. A 678. B 679. A 680. A
680. The demand curve shows (B) $100

(A) The amount of goods or services that (C) $60
are consumed at a given market price. (D) $40
(B) The amount of goods or services that
686. An example of perfect competition would
are supplied at a given market price.
be what?
(C) The amount of goods or services that
(A) Milk
are consumed at a given quantity.
(B) Cars
(D) none of above
NARAYAN CHANGDER
(C) Jeans
681. This is a price floor that can be imple- (D) none of above
mented below equilibrium and is used for
rent control. 687. Scarcity causes economic problem.
Which of the following statements is true
(A) Price Ceiling
about scarcity?
(B) Price Floor
(A) Scarcity is our inability to satisfy all of
(C) Price of Demand our wants.
(D) Price Redundant (B) Scarcity problem arises because our
wants are greater than resources avail-
682. An economic system in which only the
able.
government owns the factors of produc-
tion and answers the three key economic (C) The poor and the rich both face
questions. scarcity.
(A) Free Market Economy (D) All of the above.
(B) Mixed Market Economy 688. Benefit sellers receive from participating
(C) Command Economy in a market
(D) Traditional Economy (A) Consumer surplus
(B) Producer surplus
683. What is the formula in finding demand
(C) Total surplus
function?
(D) Tax
(A) Qx = a-bp
(B) Qx = a + bp 689. Which of the following graphs will al-
(C) Qx = a / bp ways decrease?
(D) Qx = a x bp (A) Marginal cost
(B) Average Variable Cost
684. What is the Profit Maximizing Formula? (C) Average Fixed Cost
(A) Revenue > Expenses (D) Average total cost
(B) MR > ATC
690. In which type of market do you have the
(C) MR = MC
largest number of firms?
(D) AFC + AVC = ATC
(A) perfect competition and oligopoly
685. At 100 units of output, a firm’s total cost (B) perfect competition and monopolistic
is $10, 000. If the firm’s total fixed cost is competition
$4, 000, its average variable cost is equal (C) perfect competition and monopoly
to: (D) monopolistic competition and
(A) $140 oligopoly
681. A 682. C 683. A 684. C 685. C 686. A 687. D 688. B 689. C 690. B
691. This type of business is owned by many 696. Will lead to a shift of the demand curve
people and is treated as though it were a
person. It can own property, pay taxes, (A) Change in costs of production
make contracts, sue and be sued. (B) Change in firm’s reputation
(A) Sole proprietorship (C) Change in taxes
(B) Partnership (D) Change in international tariffs
(C) Joint Venture 697. This represents ownership rights to a cer-
(D) Corporation tain portion of profits and assets of the
company.
692. Sammy’s Inc. competes with a few other (A) Stock
firms because there are natural barriers to (B) Bonds
entry. Sammy’s operates in (C) Articles of incorporation
(A) a perfectly competitive market. (D) corporate charter
(B) an oligopoly. 698. The fact that human wants cannot be
(C) a monopolistic competitive market. fully satisfied with available resources is
(D) a monopoly. called problem of
(A) scarcity
693. The reliance on one another to provide (B) choices.
the goods and services that people need. (C) opportunity cost.
(A) Law of demand (D) none of the above.
(B) Businesses 699. Who owns a Corporation?
(C) Factor market (A) Board of Directors
(D) Economic interdependence (B) CEO
(C) Stockholders
694. Which of the following is NOT the elas- (D) The government
ticity of land supply
700. What is the amount of goods or services
(A) Inelastic
available to consumers?
(B) Elastic (A) price
(C) Perfectly inelastic (B) demand
(D) Super elastic (C) incentives
(D) supply
695. Read the following two statements:1.
Nation A produces cars more efficiently 701. Economists normally assume that the
than it can grow food crops.2. Nation A goal of a firm is to(i) sell as much of their
produces food and buys cars from Nation product as possible.(ii )set the price of the
B.What principle of economics is illustrated product as high as possible.(iii) maximize
by these two statements? profit.
(A) i only
(A) Laws of Supply and Demand
(B) i and iii only
(B) Scarcity (C) ii and iii only
(C) The Factors of Production (D) iii only
(D) Specialization (E) i, ii and iii
691. D 692. B 693. D 694. D 695. D 696. B 697. A 698. A 699. C 700. D 701. D
702. A
702. Which of the following would be a 707. What is economic choice?

macroeconomic topic. (A) unable to find work
(A) Why are Americans borrowing money (B) being weak
from China?
(C) When you have to give something up
(B) Why do I choose to buy a cell phone to have something else
rather than a laptop.
(D) goods and services purchased from
(C) Will I work more if I’m paid more? other countries
(D) How can I figure out how much to
NARAYAN CHANGDER
charge for my candy bars? 708. If Mary used to buy 10 units at $4 each
and now buys 15 units when the price is
703. Situation created in which there are lim- $4, her
ited resources but people have unlimited
(A) quantity demanded has increased
wants and needs.
(B) quantity demanded has decreased
(A) Shortage
(C) demand has increased
(B) Supply
(D) demand has decreased
(C) Scarcity
(D) Abundance 709. SSEMI 4 a A key advantage of a partner-
ship is
704. A change in the demand for apples could
result from any of the following except (A) limited liability of the partners
(A) a change in the number of buyers (B) unlimited liability of the partners
(B) increased preferences for fresh fruit (C) specialization of the partners
consumption for health reasons (D) ease of raising capital through stock-
(C) a change in the price of an apple holders
(D) a change in the price of a banana
710. Jim no longer has a job as a stock broker
705. Which type of economic system lacks in- since 2008. He is experiencing what kind
centives for individuals to innovate? of unemployment?
(A) Free Market (A) Cyclical
(B) Free Enterprise (B) Structural
(C) Mixed Market (C) Seasonal
(D) Command (D) Frictional
706. Diseconomies of scale arise primarily be- 711. Which of the following statements is in-
cause: correct?
(A) the SR ATC rises when MC increases (A) If demand increases and supply de-
(B) of difficulties in managing a large creases, equilibrium price will rise
business (B) If supply increases and demand de-
(C) firms must be large relative to the creases, equilibrium price will fall
market to employ efficient production (C) If demand decreases and supply in-
techniques creases, equilibrium price will rise
(D) MP declines as more units of a vari- (D) If supply declines and demand re-
able input are added to a fixed input mains constant, equilibrium price will rise
703. C 704. C 705. D 706. B 707. C 708. C 709. C 710. A 711. C 712. C
712. With regards to determinants of supply, 717. Water has seen an increase in demand
loose government regulation tends to 8% this summer, while the price has de-
(A) decrease supply creased 12%
(B) cause rebellion/revolts (A) 1.5 inelastic
(C) increase supply (B) 1.5 elastic
(D) shift the curve to the left (C) .67 inelastic
(D) .67 elastic
713. The study of how society chooses to allo-
cate its scarce resources to the production 718. Jeff was replaced by a computer. He
of goods and services in order to satisfy is experiencing what type of unemploy-
unlimited wants. ment?
(A) Entrepreneurship (A) Cyclical
(B) Business Administration (B) Structural
(C) Accounting (C) Seasonal
(D) Economics (D) Frictional
714. What four entities make up the circular 719. the price that balances quantity supplied
flow model? and quantity demanded
(A) Price Floor
(A) firms, households, factor, and prod-
uct markets (B) Price Ceiling
(B) Buyers, sellers, producers, and con- (C) Law of Demand
sumers (D) Equilibrium Price
(C) Local, state, federal, and county gov-
720. Refers to all plots of ground and other
ernments
natural resources used in the production of
(D) President Obama, Katy Perry, Waka goods and services.
Flocka, and Lil Baby (A) Land
715. The inability to satisfy all wants at the (B) Labor
same time is called ? (C) Entrepreneurial Ability
(A) Scarcity (D) Capital
(B) choice
721. Scarcity is when
(C) opportunity cost
(A) Unlimited wants is met with limited re-
(D) resources sources
716. A firm produces 400 books and sells each (B) Forcing to pick some choices and re-
book for $15. If the explicit cost of produc- ject the rest
ing the books is $4, 500 and the implicit (C) Choosing one alternative means giv-
cost is $1, 000, the firm’s economic profit ing up another
is: (D) All of them
(A) $0
722. A system allows businesses to com-
(B) $500 pete for profit with a minimum of govern-
(C) $1, 000 ment interference.
(D) $1, 500 (A) Free Market
713. D 714. A 715. A 716. B 717. C 718. B 719. D 720. A 721. A 722. A
(B) Traditional (A) Average total cost will increase

(C) Command (B) Marginal cost will increase
(D) Mixed (C) Average variable cost will increase
723. On the market demand and supply graph, (D) The profit-maximizing level of output
the point equilibrium always happens will increase
(A) at the highest point on the demand 728. Which way does a supply curve slope?
curve.
(A) down
NARAYAN CHANGDER
(B) where the demand and supply curves
intersect. (B) up
(C) at the lowest point of the supply (C) both
curve. (D) neither
(D) at the center point of the graph, irre-
spective of the curves. 729. If a consumer knows that a product will
be going on sale this week, how will
724. The factor of production that includes the his/her CURRENT demand be affected?
physical land and resources that come di- (A) it will go up
rectly from the earth. (B) it will go down
(A) Land
(C) it will stay the same
(B) Labor
(D) what does this have to do with the
(C) Capital price of tea in China?
(D) Entrepreneurship
730. Which of the following included in com-
725. The fundamental economic prblm which ponents of microeconomics?
is being faced is
(A) Theory of equilibrium
(A) Unlimited human wants
(B) Theory of price
(B) Limited wants and unlimited re-
(C) Theory of consumer behaviour
sources
(C) Unlimited wants and scarcity of re- (D) Both b and c
sources (E) Theory of disequilibrium
(D) Limited wants and limited resources
731. The human factor of production is
726. In a market economy, who or what (A) Capital
decides on the allocation of scarce re- (B) Land
sources?
(C) Labor
(A) Government
(D) All of these
(B) Households
(C) Firms 732. What do the households provide busi-
(D) Market forces nesses?
(E) Banks (A) Revenue
(B) Wages
727. If a new tax on capital increases a firm’s
fixed cost of production, which of the fol- (C) Resources
lowing will occur in the short run? (D) Goods and services
723. B 724. A 725. C 726. D 727. A 728. B 729. B 730. D 731. C 732. C 733. B
733. When WalMart pays income taxes, what 739. Which of the following is a macroeco-
two parts of the circular flow model are in- nomic topic?
volved? (A) the reasons for the rise in average
(A) consumers and producers prices
(B) product market and government (B) whether the army should buy more
tanks or more rockets
(C) consumers and government
(C) the reasons for a rise in the price of
(D) producers and consumers orange juice
734. A market structure in which there is only (D) none of above
one seller is known as a 740. The basic formula for the price elasticity
(A) Pure competition of demand coefficient is:
(B) Oligopoly (A) absolute decline in quantity de-
(C) Monopoly manded/absolute increase in price
(D) Monopolistic Competition (B) percentage change in quantity de-
manded/percentage change in price
735. Study of choice under conditions of (C) absolute increase in price /absolute
scarcity. decline in quantity demanded
(A) Economics (D) percentage change in price/ percent-
age change in quantity demanded
(B) Scarcity
(C) Supply 741. The property whereby long-run average
(D) none of above total cost stays the same as the quanity of
output changes.
736. What makes economics an art? (A) Constant Returns to Scale
(A) Positive statements (B) Economies of Scale
(B) Normative statements (C) Efficient Scale
(D) Diseconomies of Scale
(C) Practical use
(D) None of the options 742. How are an Oligopoly and a Monopoly
different?
737. Who is the Father of Modern Eco- (A) Monopoly:only 1 business in a mar-
nomics? ket; Oligopoly:only a few
(A) Ragnar Frisch (B) Oligopolies are only owned by the gov-
(B) Adam Smith ernment
(C) Marshall (C) Monopolies are only owned by the
government
(D) None of these.
(D) Monopoly:few businesses in a mar-
738. An increase in a firm‘s costs of produc- ket; Oligopoly:only 1
tion can be represented by
743. Positive statements are statements
(A) A rightward shift of the demand curve (A) Objective
(B) A leftward shift of the demand curve (B) Subjective
(C) A rightward shift of the supply curve (C) Emotional
(D) A leftward shift of the supply curve (D) Value
734. C 735. A 736. C 737. B 738. D 739. A 740. B 741. A 742. A 743. A 744. B
744. When the price of a good rises then the 749. The opportunity cost of Australian house-
quantity of that good that sellers are will- holds moving away from coal-powered en-
ing to sell also rises. This best demon- ergy to solar-powered energy includes (i)
strates which economic law? the loss of jobs in the coal industry, (ii) a
(A) Law of Demand cleaner environment, (iii) reduced coal pro-
duction.
(B) Law of Supply
(A) (i), (ii) and (iii)
(C) Law of Equilibriium
(B) (ii) and (iii)
(D) Law of Adjustments
NARAYAN CHANGDER
(C) (iii) only
(E) The Law of Inequalities
(D) (i) and (iii)
745. study of how people (including 750. perfect competition and monopoly are
companies/countries) make choices on similar in terms of
buying, selling, using, and distributing
(A) long run profit
goods/services.
(B) price determination
(A) Economics
(C) the demand curve
(B) Consumer Science
(D) the profit maximization condition,
(C) Opportunity Costs MR=MC
(D) none of above
751. When firms openly agree on price, out-
746. This is a special form of partnership in put, and other decisions aimed at achieving
which one partner is the general partner monopoly profits, those firms are practic-
and he makes all the decisions and the ing
other partner is considered a silent partner (A) overt collusion
because he only donated start up Money. (B) tacit collusion
(A) Limited Liability Partnership (C) price leadership
(B) Joint Venture (D) price-taking behavior
(C) Limited Partnership (E) price discrimination
752. If the price declines from Rs 450 to Rs
747. Large number of companies selling simi- 350 and, as a result, quantity demanded
lar but not identical products is called what increases from 1200 to 1500, elasticity of
type of competition? demand is:
(A) Perfect Competition (A) 1.78
(B) 0.89
(B) Monopolistic Competition
(C) 1.12
(C) Monopoly
(D) 3.42
(D) Oligopoly
753. VOCABULARY:Market structure where
748. A good that is used in place of another only a few very large sellers dominate an
good to meet the same need is called industry.
(A) complementary good. (A) Monopoly
(B) capital good. (B) Oligopoly
(C) substitute good. (C) Supply
(D) consumer good. (D) Demand
745. A 746. C 747. B 748. C 749. D 750. D 751. A 752. B 753. B 754. C
754. Which of the following does not illus- 760. What is the biggest disadvantage of sole
trate the concept of normal profit? proprietorships and partnerships?
(A) TR=TC (A) Start Up Costs
(B) AR=AC (B) Taxes
(C) MR=MC (C) Unlimited Liability
(D) Zero Economic Profit (D) Receives all profits
755. Indian Economy is: 761. Choose the one that is most appropriate
(A) Capitalism about economics.
(B) Socialism (A) Economics is ant art
(C) Mixed (B) Economics is a science
(D) Non Developing (C) Economics is both art and science
756. The most popular definition of sustain- (D) Economics is neither art nor science
able development is given by
762. Why do markets exist?
(A) World Development Report
(A) to allow people to exchange goods
(B) UNDP Report
and services
(C) Brundtland
(B) to allow people to earn money
(D) IMF Report
(C) to increase profits for business own-
757. The maximum price a consumer is willing ers
to pay for a product and the actual price (D) to concentrate the productive efforts
that they do pay of individuals
(A) Consumer surplus
(B) Producer surplus 763. Identify the correct determinant of sup-
ply.Example:If the government requires
(C) Deadweight loss factories to reduce pollution, complying
(D) Allocative Efficiency will initially increase costs of production in
the market and reduce supply.
758. In short run, the monopolists
(A) Government regulation
(A) Incurs a loss
(B) Cost of resources
(B) Makes a profit
(C) Break even (C) Worker productivity/motivation
(D) Any of the above (D) Change in technology
759. Which of the following is not part of the 764. The economic problem of scarcity refers
opportunity cost of going on holiday? to
(A) the money you spent on a theatre (A) limited wants and limited resources.
show there (B) unlimited wants and unlimited re-
(B) the money you could have made if you sources
had stayed at home and worked (C) limited wants and unlimited re-
(C) the money you spent on food sources
(D) the money you spent on airline tick- (D) unlimited wants and limited re-
ets. sources
755. C 756. C 757. A 758. B 759. C 760. C 761. C 762. A 763. A 764. D 765. B
765. Which type of economy is controlled by (B) The cost stays the same.
“the Invisible Hand” (C) The cost goes down.
(A) Command Economy (D) The cost always doubles.
(B) Free Market Economy
771. An increase in the price of milk causes
(C) Mixed Economy
a decrease in the demand for cereal. The
(D) Traditional Economy two products are
766. The founder and father of the traditional (A) substitutes
NARAYAN CHANGDER
economy? (B) complements
(A) Karl Marx (C) unrelated
(B) Adam Smith (D) demand elastic
(C) John Maynard Keynes
772. What will happen to the price & quantity
(D) No one
of pizzas if a new study shows pizza is the
767. Scarcity of resources exists ultimate health food?
(A) At macro level (A) Price-Decrease & Quantity Increase
(B) At micro level (B) Price-Decrease & Quantity-No
Change
(C) Micro as well as macro level
(D) None of these (C) Price-Increase & Quantity-Decrease
(D) Price-Increase & Quantity-Increase
768. What is an oligopoly?
(A) A state of total government economic 773. In a market economy, what serves as an
control incentive for consumer to purchase a prod-
uct?
(B) A free market economy
(A) Price
(C) A market shared by a small number of
producers (B) Economic Interdependence
(D) A competitive state involving many (C) Specialization
producers making similar goods (D) Shortage
769. A market is in equilibrium: 774. Which of the following would best com-
(A) provided there is no surplus of the plete a short definition of economics?
product “Economics is the study of “
(B) at all prices above that shown by the (A) How unlimited resources are allo-
intersection of the supply and demand cated between scarce wants
curves (B) How scarce resources are allocated
(C) if the amount that producers want to to satisfy unlimited wants
sell is equal to the amount that consumers (C) How money is circulated through the
want to buy economy
(D) whenever the demand curve is down- (D) How nations trade goods and ser-
sloping and the supply curve is up-sloping vices in a global marketplace
770. When a resource becomes scarce, what 775. An incentive A) is the opposite of a trade-
happens to its cost? off. B) . C). D) .
(A) The cost increases. (A) is the opposite of a tradeoff
766. D 767. C 768. C 769. C 770. A 771. B 772. D 773. A 774. B 775. C
(B) could be a reward but could not be a 781. Which is not a benefit of free market
penalty economy?
(C) could be either a reward or a penalty (A) Greater consumer choice
(D) could be a penalty but could not be a
(B) More innovation
reward
(C) More competition
776. Why does the average total cost curve
(D) Unequal income distribution
decrease as production increases in the be-
ginning?
782. If the cost of a computer falls by a large
(A) Average variable costs are increas- amount, you have an incentive to
ing.
(A) use your friend’s computer rather
(B) Average fixed costs are decreasing.
than buy one yourself
(C) Average fixed costs are the same.
(D) Average fixed costs are increasing. (B) avoid buying anew computer because
it is now less valuable
777. When a new producer of soap enters the
(C) take a shorter vacation
market, and the supply curve shifts to the
right, which determinant of supply shift is (D) buy a new computer
this an example of?
(A) Number of Sellers 783. Consider the following table:Production
Possibilities: A B C D EBread (units): 0 1
(B) Subsidies
2 3 4Butter (units): 10 9 7 4 0All possi-
(C) Producer Expectations bilities A to E deal with:
(D) Input Costs
(A) Full use of available resources
778. When economists measure the respon- (B) Under-utilisation of available re-
siveness of consumers to changes in price, sources
they are measuring:
(C) No use of available resources
(A) the percentage change in price
(B) the price elasticity of demand. (D) Demand for more resources
(C) the price elasticity of supply.
784. It is almost always the case that initial
(D) income elasticity.
plant size expansion leads to a decrease in
779. How are milk and cereal complements? cost. This is due to:
(A) You usually buy milk and cereal to- (A) technological improvement
gether
(B) increase in capital stock.
(B) They are eaten together
(C) A and B both
(C) You get complements based on your
choices of each (D) none of the above
(D) Cereal is expensive but Milk is not
785. When a limited amount of resources are
780. Which of the above is a factor of produc- available, consumers must:
tion?
(A) Demand more.
(A) Supply
(B) Choose an alternative.
(B) Demand
(C) Trade-offs (C) Wait.
(D) Land (D) Fight for them.
776. B 777. A 778. B 779. A 780. D 781. D 782. D 783. A 784. B 785. B 786. B
786. The gap between limited resources and 791. The study of production, distribution and
unlimited wants is known as consumption of goods and services.
(A) Demand (A) Macro-Economics
(B) Scarcity (B) Micro-Economics
(C) Economics
(C) Supply
(D) Supply and Demand
(D) Surplus
792. Fall in total surplus that results from a
NARAYAN CHANGDER
787. What are the basic problems/questions market distortion (like taxes)
in economy? (A) Total surplus
(A) What to produce (B) Deadweight loss
(B) How to produce (C) Corrective tax
(C) For whom to produce (D) Invisible hand
(D) None of the above 793. The body of knowledge and skills applied
to how goods are produced.
788. If we say that two variables are in-
(A) Technology
versely related, this means that:
(B) Market
(A) the two graph as an up-sloping line
(C) Technical
(B) an increase in one variable is associ- (D) Financial
ated with a decrease in the other
(C) an increase in one variable is associ- 794. Labour intensive Tequinique are chosen in
ated with an increase in the other a
(A) Labour surplus economy
(D) the resulting relationship can be por-
trayed by a straight line parallel to the hor- (B) Capital surplus economy
izontal axis (C) Developed economy
(D) Developing economy
789. Revenue is the income gnerated from the
sale of 795. Cardi B is trending. What happens to her
music?
(A) goods and sevices in a market
(A) Increase Supply
(B) goods and services within an industry (B) Decrease Supply
(C) None of the above (C) Increase Demand
(D) goods from the least cost method of (D) Decrease Demand
production
796. The law of demand states that:
(E) All of the above
(A) price and quantity demanded are in-
790. A system where the government has full versely related
control of economic activities is known as (B) the larger the number of buyers in a
a/an market, the lower will be product price
(A) Capitalistic Economy (C) price and quantity demanded are di-
rectly related
(B) Socialistic Economy
(D) consumers will buy more of a given
(C) Mixed Economy product at high prices than they will at low
(D) Islamic Economy prices
787. A 787. B 787. C 788. B 789. A 790. B 791. C 792. B 793. A 794. A 795. C
796. A 797. C
797. Which of the following is and example of (B) prices are too high relative to con-
economic goods? sumer demand.
(A) Oxygen (C) prices are too low relative to pro-
(B) Sea Water ducer demand
(C) House (D) prices are too high relative to pro-
ducer demand.
(D) Dessert Sane
803. The following is a factor that will not
798. The night before an economics test, you cause the demand curve to shift:
decide to go to the movies instead of
(A) Advertising
studying for the test. You get 50% for
the test-not the 70% you normally score. (B) Population
What was the opportunity cost of your (C) Price
evening at the movies? (D) Consumer expectations
(A) 50%
804. The most fundamental economic problem
(B) 70% is
(C) 20% (A) security.
(D) Nil. (B) health.
799. Which type of economic system encour- (C) scarcity
ages new ideas because people have pri- (D) none of above
vate property? MORE THAN ONE AN-
805. The study of how whole industries and
SWER
nations allocate their scarce resources to
(A) Mixed Market meet their wants and needs.
(B) Free Market (A) Microeconomics
(C) Command (B) Macroeconomcis
(D) Centrally Planned (C) Regional Economics
(D) Para economics
800. PPC is concave to the origin because of:
(A) Increasing MRT 806. Your car payment, mortgage payment,
(B) Diminishing MRT rent etc are all examples of?
(C) Constant MRT (A) Marginal costs
(D) None of these (B) Total costs
(C) Fixed costs
801. A market economy has ownership of (D) Variable costs
property and resources.
(E) Cost benefit analysis
(A) private
(B) government 807. Which part of economic theory aims to
determine income and employment level of
(C) tribal
th eeconomy
(D) none of above
(A) Microeconomics
802. A surplus happens when (B) Macroeconomic
(A) prices are too low relative to con- (C) Neither A nor B
sumer demand. (D) Both A and B
798. C 799. A 799. B 800. A 801. A 802. B 803. C 804. C 805. B 806. C 807. B
808. B
808. What is meant by ‘labour’ in eco- (C) firms sell resources to households.
nomics? (D) firms buy resources from house-
(A) Hard physical work used to produce holds.
manufactured goods
813. What is the basic economic problem?
(B) Human mental and physical effort
used for producing goods and services (A) The imperfect interaction between de-
mand and supply
(C) Natural resources used in the produc-
tive process (B) Market forces determine the equilib-
NARAYAN CHANGDER
rium price level
(D) Risk taking and organising the factors
of production (C) The existence of inequalities
(D) Scarcity:finite resources available to
809. Why the land supply for a particular use satisfy all human needs and wants
is not perfectly inelastic?
(A) Because demand for land is low for 814. What’s the fundamental concept of eco-
particular land use. nomics?
(B) Because the land uses will go to the (A) money can’t buy happiness but it can
optimum use. let you buy your own form of misery
(C) Because land uses can only have sin- (B) having money’s not everything; not
gle use. having it is
(D) Because time affect the demand of (C) anybody who thinks money will make
land. you happy ain’t got money
(D) you can print money but we’re still lim-
810. The law of scarcity ited by our resources #scarcity
(A) Does not apply to rich, developed
countries 815. Production Possibility Frontier can be
(B) Applies only to the less developed (A) Concave
countries (B) Convex
(C) Implies that consumers want will be (C) Straight
satisfied in a socialistic system (D) All of the above can be possible
(D) Implies that consumers want will
never be completely satisfied 816. “It is not from the benevolence of the
butcher, the brewer, or the baker that we
811. Consuming more of one good because of expect our dinner, but from their regard
a change in price of another good is known to their own interest.”-Adam Smith, The
as the Wealth of NationsWhich economic system
(A) income effect is best described by this quote?
(B) substitution effect (A) Mixed Market Economy
(C) elasticity effect (B) Command Economy
(D) demand effect (C) Free Market Economy
812. In the product market
(E) Socialist Economy
(A) firms buy goods and services from
households. 817. Costs that do not change when the
(B) firms sell goods and services to quanity of output produced changes?
households. (A) Fixed Costs
809. B 810. D 811. B 812. B 813. D 814. D 815. D 816. C 817. A

(B) Variable Costs 822. The opportunity cost of 100 kg of rice

(C) Explicit Costs produced on a land which can also produce
(D) Implicit Costs 80 tonnes of wheat is:
(A) 100 tonnes of wheat
818. A list of the amounts of a product that (B) 80 tonnes of wheat
a seller would offer for sale at different
(C) 8000 tonnes of wheat
prices in a defined time period when all
non-price factors are held constant. (D) none of these
(A) Demand Schedule 823. Input costs that may not have a direct
(B) Market Schedule outlay of money. Value of the opportunity
(C) Production Schedule cost.
(D) Supply Schedule (A) Fixed Cost
(B) Variable Cost
819. When firms in an oligopoly successfully
(C) Implicit Cost
collude and do not cheat on a cartel agree-
ment, they can make a long-run economic (D) Explicit Cost
profit similar to
824. The short run is a period of time in which
(A) perfect competition.
(A) the quantity of at least one factor of
(B) monopoly. production is fixed
(C) monopolistic competition. (B) the amount of output is fixed.
(D) non-colluding oligopolies. (C) prices and wages are fixed
(E) the firms in regulated industries. (D) nothing the firm does can be altered
820. Which of the following below would best 825. A rational person does not act unless a.
represent the “Factors of Production? ” the action is ethical.
(A) Land, Labor, Resources and En- (A) b. the action produces marginal costs
trepreneurship that exceed marginal benefits.
(B) Labor, Capital, Entrepreneurship and (B) the action produces marginal benefits
Technology that exceed marginal costs.
(C) Resources, Goods, Needs, Wants and (C) the action makes money for the per-
Services son.
(D) Money, land, resources and educa- (D) none of these answers.
tion.
(E) Land, Labor Capital and Entrepreneur- 826. What is it when a few businesses domi-
ship nate the market?
(A) Monopolistic Competition
821. The supply of perishable good such as ba-
(B) Monopoly
nanas is more price than durable goods
such as smart phones because of lack of (C) Perfect Competition
for perishable goods. (D) Oligopoly
(A) inelastic, good weather 827. Seth is laid off from work because he is a
(B) elastic, good weather life guard at the local water park. He is ex-
(C) inelastic, stock periencing what kind of unemployment?
(D) elastic, stock (A) Structural
818. D 819. B 820. E 821. C 822. B 823. C 824. A 825. C 826. D 827. B 828. B
(B) Seasonal (A) A person

(C) Frictional (B) Something you would like to have but
don’t need to live
(D) Cyclical
(C) Purple
828. What is a want? (D) Something you need to live
1.2 Macro Economics
NARAYAN CHANGDER
1. Comparative advantages show: 6. Dollar amount of all final goods and ser-
(A) outcomes without trading vices produced within a country’s national
(B) who can make more items borders in a year
(C) competition within countries (A) National Income Accounting
(B) Gross Domestic Product
(D) who should produce what item at the
lowest cost (C) Net National Product
(D) Gross National Product
2. According to which approach demand for
money remains more or less constant dur- 7. What are some factors that can shift short-
ing a given period of time? run Aggregate Supply?
(A) Transaction Approach (A) A change in wage rates
(B) Cash balance Approach (B) A change in the cost of raw materials
and imports
(C) Modern Approach
(C) A change in government taxes or sub-
(D) Old Approach
sidies
3. Fiscal policy is concerned with (D) All of the above
(A) government spending and taxation. 8. Sarah buys flour to make cake in her bak-
(B) consumer spending and productivity. ery. The flour is ?
(C) government spending and the money (A) a final good
supply. (B) counted toward GDP
(D) taxation and inflation. (C) the final use.
4. People who work part time (might be over- (D) an intermediate good
qualified for their job) because they cannot 9. Calculated by subtracting depreciation
find full-time jobs from GNP
(A) CPI (A) Gross Domestic Product
(B) Underemployed Workers (B) Gross National Product
(C) Discouraged Workers (C) Net National Product
(D) Expansionary Fiscal Policy (D) Output-Expenditure Model
5. Marginal Productivity Theory is based on: 10. Who is in charge of Monetary Policy
(A) Derived demand of Labour (A) The Government
(B) Capability of Labour to produce (B) The Federal Reserve System
(C) Value of Marginal revenue product (C) The states
(D) All of these (D) The Department of the Treasury
1. D 2. A 3. A 4. B 5. D 6. B 7. D 8. D 9. C 10. B
1.2 Macro Economics 81
11. Which one of the following is most likely (B) shift the aggregate supply curve left-
to lead to an increase in spending on im- ward.
ports? (C) decrease Canada’s exports and in-
(A) A fall in the exchange rate crease Canada’s imports.
(B) A rise in unemployment (D) increase Canada’s exports and de-
(C) A rise in the rate of Value Added Tax crease Canada’s imports.
(VAT) 17. Subsistence Wage theory is based on min-
(D) A cut in income tax rates imum wages for human existence as pop-
ulation increases as wages increase is
12. The way the government chooses to con- based on which law?
trol the money supply is called
(A) Ricardo’s natural law of labour
(A) monetary policy (B) Malthusian Law
(B) open market operation (C) Adam Smith wage theory
(C) reserve requirement and discount (D) Mill Theory
rate
(D) fiscal policy 18. The “cost” of credit is known as this.
(A) Credit score
13. Which of the following is not a part of (B) Savings
profits? (C) Deductible
(A) Corporate Tax (D) Interest
(B) Dividends
19. Occurs when a fundamental change in the
(C) Retained Earnings
operations of the economy reduces the de-
(D) Royalty mand for workers and their skillsUse rich-
text editor
14. As per Social Progress Index, safety is a
(A) unemployment rate
(A) Basic human need (B) frictional unemployment
(C) structural unemployment
(B) Foundations of well-being
(D) cyclical unemployment
(C) Opportunity
(D) Socio-economic factor 20. value of current gross domestic product
adjusted for inflation
15. Most countries try to maintain an inflation (A) GDP
rate of per year.
(B) real GDP
(A) One % or less (C) inflation
(B) Two to three % (D) none of above
(C) Four to five %
21. The multiplier effect means that
(D) Six to seven %
(A) consumption is usually several times
16. The net exports effect suggests that a de- as large as savings
crease in Canada’s price level relative to (B) a change in consumption can cause a
other countries will: larger change in investment
(A) shift the aggregate demand curve left- (C) an increase in investment can change
ward. GDP by a larger amount
11. D 12. A 13. D 14. A 15. B 16. D 17. B 18. D 19. C 20. B 21. C
(D) a decline in MPC can cause GDP to (C) lower taxes

rise by a larger amount (D) Lower the federal funds rate
22. Matt Damon, a manager at a Taco Bell, re- 27. Which of the following is NOT calculated
ceived a $5, 000 increase in his annual into the Gross Domestic Product (GDP)?
disposable income. Suppose his marginal (A) investment
propensity to consume is 0.90. How much
(B) net exports
of the $5, 000 increase will Damon save?
(C) aggregate supply
(A) $1000
NARAYAN CHANGDER
(D) government spending
(B) $4500
(C) $4700 28. In economics, scarcity means that:
(D) $300 (A) Resources will never run out.
(E) $500 (B) The world is rapidly running out of re-
sources.
23. With an upward-sloping short-run as (C) There is a finite amount of resources.
curve, an increase in gov. expenditure will
(D) There are not enough resources to go
most likely
around.
(A) reduce the price level
(B) increase real gross domestic product 29. The labor force consists of
(C) shift the short-run aggregate supply (A) everyone who has a job
curve to the right (B) all employed workers minus all unem-
(D) shift both the AD curve and the LRAS ployed workers
curve to the left (C) all employed workers minus all mili-
tary workers
24. The Federal Reserve Bank’s activities are (D) all employed and unemployed civilian
controlled by workers
(A) the President
(B) Board of Governors 30. Who owns the Federal Reserve System?
(C) Congress (A) all commercial banks in the country
(B) all banks in the country
(D) the citizens
(C) the federal government
25. Which one of these definitions best de- (D) member banks
scribe ‘Opportunity Costs’?
(A) The cost of making one decision over 31. Completed goods counted in the GDP
another. (A) Final Goods
(B) The cost for the opportunity to buy (B) Durable Goods
anything you want. (C) Intermediate Goods
(C) The opportunity that will cost you (D) Non-Durable Goods
loads of money.
32. A period of high economic activity and high
(D) none of above employment is:
26. If the economy is in a recession, the FED (A) A recovery
could do all of the following EXCEPT (B) A recession
(A) lower discount rate (C) A boom
(B) buy securities (D) A slowdown
22. E 23. B 24. B 25. A 26. C 27. C 28. C 29. D 30. D 31. A 32. C 33. A
33. The economy must operate at maximum 39. It is the continuing increase of the general
capacity refers to price level in the market.
(A) full employment (A) Inflation
(B) price stability (B) Deflation
(C) economic growth (C) Stagflation
(D) equitable distribution of income (D) Recession
40. Which of the following is NOT a macroeco-
34. Gross domestic product after adjustments
nomic issue?
for inflation is known as
(A) Unemployment.
(A) Real GDP
(B) Inflation.
(B) GDP Per Capita (C) The wages paid to footballers.
(C) National GDP (D) Economic growth.
(D) Current GDP
41. How does inflation rate affect currency
35. What is the best measurement of Eco- value/exchange rate?
nomic Growth? (A) Higher inflation leads to depreciating
(A) Real GDP currency & vice versa
(B) Nominal GDP (B) Increasing inflation leads to more
favourable exchange rates
(C) Real GDP per Capita
(C) Higher inflation leads to currency ap-
(D) C + I + G + (X-M)
preciation
36. The short-run aggregate supply curve will (D) Lower inflation leads to more
shift to the right when favourable exchange rate
(A) energy prices increase 42. Which of the following helps to develop &
(B) government regulation increases expand the microeconomics theories?
(C) prices of inputs decrease (A) Macroeconomics
(D) productivity rates decrease (B) Keynes
(C) Theory of Income
37. A decrease in government spending will (D) Adam Smith
cause a(n):
(A) Decrease in the quantity of real out- 43. Unemployment measures include
put demanded (A) Students
(B) Decrease in aggregate demand (B) People who want to work longer
hours but can’t
(C) Increase in aggregate demand
(C) Long term sick
(D) Increase in the quantity of real output
(D) Those out of work but not seeking
demanded
benefits
38. The LM curve expresses the equilibrium in 44. The crowding out effect can only occur if
the
(A) factor market (A) government deficit spends.
(B) product market (B) government runs a surplus.
(C) money market (C) personal savings rate increases.
(D) services market (D) economy begins to boom.
34. A 35. C 36. C 37. B 38. C 39. A 40. C 41. A 42. A 43. D 44. A 45. B
45. Which entitlement program takes the 51. Income of self employed is partly:
largest part of the federal budget? (A) Wages
(A) Disaster relief (B) Dividend
(B) Social Security (C) Profit
(C) Veterans Affairs (D) Both a and c
(D) Housing assistance
52. Saying that net exports are positive is the
46. It is the real gross national product (GNP) same as saying that
NARAYAN CHANGDER
that measures the total income of an econ- (A) there is a current account surplus
omy. (B) there is a capital account surplus
(A) Unemployment (C) there is a current account deficit
(B) Inflation (D) the same weight of goods has been
(C) Output imported as were exported
(D) Economic growth 53. Inflation in the range of 1 to 3 percent per
year
47. GDP that is NOT adjusted for inflation is (A) Deflation
(A) real GDP (B) Creeping inflation
(B) nominal GDP (C) Hyperinflation
(C) price level (D) Price level
(D) net national product
54. The transaction demand for money is very
48. Which one is considered to be business closely associated with money’s use as a
fixed investment? (A) Store of value
(A) Build a new house (B) Standard unit of account
(B) Increase stock in warehouse (C) Measure of value
(C) Build a new factory plant (D) Medium of exchange
(D) Buy a sharia mutual fund (E) Standard of deferred payment
49. Which would be least appropriate for ex- 55. Occurs when workers with less skills, tal-
pansionary fiscal policy ent, or education are replaced by machines
that do their jobs
(A) Increase taxes
(A) technological unemployment
(B) Decrease taxes
(B) frictional unemployment
(C) Increase government spending
(D) Combination of decreasing taxes and (D) cyclical unemployment
increasing spending
56. When the government increases the tax
50. Which theory is called Iron Law of rate the marginal propensity to consume
Wages? will
(A) Subsistence Theory (A) Increase
(B) Wage Fund Theory (B) Decline
(C) Marginal Productivity Theory (C) No change
(D) Modern Theory of Wages (D) zero
46. C 47. B 48. C 49. A 50. A 51. D 52. A 53. B 54. D 55. A 56. B
57. If the Federal Reserve undertakes a policy 62. The value of all the final goods and ser-
to reduce interest rates, international cap- vices produced within a nation in a given
ital flows will be affected in which of the year.
following ways? (A) Gross Domestic Product
(A) Long run capital outflows from the US (B) per capita GDP
will decrease (C) Gross National Product
(B) Long-run capital inflows to the US will (D) none of above
increase
63. Which of the following is not a determi-
(C) Short run capital outflows from the US nant of aggregate demand?
will decrease
(A) Change in Consumer Spending
(D) Short run capital inflows to the US will (B) Change in Political Parties
decrease
(C) Change in Government Spending
58. When the Government saves more than it (D) Change in investment Spending
spends 64. Prices rise because demand is higher than
(A) Budget what producers can supply.
(B) Budget Surplus (A) Wage Price
(C) Budget Deficit (B) Demand Pull
(C) Cost Push
(D) Price Level
(D) none of above
59. The total value of goods and services pro- 65. The U.S. can produce 50 cars and 25 tools.
duced within the borders of a country dur- Peru can produce 20 cars and 15 tools.
ing a specific time period, usually one year. What is the opportunity cost of producing
(A) GDP a car in the U.S.?
(B) GNI (A) .5 tools
(C) GDP per capita (B) .5 cars
(D) HDI (C) .75 cars
(D) 1.3 tools
60. Macroeconomics focuses on the study of
66. It is the list all final goods and services
economics from the standpoint of
sold within an economy for a period of
(A) individual economic units time.
(B) a typical firm (A) Gross Domestic Product
(C) a typical household (B) Gross National Product
(D) the entire economy (C) Consumer Price Index
(D) Market Basket of Goods
61. Type of unemployment that occurs when
people take time to find a job. 67. What function is money serving when you
use it when you go shopping?
(A) Seasonal Unemployment
(A) A store of value
(B) Structural Unemployment (B) A medium of exchange
(C) Frictional Unemployment (C) A medium of deferred payment
(D) Cyclical Unemployment (D) A unit of account
57. D 58. B 59. A 60. D 61. C 62. A 63. B 64. B 65. A 66. D 67. B 68. B
68. Which of the following studies economics 74. What can one assume from the follow-
as a whole? ing headline:“President and Congress Feud
(A) Microeconomics Over Fiscal Policy”?
(B) Macroeconomics (A) The President and Congress cannot
(C) both Micro and Macroeconomics agree on a tax plan and/or budget.
(D) none of above (B) The President favors higher taxes,
but Congress opposes them.
69. It shows the cycle of goods and services (C) Congress and the President cannot
NARAYAN CHANGDER
in an economy. agree on defense spending.
(A) Circular flow of goods
(D) Congress and the President cannot
(B) Circular flow of money agree on interest rates.
(C) Circular flow of the economy
(D) Circular flow of resources 75. Which of the following might cause supply
to increase on a Micro graph?
70. When one decision is made, the next best (A) Government subsidizing tomato pro-
alternative not selected is called duction
(A) economic resources (B) firms providing electricity and power
(B) opportunity cost going out of business
(C) scarcity (C) An increase in government taxation
(D) comparative disadvantage on textbook producers
(E) production (D) A natural disaster destroying farmers
ability to harvest their crops
71. The following are macroeconomics objec-
tives, EXCEPT 76. When inflation is high the of the dollar
(A) price stability decreases
(B) full employment (A) cost value
(C) high economic growth (B) purchasing power
(D) unjust distribution of income (C) importance
72. Do you remember the accurate formula of (D) validity
Inflation Rate (%)?
77. The current account shows
(A) CPI Current Year-CPI Previous Year x
(A) international movement of goods and
100% CPI Current Year
services
(B) CPI Previous Year-CPI Current Year x
100% CPI Current Year (B) international movement of capital
(C) CPI Previous Year-CPI Current Year x (C) foreign exchange market
100% CPI Previous Year (D) international movement of invest-
(D) CPI Current Year-CPI Previous Year x ments
100% CPI Previous Year
78. An increase in interest rates is most likely
73. The near money is also known as to have the following effect
(A) Cashless (A) lower rates of saving
(B) Cheque (B) higher consumption
(C) Bond money (C) lower exchange rates
(D) Quasi money (D) reduced inflationary pressure
69. C 70. B 71. D 72. D 73. D 74. A 75. A 76. B 77. A 78. D
79. The 4 Factors of Production are: 84. Which of the following is not true about
(A) Land, Money, Enterprise & Buildings the limitations of GDP as a measure of
welfare?
(B) Labour, Money, Raw materials, &
Land (A) Household productions are not in-
cluded in GDP
(C) Land, Labour, Needs, & Wants
(B) Health and life expectancy is not con-
(D) Land, Labour, Capital, & Enterprise sidered in GDP
(C) Leisure time is not measured in GDP
80. If Mr. Woodward’s disposable income in-
creases from $600 to $650 and her level (D) Marketable transactions are not ac-
of personal consumption expenditures in- counted in GDP
crease from $480 to $520, you may con-
85. In the circular flow of income model, which
clude that her marginal propensity to
one of the following equations is correct?
(A) consume is 0.8 (A) Income = Output = Expenditure
(B) consume is 0.4 (B) Income = Output = Injections
(C) save is 0.8 (C) Output = Expenditure = With-
(D) save is 0.4 drawals
(D) Expenditure = Income = Injections
81. All other things being equal, in the short = Withdrawals
run, a decrease in aggregate demand in an
economy is most likely to result in a reduc- 86. In which part of the GDP calculation does
tion in this fit? The US military spends $5 billion
(A) government spending on welfare ben- on five new helicopters.
efits (A) Consumer spending
(B) the unemployment rate. (B) Government spending
(C) the budget deficit. (C) Investment spending
(D) the balance of payments deficit on the (D) Net exports
current account. 87. Goods used to create finished products
82. Changes in price level (A) Final Goods
(B) Non-Durable Goods
(A) Shift the AD curve left (decrease)
(C) Intermediate Goods
(B) Shift the AD curve right (increase)
(D) Durable Goods
(C) Move along the AD curve
(D) Shift the AS curve right (increase) 88. What is represented on the “X” axis on
the AD/AS Model?
(E) Shift the AS curve left (decrease)
(A) price level
83. The rate of economic growth is measured (B) price
by (C) Real GDP
(A) (original/difference) x 100 (D) Nominal GDP
(B) difference x 100
89. Plants and fertilizer are complements. If
(C) potential-actual level of output the price of fertilizer increases, what will
(D) (difference/original) x 100 happen in the market for plants?
79. D 80. A 81. D 82. C 83. D 84. D 85. A 86. B 87. C 88. C 89. D 90. B
(A) supply increase 95. If the government increases spending but

(B) supply decrease does not bring in enough tax revenue, this
will create a
(C) demand increase
(A) budget surplus
(D) demand decrease
(B) trade surplus
90. Opportunity costs is MOST RELATED which (C) trade deficit
concept? D absolute advantage (D) budget deficit
(A) A price floors
NARAYAN CHANGDER
96. Which of the following would be consid-
(B) B scarcity ered unemployed?
(C) C elasticity (A) A recent college graduate looking for
(D) D absolute advantage a job
(B) A stay-at-home parent
91. All other things being equal, an economy (C) A 14-year-old student who babysits
is most likely to experience demand-pull for extra cash
inflationary pressure when it has
(D) A retired grandmother
(A) a high rate of productivity growth
(B) a positive output gap. 97. John Keynes argued that if the econ-
omy was “stuck” in a recession, that
(C) an increase in the value of its ex- should actively “prime the pump” or steer
change rate. the economy in the short-run
(D) an increase in the rate of interest (A) government
92. A decrease in the general price level (B) business investment
(C) international trade
(A) Deflation
(D) federal reserve
(B) Inflation
(C) Hyperinflation 98. A set of ideas about the economy to be
organized in a logical framework
(D) Price level
(A) Economic model
93. Congress approves a budget that allocates (B) Economic theory
spending on defense, education, social pro- (C) Economic system
grams, etc., but also increases taxes to (D) Macroeconomics
pay for this. What does this plan define?
(A) the government’s monetary policy 99. Taxing & spending to slow the economy is
referred to as
(B) the government’s revenue
(A) budget surplus
(C) the government’s reserves require-
(B) monetary policy
ment
(C) contractionary policy
(D) the government’s fiscal policy
(D) budget deficit
94. LP stand for In Speculative motive 100. a rise in the cost of goods and services
(A) Least percentage (A) inflation
(B) Liquidity preference (B) discount rate
(C) Low price (C) interest
(D) Liquidity price (D) monetary policy
91. B 92. A 93. D 94. B 95. D 96. A 97. A 98. B 99. C 100. A 101. B
101. The goal of fiscal policy is to achieve full 106. The for a given year is 100 times
employment by shifting this curve: the ratio of nominal GDP to real GDP that
(A) Long Run Aggregate Supply year.
(B) Aggregate Demand (A) GDP Deflator
(C) Short Run Aggregate Supply (B) Market Basket
(D) Phillips (C) Aggregate Price Level
(D) Inflation Rate
102. Which worker BEST illustrates the prob-
lem of structural unemployment? 107. The lesson of is to forget about the
(A) a computer programmer laid off dur- money that’s irretrievably gone and in-
ing an economic turndown stead to focus on the marginal costs and
benefits of future options.
(B) a steelworker whose skills are no
longer marketable (A) budget constraints
(C) a landscaper who can’t find a job in (B) sunk cost
the winter (C) marginal analysis
(D) a college graduate looking for her (D) marginal utility
first full-time job
108. Aggregate supply is the total amount:
103. If the MPC is .80, the government spend- (A) Of labour supplied by all households
ing multiplier is:
(B) Of products produced by a given in-
(A) 4 dustry
(B) 5 (C) Produced by the government
(C) 3 (D) Of goods and services produced in an
(D) 2 economy
104. Nominal GDP= 20002012 Population= 109. Macroeconomics is mostly focused on:
20002012 Price Level Index= 100What is (A) why specific businesses fail.
the Real GDP?
(B) the individual markets within an econ-
(A) 2000 omy.
(B) 1 (C) the economy as a whole.
(C) 100 (D) only the largest industries in the econ-
(D) 20 omy
105. In the circular flow diagram, which sec- 110. In a mixed economy, what to produce
tions buys goods and services from the and how much to produce are determined
product market and provides productive by
resources to the factor market (A) a central planning agency
(A) Households (B) a private planning agency
(B) Firms (C) large corporations and small en-
(C) Corporations trepreneurs
(D) Limited Liability Partnership (D) markets and the government
102. B 103. B 104. A 105. A 106. A 107. B 108. D 109. C 110. D 111. D
111. This group is responsible for implement- (B) K, R

ing fiscal policy (C) K, M
(A) Supreme Court (D) R, K
(B) Federal Reserve Board
117. In many cases, it is reasonable to refer
(C) Council of Economic Advisors
to the as the price.
(D) U.S. Congress
(A) sunk cost
112. Equitable distribution of in incomes is to (B) opportunity cost
NARAYAN CHANGDER
reduce the gap between and (C) marginal utility
(A) developed country; development (D) budget constraint
country
(B) urban area; rural area 118. Dollar value of all final goods, services,
and structures produced in one year with
(C) rich people;poor people
labor and property supplied by U.S. resi-
(D) old generation;young generation dents
113. When there is an increase in the produc- (A) Gross Domestic Product
tion of goods and services in the economy, (B) Gross National Product
we have (C) Net National Product
(A) Economic Development (D) Output-Expenditure Model
(B) Economic Regression
119. A government reduces its budget deficit.
(C) Economic Growth
Other things remaining the same, the most
(D) Economic efficiency likely short-run impact of this policy is
114. What does the vertical axis represent on (A) a reduction in the current account
the aggregate demand curve? deficit.
(A) Total Input (B) a reduction in unemployment
(B) Total Output (C) an increase in the rate of economic
growth.
(C) Price Level
(D) an increase in the rate of inflation.
(D) Both A & B
120. Raising taxes and cutting entitlements
115. All other things being equal, an economy
such as Medicare and WIC benefits is what
has a budget surplus when
type of policy?
(A) exports are greater than imports.
(A) Expansionary Policy and Fiscal
(B) tax revenue is greater than govern-
(B) Contractionary Policy and Monetary
ment spending.
(C) Expansionary Policy and Monetary
(C) government tax revenue increases at
a faster rate than its spending. (D) Contrationary Policy and Fiscal
(D) government spending is greater than 121. The percentage of a nations labor force
tax revenue. that is unemployed.
116. In Pigou’s equation, it is and not (A) Gross Domestic Product
which is a more important determinant of (B) Inflation
the price level. (C) Unemployment
(A) M, K (D) Consumer Price Index
112. C 113. C 114. C 115. B 116. C 117. B 118. B 119. A 120. D 121. C 122. B
122. When savings leaks out of the circular (B) Input costs increase
flow model, what happens to it? (C) Input costs remain the same
(A) It flows to the government. (D) none of above
(B) It flows to borrowers who then inject
128. In a year when the federal government
it back into the economy.
spends more money than it collects in
(C) Savings does not leak out of the circu- taxes, the immediate result is
lar flow model. (A) the federal budget deficit
(D) It shrinks the size of the economy. (B) an increase in GDP
123. Is the sale of products and services in for- (C) a decrease in GDP
eign countries that are sourced or made in (D) a federal budget surplus
the home country. 129. The total amount of money that a coun-
(A) Import try’s government has borrowed, by vari-
(B) Export ous means
(C) Trade (A) National Debt
(D) Global Market (B) Social Security
(C) Grants
124. GDP is calculated in the expenditure ap- (D) Stock options
proach by how much is spent on ?
(A) goods and services 130. Which is an example of government
(B) final good and services. spending?
(A) Road Construction
(C) wages, rent, interest, and profit
(B) Clothes
(D) factors of production
(C) Housing
125. Open market operations are (D) Food
(A) the processes by which money enters 131. The Fed does not
into circulation.
(A) print money
(B) reserves greater than the required (B) regulate banks
amounts
(C) serve as a lender of last resort
(C) the buying and selling of government
(D) control the money supply
securities to alter the supply of money.
(D) rates of interest banks charge on 132. Jack saves his money in a piggy bank.
short-term loans to their best customers. He is using money as a
(A) medium of exchange
126. Attending college is a case where the (B) store of value
exceeds the monetary cost.
(C) unit of measurement
(A) Marginal utility
(D) bartering tool
(B) Marginal analysis
(C) Opportunity cost 133. A business where a few people share
ownership and responsibility is
(D) Budget constraint
(A) corporation
127. Cost-push is a type of inflation caused (B) oligopoly
when (C) partnership
(A) Input costs decrease (D) sole proprietorship
123. A 124. B 125. C 126. C 127. B 128. A 129. A 130. A 131. A 132. B 133. C
134. A
134. In the gross domestic product, the 139. In MV the M represent

largest dollar amount is (A) Velocity of circulation of money
(A) consumer spending (B) Quantity of money
(B) rental payments (C) Mobilisation
(C) net exports of goods and services (D) Macro
(D) government purchases of goods and
services 140. Advantage:When a producer can pro-
NARAYAN CHANGDER
duce a good/service at a lower opportu-
135. The economy is producing at full capacity nity cost than another producer.
when it (A) Absolute
(A) grows more slowly than its long-run (B) Consumption
trend rate of growth
(C) Hippopotamus
(B) has neither a positive nor a negative
(D) Comparative
output gap
(C) is also in equilibrium on its balance of 141. The general increase in the price of goods
trade. and services
(D) grows more rapidly than its long-run (A) Retention
trend rate of growth.
136. Importing more than exporting is (C) Unemployment
(A) trade surplus (D) Inflation
(B) trade deficit
142. Which of the following type of spending
(C) balance of trade do not fall under GDP?
(D) balance of payment (A) Investment
(B) Government
137. In an economy, the government reduced
its spending by £4bn at the same time ex- (C) Imports
ports rose by £20bn. As a result of these (D) Consumer
changes, national income rose by £20bn.
The size of the multiplier is 143. The use of government spending and rev-
(A) 0.75 enue collection to influence the economy.
(B) 1 (A) Monetary Policy
(C) 1.2 (B) Fiscal Policy
(D) 1.25 (C) Congressional Policy
(D) Executive Policy
138. What is the relationship between rate of
interest and demand for money? 144. is the most basic economic problem.
(A) Positive (A) Scarcity
(B) Negative (B) Labor
(C) Constant (C) Greed
(D) None (D) Capital
135. B 136. B 137. D 138. B 139. B 140. D 141. D 142. C 143. B 144. A 145. B
146. B
145. When people can’t find a job because of (B) The economy is in an expansion phase
a lack of demand for their skills or type of (C) Aggregate supply is increasing
labor, this is called?
(D) The economy is facing a slowdown
(A) Frictional Unemployment
(B) Structural Unemployment 151. A person who uses and buys goods and
(C) Cyclical Unemployment services
(D) none of above (A) money
(B) producer
146. A measuring tool for inflation that calcu- (C) consumer
lates the prices of what the average con-
(D) economics
sumer buys
(A) Aggregate Demand 152. Inflation in the range of 500 percent a
(B) Consumer Price Index year and above
(C) Aggregate Supply (A) Deflation
(D) Market Price (B) Inflation
(C) Hyperinflation
147. A statistical series that can be used to
measure changes in prices over time (D) Price level
(A) Price index 153. Which of the following is NOT included in
(B) Real GDP a country’s GDP?
(C) Consumer price index (A) Consumer Spending
(D) Market basket (B) Business Spending
(C) Government Spending
148. What is the formula for the expressing
the consumption (spending) method of cal- (D) Net Exports
culating GDP? (E) Net Imports
(A) Debt+Inflation = prosperity
154. Stagflation might be caused by
(B) C+I+G+ (X-Y) = GDP
(A) Increase in technology
(C) Change in price/ Change in Quantity
(B) Decrease in the price of raw materi-
Demanded
als
(D) E= MC2
(C) Increase in the price of raw materials
149. What does X represent in calculating net (D) Decrease in the money supply
imports? X-M
(A) Imports 155. Refer to Figure 2-2. At Point A in
the production possibilities graph shown
(B) Exports
above, the economy:
(C) Expenditures
(A) is using its resources efficiently while
(D) None of the Above producing clothing but no food.
150. If aggregate demand and real GDP are (B) is using its resources efficiently while
beginning to fall and the unemployment producing food but no clothing.
rate is beginning to rise, what conclusion (C) is using its resources efficiently to
can you draw? produce both food and clothing.
(A) The economy is in recovery (D) is not using its resources efficiently.
147. A 148. B 149. B 150. D 151. C 152. C 153. E 154. C 155. D 156. A
156. is a way to illustrate how a regular (B) Someone on maternity/paternity

group of goods and services changes over leave
time. (C) An owner of a new business who isn’t
(A) Consumer Price Index making a profit yet
(B) Final Goods (D) A prisoner at a state prison who
(C) Market Basket makes commissary money from working
(D) Durable Goods in the prison laundry
NARAYAN CHANGDER
157. RBI may use a contractionary policy 162. Which of the following statements is
when TRUE according to the Simple Quantity The-
ory of Money?
(A) the economy is slowing down.
(A) an increase in the money supply will
(B) there has been a negative economic
cause inflation
shock.
(B) an decrease in the money supply will
(C) when inflation is too high.
cause inflation
(D) during a recession.
(C) an increase in the quantity of goods
158. Which of the following is NOT a macroe- purchased will cause inflation
conomics objective? (D) inflation is only caused by changes in
(A) To achieve equal distribution of in- the weather
come
163. Who provides top leadership for the Fed-
(B) To maintain domestic price instability
eral Reserve?
(C) To achieve full employment of re-
(A) Member Banks
sources
(B) Federal Open Market Committee
(D) To achieve sustainable economic
growth (C) Board of Governors
(D) Federal Depository Institutions
159. It captures the prices of goods and ser-
vices that consumers typically buy. 164. Macroeconomics deals with
(A) Total Weighted Price (A) Economic aggregates
(B) Weighted Price (B) The behavior of the electronics indus-
(C) Consumer Price Index try
(D) Consumer Product Index (C) The behavior of firms
(D) The activities of individuals units
160. Select three reasons productivity
changes between countries and regions. 165. What is the definition of “Aggregate De-
(A) Personal Preferences mand”
(B) PPP (A) The total spending in a nation on
(C) Physical Capital goods and services at a given price level.
(D) Human Capital (B) How much someone is willing and
able to pay for Agricultural products.
(E) Technological Progress
(C) When you order an Aggie to do some-
161. All of the following would be considered thing.
employed except: (D) The total amount of products pro-
(A) Someone who has only a part-time job duced by businesses in a nation.
157. C 158. B 159. C 160. C 160. D 160. E 161. D 162. A 163. C 164. A 165. A
166. B
166. Which one of the following best de- 171. The savings function indicates functional
scribes the action of the accelerator theory relationship between
of investment? (A) Income and expenditure
(A) Firms decide to invest more following (B) Income and consumption
a cut in bank rate (C) Saving and income
(B) Firms invest in capital equipment due (D) Expenditure and rate of interest
to higher economic growth
172. Number of unemployed persons divided
(C) Improved business confidence
by the total number of persons in the civil-
causes firms to increase their investment
ian labor force
(D) Large profits encourage firms to in- (A) unemployment rate
vest in new capital equipment
167. If the government adopts a contrac- (C) structural unemployment
tionary fiscal policy, where it tries to re- (D) cyclical unemployment
duce government debt, it might
173. What is money?
(A) increase spending and taxation
(A) only currency(bills) that is printed by
(B) eliminate taxation and spending the federal government
(C) increase taxation and reduce spend- (B) any thing you want it to be
ing (C) any item accepted as payment for
(D) increase spending and reduce taxa- goods or services
tion (D) none of the above
168. It measures the output produced by fac- 174. A higher GDP generally correlates to a(n)
tors of production located in the domestic standard of living.
economy. (A) higher
(A) Economic Growth (B) lower
(B) Gross Domestic Product (C) unrelated
(C) Gross National Product (D) none of above
(D) Inflation 175. The three sector economy do not include
169. GDP per capita is (A) household
(A) The population divided by total GDP. (B) firms
(B) Investment as a percentage of GDP. (C) the whole world
(D) government
(C) Total GDP divided by total population.
(D) The same as GDP per worker. 176. In the narrowest definition of money,
M1, savings accounts are excluded be-
170. In the Keynesian aggregate-expenditure cause they are
model, if the MPC is 0.75 and gross invest- (A) not a medium of exchange
ment increases by $6 billion, equilibrium
(B) not insured by federal deposit insur-
GDP will increase by
ance
(A) $6 billion (C) available from financial institutions
(B) $8 billion other than banks
(C) $1.25 billion (D) a store of purchasing power
(D) $24 billion (E) interest-paying accounts
167. C 168. B 169. C 170. D 171. C 172. A 173. C 174. A 175. C 176. A
177. If the cost of producing cell phones in- 182. A firm operating at ‘X’ produces 70
creases, the price and equilibrium quantity whips and 60 saddles. It changes produc-
of cell phones will most likely change in tion to ‘Y’ producing 20 whips and 90 sad-
which of the following ways? dles. The opportunity cost of this produc-
(A) P Increase Q increase tion change is
(B) P Increase Q decrease (A) 20 whips
(C) P decrease Q increase (B) 30 saddles
(C) 50 whips
NARAYAN CHANGDER
(D) P decrease Q decrease
(E) P no change Q decrease (D) 60 saddles
178. One measure of the economy macroe- 183. The percentage of people not working is
conomists pay attention to to study the known as
pace of growth in the economy is (A) unemployment rate
(A) supply (B) real GDP
(B) inflation (C) Economic Growth
(C) demand (D) Full Employment
(D) equilibrium price
184. The unemployment rate is calculated as
the number of
179. The amount of money that the public
wants to hold in the form of cash will (A) unemployed persons divided by num-
ber of employed persons
(A) be unaffected by any change in inter-
est rates or the price level (B) persons in the labour force divided by
the number of unemployed
(B) increase if interest rates increase
(C) unemployed divided by size of the
(C) decrease if interest rates increase
labour force
(D) increase if the price level decreases
(D) employedpersons divided by number
(E) decrease if the price level remains of unemployed persons
constant
185. A market structure where many busi-
180. A general rise in the price level of prod- nesses sell an identical product but com-
ucts is known as: pete based on price
(A) Hyperinflation (A) monopoly
(B) Cost-Push phenomenon (B) monopolistic
(C) Inflation (C) pure or perfect competition
(D) Deflation (D) oligopoly
181. When writing a check, it is a good idea 186. In the short run, an increase in a govern-
to use ment budget deficit is most likely to reduce
(A) pencil (A) imports
(B) erasable pen (B) unemployment.
(C) blue or black ink pen (C) interest rates.
(D) red pen (D) inflation.
177. B 178. B 179. C 180. C 181. C 182. C 183. A 184. C 185. C 186. B 187. C
187. D 188. A
187. Identify all examples of wealth 193. An index that measures the prices of a
(A) Salary market basket of goods that typical con-
(B) Benefits sumers purchase.
(A) Consumer Price Index
(C) Pension fund
(B) Federal Reserve
(D) Savings
(C) Bank
188. The income that households have after (D) Deflation
taxes is called
194. Which of the following would be a pro-
(A) Disposable income
gressive tax?
(B) Rental income
(A) All people pay a 15 percent income
(C) Deferable income tax.
(D) National income (B) People pay 10 percent tax on property
whether it is worth $50, 000 or $500, 000.
189. “The Fed” refers to the
(C) All people pay a 15 percent income
(A) Federal Bureau of Investigation tax.
(B) Federal Government (D) People earning $35, 000 pay 10 per-
(C) Federal Reserve System/Bank cent tax, while people earning $100, 000
(D) Federal Income Tax pay 30 percent tax.
190. Which one of the following best de- 195. In which part of the GDP calculation does
scribes how an initial change in expendi- this fit? Australia exported $6 billion
ture leads to a larger impact upon the level worth of goods in 2018, but imported $10
of national income? billion in goods.
(A) The accelerator process (A) Consumer spending
(B) Fiscal policy (B) Government spending
(C) Cost-push inflation (C) Investment spending
(D) The multiplier effect (D) Net exports
196. Each year, any deficit in the federal gov-
191. Which of the following is included in the
ernment’s budget adds to the country’s
calculation of personal income, but not na-
tional income? (A) national income
(A) Undistributed corporate profits (B) national debt
(C) national surplus
(B) Social security contribution
(D) none of above
(C) Corporate dividend
(D) Transfer payment 197. Assuming fixed exchange rates, if coun-
try Z’s rate of inflation increases relative
192. This is what we call the thing that is sac- to it trading partners, Country Z’s imports
rificed when we choose one thing over an- and exports will most likely change in
other which of the following ways?
(A) biodiversity (A) Imports:DecreaseExports:Decrease
(B) land (B) Imports:DecreaseExports:Increase
(C) opportunity cost (C) Imports:IncreaseExports Decrease
(D) capital (D) Imports:IncreaseExports:Decrease
189. C 190. D 191. D 192. C 193. A 194. D 195. D 196. B 197. C 198. A
198. With all else held constant, an increase (A) Decrease in supply of toilet paper
in aggregate demand tends to cause an in- (B) Decrease in demand of toilet paper
crease in
(C) Increase in supply of toilet paper
(A) employment
(D) Increase in demand of toilet paper
(B) nominal interest rate
(C) GDP and national income 204. The goals of macroeconomics include
(D) unemployment rates (A) Economic stagnation
(B) Higher price level
NARAYAN CHANGDER
199. If the price of imported Canadian lumber
(C) Imbalance in balance of payment
increases
(D) Full employment
(A) AS shifts left (decrease)
(B) AS shifts right (increase) 205. A positive impact on consumption could
(C) AD shifts left (decrease) be due to
(D) AD shifts right (increase) (A) better funding conditions
(B) higher interest rates
200. The consumer price index (CPI) is de-
signed to measure changes in the (C) higher tariffs abroad
(A) spending patterns of urban con- (D) none of above
sumers only
206. It is the measure of the total income
(B) spending patterns of all consumers earned by domestic citizens.
(C) wholesale price of manufactured (A) Economic Growth
goods
(D) prices of all goods and services pro-
(C) Gross National Product
duced in an economy
(D) Inflation
(E) cost of a select market basket of
goods and services 207. Economists use the term “Land” to refer
to all sorts of natural resources. Which of
201. The primary role of the Federal Reserve
the following resources fit into this cate-
Bank is to steer the economy by
gory?
(A) controlling the budget
(A) Land
(B) setting spending levels.
(B) Lumber
(C) controlling the money supply.
(C) Oil
(D) loaning out money.
(D) All of the Above
202. Which of these is NOT an example of a
need? 208. Which one of the following is most likely
to lead to a fall in aggregate investment?
(A) Water
(A) A reduction in the level of unemploy-
(B) Food
ment
(C) watch
(B) An increase in spare capacity in the
(D) Shelter economy
203. COVID-19 causes a world wide pan- (C) A reduction in the average level of in-
demic which lead to a toilet paper short- terest rates
age. What lead to the shortage? (D) An increase in aggregate demand
199. A 200. E 201. C 202. C 203. D 204. D 205. A 206. C 207. D 208. B 209. D
209. The rate of unemployment is 214. A lifeguard is hired on at Pensacola

(A) How many people are not in work / Beach for the summer, and is told the job
Total Population x 100 will end in August. This is an example of
unemployment.
(B) Total Unemployed/Total population x
100 (A) Frictional
(B) Seasonal
(C) Total unemployed/Workforce x 100
(C) Structural
(D) Total unemployed/ (total employed +
(D) Cyclical
total unemployed) x 100
215. The branch of economies that examines
210. What function is money serving when the functioning of individual industries and
you deposit money in a savings account? the behavior of individual decision making
(A) A checkable deposit units is
(B) A unit of account (A) microeconomics
(C) A medium of exchange (B) macroeconomics
(D) A store of value (C) positive economics
(D) normative economics
211. During the recession more businesses
shut down, causing unemployment. This 216. What does the circular flow model of the
type of unemployment is: economy illustrate?
(A) Seasonal (A) Injections and leakages that take
place in the economy.
(B) Frictional
(B) How fast the economy grew during
(C) Structural the previous ten years.
(D) Cyclical (C) The price of every product and ser-
vice.
212. Which of the following is MOST likely to
(D) How households pay rent to the gov-
promote economic growth?
ernment.
(A) A decrease in business tax credits for
investment spending 217. An example of expansionary fiscal policy
would be
(B) A decrease in federal student educa-
tion grants (A) cutting taxes.
(C) An increase in investment in tools and (B) cutting government spending.
machinery (C) cutting production of consumer
goods.
(D) A decrease in the labor force partici-
pation rate (D) cutting prices of consumer goods.
218. Total value of all final goods and services
213. Which of the following formulas is used
produced in the economy during a given
to compute for GDP using the expenditure
year, calculated with the prices current in
method?
the year in which the output is produced
(A) C+I+G+(X-M) (A) GDP
(B) C+I+G-(X+M) (B) Nominal GDP
(C) AG+IN+SE (C) Real GDP
(D) C+I+G / (X-M) (D) Real GDP per Capita
210. D 211. D 212. C 213. A 214. B 215. A 216. A 217. A 218. B 219. D
219. All of the following are sections of the 224. Systematic upturns and downturns of
circular flow diagram but real GDP
(A) Product market (A) business cycles
(B) factor market (B) business fluctuations
(C) Firms (C) peak
(D) Flea Market (D) trough
220. Corn Flakes are an inferior good. If mini- 225. According to Keynes, marginal efficiency
NARAYAN CHANGDER
mum wage increases, what will happen in of capital is also known as
the market for Corn Flakes? (A) . Rate of discount
(A) rightward shift in supply (B) Rate of interest
(B) leftward shift in supply (C) Rate of capital formation
(C) rightward shift in demand (D) None of these
(D) leftward shift in demand
226. What causes cost push inflation
221. Which of the following is NOT the objec- (A) An increase in demand for goods and
tive of macroeconomics? services
(A) Achieving a low inflation rate (B) An increase in supply
(B) Achieving a high economic growth (C) A rise in production costs passed on
(C) achieving deficits balance of payment to consumers
(D) Narrow down the gap between poor (D) A fall in the price of imports
and rich
227. Which of the following is not an eco-
222. The actions the Federal Reserve System nomics indicator discussed in class?
takes to influence the level of real GDP and (A) Presidential Policy
the rate of inflation in the economy. (B) Inflation
(A) Fiscal Policy (C) Gross Domestic Product
(B) Monetary Policy (D) Unemployment
(C) Congressional Policy
228. The Federal Reserve’s two primary goals
(D) Executive Policy
DO NOT include
223. Assume the economy is in long run (A) maximum sustainable employment
equilibrium and the government increases (B) stable inflation
spending on healthcare (C) diversification of the economy
(A) AD will shift right and an inflationary (D) none of above
gap will result
(B) AD will shift left and a recessionary 229. The long-run growth rate of an economy
gap will result will be increased by an increase in all the
(C) AS will shift right and an inflationary following EXCEPT
gap will result (A) capital stock
(D) AS will shift left and a recessionary (B) labor supply
gap will result (C) real interest rate
(E) No change will result (D) rate of technological change
220. D 221. C 222. B 223. A 224. A 225. A 226. C 227. A 228. C 229. C 230. C
230. A statistical series used to measure price 236. Cars, TVs, computers belong in which
changes for a representative sample of fre- part of the GDP formula? GDP =
quently used household items is called the C+I+G+(X-M)
(A) producer price index (A) Consumption Expenditures
(B) composite index of leading economic (B) Investment Expenditures
indicators (C) Government Expenditures
(C) consumer price index (D) Net Imports
(D) implicit GDP price deflator
237. To stimulate the economy, the Federal
231. Macroeconomics is the study of Reserve decides to increase the money
(A) a business entity supply. Which of the following actions will
they MOST LIKELY take?
(B) economy as a whole
(A) raise the reserve requirement
(C) individual units
(B) raise the discount rate
(D) selected markets
(C) sell bonds
232. How many factors affecting money sup- (D) lower the reserve requirement
ply?
238. Theory of multiplier assumes MPC to be
(A) 1
(A) Less than one
(B) 2
(B) Equal to one
(C) 3
(C) Constant
(D) 4
(D) Greater than one
233. How can a nation increase its En-
239. The total demand for goods and services
trepreneurship factor of production.
in an economy is known as;
(A) Conquer another nation
(A) Aggregate demand
(B) Protect intellectual property with (B) National demand
Patent and copywright laws.
(C) Gross national product
(C) Invest in research and development
(D) Economy-wide demand
(D) Improve farming techniques
240. Which of the following is a stage of the
234. When people can’t find a job because the business cycle?
economy is not doing well due to a reces-
(A) Procession
sion, this is called?
(B) Trough
(C) Slide
(B) Structural Unemployment
(D) Valley
(C) Cyclical Unemployment
(D) none of above 241. All other things remaining the same,
which of the following events would di-
235. Which is an example of things that would rectly increase the size of the UK’s na-
be listed in a “market basket.” tional debt? An increase in
(A) Car (A) mortgage borrowing from UK banks
(B) Salmon (B) overseas lending to UK firms
(C) Bread (C) the UK’s current account deficit
(D) Xbox (D) the UK government’s budget deficit
231. B 232. D 233. B 234. C 235. C 236. A 237. D 238. C 239. A 240. B 241. D
242. B
242. In the circular flow diagram, which sec- 247. Which strictly monetary policy combina-
tion is where business purchase productive tion would work best to slow down an
resources needed to make products? overheating, overproducing economy?
(A) Product market (A) decrease the discount rate, buy trea-
(B) factor market sury securities
(C) households (B) increase taxes, increase the discount
(D) firms rate
NARAYAN CHANGDER
243. How can a nation change the “Land” fac- (C) increase the discount rate, sell trea-
tor of production. sury securities
(A) Increase the birth rate (D) increase taxes, lower government
(B) Increase immigration spending
(C) Discover a new resource like oil or
248. A point outside the PPC would represent
gold
(D) Invest in new buildings or infrastruc- (A) An efficient use of resources
ture (B) Future output once producers be-
come more efficient
244. Which of the following actions might the
Federal Reserve take together that will (C) An inefficient use of resources
both increase the money supply? (D) A combination that cannot be
(A) open market sales, decreasing the re- achieved due to scarcity
serve requirement (E) Full employment of resources in the
(B) increasing the reserve requirement, economy
decreasing the discount rate
(C) open market purchases, increasing 249. Assuming Ramen is an inferior good, a
the reserve requirement decrease in income will shift the:
(D) open market purchases, decreasing (A) supply curve for Ramen to the left
the reserve requirement (B) supply curve for Ramen to the right
245. Which one of the following is most likely (C) demand curve for ramen to the right
to be classified as a supply-side policy? (D) demand curve for ramen to the left
(A) An increase in subsidies on essential
(E) there is no shift
goods
(B) An increase in the government budget 250. Which of the following would be counted
deficit in this year’s GDP?
(C) A reduction in the exchange rate
(A) The value of a loan taken out this year
(D) A reduction in welfare benefits
(B) The value of a television produced
246. A is a hypothetical set of consumer last year but sold this year
purchases of goods and services. (C) The sale of a previously occupied
(A) Market Basket house
(B) Aggregate Price Level (D) The value of a savings bond sold by
(C) Consumer Price Index (CPI) the federal government to investors this
(D) Producer Price Index (PPI) year
243. C 244. D 245. D 246. A 247. C 248. D 249. C 250. B 251. B

251. Which person would be hurt the MOST (C) Direct and non-proportionate
by sudden inflation? (D) Indirect and non-proportionate
(A) Pedro, who receives income from his
256. Which of the following combinations
stock portfolio.
of changes in government spending and
(B) Marie, who is retired and lives on a taxes is necessarily expansionary?
fixed income.
(A) Govt spending increase and taxes in-
(C) Jim, who works at a company that crease
gives raises every year. (B) Govt spending increase and taxes de-
(D) Sally, who has a fixed payment on a crease
mortgage. (C) Govt spending decrease and taxes do
not change
252. The determination of price and the be-
haviour of individual markets are studied (D) Govt spending decrease and taxes in-
in On the other hand, topics such as crease
business cycles, unemployment and infla- (E) Govt spending decrease and taxes de-
tion are studied in crease
(A) macroeconomics; microeconomics 257. Which of the following is studied in
(B) demand; supply analysis Macroeconomics?
(C) microeconomics; macroeconomics (A) Individual income
(D) none of the above (B) individual savings
(C) individual output
253. Bobby earns 23, 258.45 pesos per (D) general price level
month. He has a total monthly contribu-
tion or 857.50 pesos to SSS, pag-ibig, and 258. An increase in the value of currency is
PhilHealth. How much is his Taxable in- called
come? (A) appreciation
(A) 3, 762.28 (B) depreciation
(B) 3, 726.28 (C) trade surplus
(C) 267, 811.40 (D) exchange rate
(D) 268, 811.40 259. Unemployment caused by by a deficiency
of total spending. The overall demand for
254. The U.S. can produce 10 ipads or 20 goods and services decreases.
phones. China can produce 20 ipads or 30
phones. Who should produce what?
(A) U.S.-ipadsChina-phones
(C) Seasonal Unemployment
(B) U.S. phonesChina-ipads
(D) Cyclical Unemployment
(C) both should produce ipads
(D) they should not specialize 260. Defined as the percentage of the total
number of people in the labor force who
255. What is the relationship between price are unemployed
and quantity of money according to trans- (A) Underemployment Rate
action approach? (B) Inflation Rate
(A) Direct and proportionate (C) CPI
(B) Indirect and proportionate (D) Aggregate Supply
252. C 253. D 254. B 255. A 256. B 257. D 258. A 259. D 260. A

261. Macroeconomics is concerned with all of 267. What are the two methods economists
the following except use to measure Gross Domestic Product
(A) the growth of real output (GDP)?
(B) the level of unemployment (A) The earnings and depreciation ap-
(C) the general level of prices proach.
(D) production methods and costs (B) The receipts and payments method.
(C) The income and expenditure ap-
262. The foreign Trade multiplier is also proach.
NARAYAN CHANGDER
known as multiplier
(D) The nominal and the actual methods.
(A) Export
(B) Import 268. The major economic problem caused by
(C) Balance of payment unemployment is the
(D) Substitution (A) loss of wages and salaries to house-
holds
263. Which of the following policy changes (B) level of job search allowances paid by
represents a contractionary fiscal policy? the government
(A) A decrease in income tax (C) loss of economic efficiency and the
(B) A decrease in the budget deficit waste of resources
(C) An increase in government spending (D) higher crime rate
(D) An increase in the rate of interest
269. Due to inflation, the Federal Reserve de-
264. Bring goods or services into a country cides to decrease the money supply. Which
from abroad for sale of the following will they MOST LIKELY
(A) Export due?
(B) Globalization (A) lower the discount rate
(C) International trade (B) implement an “easy money” policy
(D) Import (C) buy bonds
265. Lotteries, markets, barter, rationing, (D) raise the reserve requirement for
and redistribution of income are all meth- banks
ods commonly used to
270. Unemployed plus employed
(A) A allocate scarce resources.
(A) Unemployed
(B) B collect taxes.
(B) Unemployment Rate
(C) C improve productivity.
(C) Labor Force
(D) D invest in education and technology.
(D) Total Population
266. If the unemployment rate is rising and
GDP is falling, the fiscal policy action 271. Shows the relationship between the ag-
that the federal government should MOST gregate price level and the quantity of ag-
likely follow is gregate output supplied in the economy
(A) decreasing taxes (A) Aggregated Supply
(B) decreasing spending (B) Aggregated Demand
(C) decreasing the money supply (C) Budget
(D) decreasing the reserve requirement (D) Labor force
261. D 262. A 263. B 264. D 265. A 266. A 267. C 268. C 269. D 270. C 271. A
272. B
272. The total value of goods produced and (D) Sri Lanka will experience a trade sur-
services provided in a country during one plus.
year is called
(A) Gross National Product 277. If the government’s fiscal policy involves
stopping high inflation, which choices
should Congress consider?
(C) Consumer Price Index
(A) either cut taxes or increase govern-
(D) Market Basket of Goods ment spending
273. The Federal Open Market Committee (B) either increase taxes or cut govern-
(A) combines the Board of Governors and ment spending
the 12 Reserve Banks (C) either lower the discount rate or sell
(B) contains approximately 8.039 com- bonds
mercial banks (D) either raise the discount rate or buy
(C) ensures safety deposits bonds
(D) none of above
278. Which statement is MOST LIKELY true if
274. Structural unemployment is most likely the Fed increases the reserve requirement
to occur because of and the discount rate?
(A) labour being temporarily unemployed (A) the economy is in a trough
when moving between jobs. (B) they are trying to limit inflationary
(B) fluctuations in the level of aggregate pressures
demand. (C) loans are difficult to get because little
(C) the seasonal nature of certain occupa- money is circulating
tions (D) there has been a recent increase in
(D) long-term changes in the pattern of taxes
demand for the products of particular in-
dustries. 279. Which of the following is an example of
an intermediate good?
275. Advantage:When a producer can pro-
(A) a pair of shoes at the mall
duce more of a good/service than another
producer. (B) a new car
(A) Absolute (C) lumber purchased to build a house
(B) Consumption (D) a fee paid to real estate agent for sale
(C) Hippopotamus of a house
(D) Comparative 280. What do Social Security taxes pay for?
276. If the government of Sri Lanka spends (A) benefits to federal workers and mili-
$13 million more this year than it re- tary personnel
ceives in revenue, what can we say for (B) benefits to those who are unem-
certainty? ployed
(A) Sri Lanka’s revenue will grow. (C) transportation and training expenses
(B) Sri Lanka will experience a budget for low-income people
deficit. (D) benefits to older citizens, surviving
(C) Sri Lanka will experience a trade family members of wage earners, and
deficit. people with certain disabilities
273. A 274. D 275. A 276. B 277. B 278. B 279. C 280. D 281. A

281. When people are in the process of look- 287. GDP per capita is found by dividing a
ing for a job after being fired or are tran- country’s GDP by it’s
sitioning to a new position, this is called? (A) population.
(A) Frictional Unemployment (B) average birth rates.
(B) Structural Unemployment (C) number of households.
(C) Cyclical Unemployment (D) none of above
(D) none of above
288. If a country faces high inflation, the pur-
NARAYAN CHANGDER
282. It is the rate of change of the general chasing power will be
price level
(A) decrease
(A) Unemployment
(B) increase
(B) Output
(C) constant
(C) Economic growth
(D) no affected
(D) Inflation
289. Which of the following will increase the
283. Taxes that increase as income increases.
US trade deficit?
(A) Progressive
(A) US firms buying technologically ad-
(B) Sin
vanced computers from Germany
(C) Proportional
(B) European citizens traveling in large
(D) Estate numbers to the United States
284. A nation’s gross domestic product (GDP): (C) A US company being hired to build a
(A) is always some amount less than C + production plant in another country
I + G +Xn. (D) GDP in a poor French accent
(B) is the dollar value of all final output
290. If the required reserve ratio is 25% and
produced by its citizens, regardless of
a customer deposits $300 into her check-
where they are living
able deposit, the money supply will if
(C) can be found by summing C + I + S the banking system does NOT hold any ex-
+ Xn. cess reserves.
(D) is the dollar value of all final output (A) be unchanged
produced within the borders of the nation
(B) increase by $1, 200
during a specific period
(C) increase by $900
285. Changes in real GDP are used to measure (D) increase by $1, 000
(A) inflation.
(B) the level of employment. 291. If you live on a fixed income, how will
(C) economic growth you be affected by inflation.
(D) the distribution of income (A) You are hurt because your purchasing
power has decreased.
286. When consumption increases, employ- (B) You are helped because your purchas-
ment usually ing power has increased.
(A) remains the same (C) You are helped because interest rates
(B) decreases rise.
(C) increases (D) You are hurt because interest rates
(D) enters stagflation rise.
282. D 283. A 284. D 285. C 286. C 287. A 288. A 289. A 290. B 291. A
292. Macroeconomic model used to analyze 297. Suppose you have a $20 iTunes gift card
the economy’s performance with which you can buy (download) songs
(A) Gross Domestic Product or videos. Songs cost $1.00 each and
videos cost $2.00 each. What is the op-
(B) Gross National Product portunity cost of one video?
(C) Net National Product (A) It is constant and equal to 1/2 song
(D) Output-Expenditure Model (B) It is constant and equal to 2 songs
(C) It is $1.00
293. According to the Circular Flow of Income
(D) An increases in cost as more videos
and Expenditures, how does income flow
are purchased
from firms to households?
(A) Borrowing for investment 298. Which of the following is a monetary pol-
icy that might be used to reduce inflation?
(B) C + I + G
(A) decreasing taxation
(C) Savings
(B) decreasing the discount rate
(D) Aggregate Income
(C) open market sales
294. The total value of all final goods and ser- (D) increasing government spending
vices produced in a country in a given year. 299. What causes demand pull inflation?
(A) Gross Domestic Product (A) rise in price due to a decrease in sup-
(B) Consumer Price Index ply
(C) Inflation (B) a rise in price level due to an increase
in consumption
(D) Unemployment
(C) a rise in price due to an increase in
295. The buying and selling of government the cost of production
securities in order to alter the supply of (D) a decrease in price due to a decrease
money. in supply
(A) Open Market Operations 300. At the point at which it is currently pro-
(B) Expansion ducing, Britain must give up the produc-
tion of 75 hats to produce 25 additional
(C) Discount Rate
sweater. The opportunity cost of produc-
(D) Trough ing 3 hats is sweater (s).
(A) 1
296. The goal of macroeconomics is
(B) 22
(A) to explain the economic changes that
(C) 1/3
affect a particular household, firm or mar-
ket (D) 3
(B) to explain the economic changes that 301. Why is there scarcity?
affect many households, firms, and mar- (A) Because theory dictates it.
ket simultaneously (B) Because our unlimited wants exceed
(C) to devise policies to deal with market our limited resources
failures, such as monopoly, externalities, (C) Because human wants are limited.
common resources and public goods (D) Because the opportunity set deter-
(D) all of above mines this.
292. D 293. D 294. A 295. A 296. D 297. B 298. C 299. B 300. A 301. B 302. A
302. Farmer Joe cannot plant crops during 307. Why will government have to change
summer. In this case, he is taxes by a larger magnitude than they
(A) seasonally unemployed would change spending.
(B) fictionally unemployed (A) Some spending leaks out of the econ-
omy through international trade
(C) cyclically unemployed
(B) Some portions of tax cuts are saved
(D) structurally unemployed and not spent
(C) Government spending is too ineffi-
NARAYAN CHANGDER
303. Two-sectors economy involved and
cient a process
(D) Tax cuts are always superior to gov-
(A) government; household
ernment spending
(B) firms; government
308. Refer to Figure 2-2. When the economy
(C) government; whole world
moves from Point A to Point B in the dia-
(D) household; firms gram above:
(A) All of the above occur.
304. Contractionary policy does what?
(B) the economy increases production of
(A) Increase government spending
both clothing and food.
(B) Decrease government spending (C) the economy operates at its produc-
(C) Decrease reserves tive capacity once it reaches Point B.
(D) Decrease Taxes (D) the economy begins using its re-
sources efficiently to produce both food
305. When a government it spending more and clothing.
money than it is making, it is operating in
a 309. Someone without a job, but looking
(A) deficit (A) Frictional Unemployment
(B) surplus
(C) Discouraged Workers
(C) IOU
(D) Unemployed
(D) interest
310. The central bank of the United States
306. Other things staying equal, if the price that sets policies designed to control the
of a key resource used to produce product money supply is called the
X falls, the: (A) Federal Reserve
(A) product supply curve of X will shift (B) Congressional Bank
Right
(C) Bank of the United States
(B) product demand curve of X will shift (D) Bank of U.S. Governors
to the right
(C) product supply curve of x will shift to 311. Fiscal policy aims to influence the eco-
the left nomic activity through the use of
(D) product demand curve of x will shift (A) money supply and interest rate.
to the left (B) exchange rate.
(E) both supply and demand of X will in- (C) government spending and taxation.
crease (D) direct and indirect taxation.
303. D 304. B 305. A 306. A 307. B 308. A 309. D 310. A 311. C 312. B
312. The shifting of a country’s production 317. What term best describes the total de-
possibilities curve to the right will most mand for final goods and services at a
likely cause range of price levels during a stated period
(A) inflation to increase of time?
(B) the long-run aggregate supply curve (A) Aggregate Supply
to shift to the right (B) Total Supply
(C) net exports to decline (C) Total Demand
(D) the long-run aggregate supply curve (D) Aggregate Demand
to shift to the left
318. Which of the following is more likely to
313. An economics system in which economic lead to inflation?
decisions and the pricing of goods and ser- (A) Increased aggregate demand at full
vices are guided by the interactions of employment
a country’s individual citizens and busi-
nesses. (B) A rise in the exchange rate
(A) Market Economy (C) A rise in unemployment
(B) Traditional Economy (D) Lower indirect taxation
(C) Mixed Economy 319. Products that would be used in calculat-
(D) Command Economy ing GDP include
314. What happens to the production possibil- (A) Toys manufactured in China at a fac-
ity curve when economic growth occurs? tory owned by a U.S. company.
(A) The curve shifts to the left (B) Cars manufactured in Tennessee at a
factory owned by a Japanese automobile
(B) The curve shifts to the right
company.
(C) The curve becomes a straight line
(C) The purchase of a U.S. Treasury Bond.
(D) The curve does not change
(D) A social security payment to a retired
315. A government is planning to reduce its Georgian.
budget deficit by increasing taxes on to-
bacco and reducing spending on defence. 320. Monetary Policy is defined as
These policies are most likely to (A) decisions of the Federal Reserve Sys-
(A) change the pattern of economic activ- tem that determine the money supply.
ity in the long run. (B) taxing and spending decisions of the
(B) increase inflation in the long run. United States Government.
(C) increase the level of economic activity (C) interaction of buyers and sellers in
in the short run. the market place.
(D) reduce exports in the short run (D) buying and selling of currency in for-
eign exchange markets.
316. The study of the economy as a whole and
how major sectors of the economy inter- 321. Why is real GDP more accurate than nom-
act. inal GDP?
(A) Incentives (A) It’s adjusted for price changes
(B) Inflation (B) It’s adjusted for depreciation
(C) Unemployed (C) It includes unpaid and paid work.
(D) Macroeconomics (D) It includes unrecorded business.
313. A 314. B 315. A 316. D 317. D 318. A 319. B 320. A 321. A

322. Wages in modern times, just like the (C) Output will not change.
other factors of production are governed (D) The price level will increase.
by (E) The price level will decrease.
(A) government regulation
328. The way the government conducts tax-
(B) labor laws
ing and spending is called what?
(C) supply and demand (A) Monetary Policy
(D) glass ceiling (B) Economic Policy
NARAYAN CHANGDER
323. People who are actively looking for a job (C) Expansionary Policy
but aren’t employed (D) Fiscal Policy
(A) Underemployed 329. An economist for a computer company
(B) Labor Force predicts that a rise in consumer incomes
(C) Unemployed will increase the demand for consumers.
(D) CPI This prediction assumes that:
(A) there are many subs for computers
324. It is when prices of most goods and ser- (B) there are many complementary goods
vices are rising over time for computers
(A) Inflation (C) there are few goods that are substi-
(B) Economy tutes for computers
(C) Rise of the prices (D) computers are normal goods
(D) Socialism (E) computers are inferior goods
325. What is a factor that can change in 330. The three major macroeconomic goals do
Consumer consumption in a national econ- not include
omy? (A) full employment
(A) Changes in interest rates (B) price level stability
(B) Changes in Expectations (C) sustained economic growth
(C) Changes in Wealth (D) high levels of environmental quality
(D) All of the Above 331. What constitutes Fiscal Policy?
(A) Governments trying to change the
326. Activities which are purposely hidden Money Supply
from the view of the government in order
(B) When a government tries to decide
to avoid taxes is known as
who will receive Welfare
(A) Underground Economic Activities
(C) How much a government taxes and
(B) Household Production spends
(C) Economic Activities (D) How often a government holds elec-
(D) All of the options tions.
327. If a reduction in aggregate supply is fol- 332. Supply Curve of Labour is backward
lowed by an increase in aggregate demand, bending or sloping curve due to:
which of the following will definitely oc- (A) Demand and Supply of Labour
cur? (B) Bargaining power
(A) Output will increase. (C) Income and Substitution effect
(B) Output will decrease. (D) Wage differentials
322. C 323. C 324. A 325. D 326. A 327. D 328. D 329. D 330. D 331. C 332. C
333. The calculation of GDP would directly in- (B) The government needs to address the
clude unemployment problem.
(A) the sale of a 25-year-old house. (C) This economy is in the expansion
(B) the income of a person who pays rent phase of a business cycle.
by babysitting for the homeowner’s chil- (D) The Federal Reserve should expand
dren. the money supply.
(C) A dinner at Applebee’s.
339. Which of the following are responsible
(D) the price of the steel used to build a for making fiscal policy decision?
new hotel.
(A) The President and Congress
334. A decrease in the general level of prices (B) The Federal Reserve System
of basic commodities is called (C) The National Council of Economic Ad-
(A) Inflation visors
(B) Deflation (D) The commerce Department
(C) Stagflation
340. All of the following are excluded from
(D) Disinflation GDP except
335. GDP expressed in constant, or unchang- (A) non-market goods and services
ing, (adjusted for inflation) prices is called (B) used goods
(A) real GDP. (C) environmental quality
(B) price level. (D) final goods and services
(C) nominal GDP.
341. Which one is not the motive for liquidity
(D) GNP preference?
336. Real GDP divided by population size (A) Transaction motive
(A) GDP (B) Measurement motive
(B) Real GDP (C) Precautionary motive
(C) Real GDP per Capita (D) Speculative motive
(D) Nominal GDP 342. A business with one owner who has to-
tal control and liability is
337. Economic system that has some market
based elements and some level of govern- (A) Partnership
ment involvement. (B) monopoly
(A) Market Economy (C) corporation
(B) Mixed Economy (D) sole proprietorship
(C) Traditional Economy 343. In which part of the GDP calculation does
(D) Command Economy this fit? You spend $15 at AMC to see the
latest Avengers movie.
338. What would you conclude about an econ-
(A) Consumer spending
omy characterized by increasing gross do-
mestic product (GDP), low unemployment, (B) Government spending
and increasing inflation? (C) Investment spending
(A) This economy is in a slow down. (D) Net exports
333. C 334. B 335. A 336. C 337. B 338. C 339. A 340. D 341. B 342. D 343. A
344. A 345. A
344. GDP that is adjusted for inflation 350. The annual expression of fiscal policy in
(A) real GDP the light of current economic conditions. A
statement of anticipated revenue, expen-
(B) nominal GDP
diture and borrowing by the government
(C) price level in a year
(D) net national product (A) fiscal policy
345. The multiplier effect shows (B) budget
(C) monetary policy
NARAYAN CHANGDER
(A) How spending is magnified in the
economy (D) crowding out effect
(B) How much consumers can spend from
351. The belief that the economy self corrects
their paychecks
and gov. intervention will do more harm
(C) How much the government can spend than good
from their budget (A) fiscal policy
(D) How often the economy can survive (B) classical policy
recessions
(C) Keynesian policy
346. Which of the following will be included (D) Discretionary policy
in national income of India
352. Who initially recognised the relationship
(A) Old age pension
between changes in consumption and net
(B) Subsidies investment?
(C) Scholarship (A) Kurilara
(D) Salaries (B) J.M.Clark
347. Money is not an income earning asset. (C) T.N.Carver
(A) True (D) J.S.Mill
(B) False 353. Which of the following will NOT cause
(C) Neither true nor false the demand for video games to change?
(D) Either true or false (A) a change in the price of a close substi-
tute
348. refers to government revenue, spending, (B) a change in consumer incomes
and debt
(C) a change in the price of video games
(A) Fractional Reserve Banking
(D) a change in consumer tastes
(B) Legal Reserves
(E) a change in consumer preferences
(C) Fiscal
(D) Reserve system 354. Which one of the following is an example
of contractionary fiscal policy?
349. During a recession, which of the follow- (A) Decreasing the supply of credit
ing is likely to occur?
(B) Increasing spending on welfare bene-
(A) an increase in real wages fits
(B) an increase in production (C) Reducing progressive taxation
(C) and increase in the GDP growth rate (D) Increasing the size of the budget sur-
(D) an increase in the unemployment rate plus
346. D 347. A 348. C 349. D 350. B 351. B 352. C 353. C 354. D 355. C
355. Which one of the following is most likely (C) Modern system
to cause demand-pull inflation? (D) Barter system
(A) An increase in indirect taxation.
361. Something that makes people want to
(B) An increase in productivity.
produce more goods and services
(C) A decrease in interest rates.
(A) Incentives
(D) A rise in oil prices.
(B) Macroeconomics
356. It is the decrease in the general level of (C) Inflation
prices of basic commodities. (D) GDP
(A) Inflation
362. Examples of contractionary fiscal policy
(B) Deflation
includes which of the following (choose all
(C) Stagflation correct answers)?
(D) Stagnation (A) Raise taxes on corporations
357. Supply-Side Economic policies are de- (B) Lower the corporate tax rate
signed to increase what? (C) Government increases spending on
(A) Aggregate Supply (both short and research in Antarctica
long run) (D) Government cuts spending on educa-
(B) Aggregate Demand tion
(C) Incomes
363. Macroeconomics approaches the study of
(D) Inflation economics from the viewpoints of
358. Equal to the sum of the employed + un- (A) individual firms
employed (B) individual consumers
(A) Underemployed workers (C) government units
(B) CPI (D) the entire economy
(C) Market Basket
364. A general increase in prices across an
(D) Labor Force economy.
359. The national debt is equal to which of the (A) Gross Domestic Product
following? (B) Consumer Price Index
(A) The value of all government bonds (C) Unemployment
held by the nation’s central bank (D) Inflation
(B) The value of all loans in the nation’s
banking system 365. What would a microeconomist most
likely study?
(C) The current government budget
deficit (A) The relationship between the size of
the money supply and the rate of inflation.
(D) The sum of all past government bud-
get deficits and surpluses (B) The effects of aggregate consumer
debt on overall consumption spending.
360. Exchange of goods and services in return (C) The effects of an income tax reduction
of goods and services is known as on the size of the national budget deficit.
(A) Cashless system (D) How consumers respond to a change
(B) Digital system in gasoline prices.
356. B 357. A 358. D 359. D 360. D 361. A 362. A 362. D 363. D 364. D 365. D
366. A
366. Which part of the check is the least im- 371. A high MPC implies which of the follow-
portant? ing?
(A) memo line (A) a high MPS
(B) signature line (B) a high marginal tax rate
(C) routing numbers (C) A equilibrium level of income near full
(D) check number employment.
(D) a low MPS
367. Unlike a market economy, a command
NARAYAN CHANGDER
economy uses 372. The acceleration principle was first intro-
(A) More centralized planning in eco- duced in to economics in the year
nomic decision making (A) 1916
(B) Consumer sovereignty to make pro- (B) 1917
duction decisions (C) 1918
(C) Its resources more efficiently (D) 1919
(D) Price signals in economic decision
making 373. occurs when a government deficit
(E) The popular vote in making resource drives up the interest rate and leads to re-
allocation decisions duced investment spending.
(A) Crowding Out
368. Europe and North America enter a period
(B) Rate of Return
of recovery from a recession. Other things
remaining the same, the impact on the UK (C) Loanable Funds Market
economy is most likely to be (D) Fisher Effect
(A) an increase in structural unemploy-
374. Inflation is measured by
ment
(A) Consumer Price Index (CPI).
(B) an increase in the current account
deficit (B) Gross National Product (GNP).
(C) a reduction in cyclical unemployment. (C) Gross Domestic Product (GDP).
(D) a reduction in UK economic growth. (D) Securities & Exchange Commission
(SEC).
369. is a decrease in the rate of inflation.
(A) Hyperinflation 375. Which of the following formulas is used
to compute for GDP using the income
(B) Disinflation method?
(C) Deflation
(A) C+I+G+X-M
(D) Stagflation
(B) PI+CI+GI+IBT-S+D
370. Which agency is tasked of creating Mon- (C) AG+IN+SE
etary policy? (D) PI+CI+GI+NFIA-S+D
(A) National Economic Development Au-
thority 376. An increase in the general price level
(B) Department of Finance (A) Deflation
(C) Banko Sentral ng Pilipinas (B) Inflation
(D) Department of Budget and Manage- (C) Hyperinflation
ment (D) Price level
367. A 368. C 369. B 370. C 371. D 372. B 373. A 374. A 375. B 376. B 377. A
377. Fiscal policy is MOST influenced by 383. The belief that the government should
(A) Congress actively manipulate the economy to reach
(B) the Federal Reserve full employment
(A) fiscal policy
(C) the federal board of governors
(B) classical policy
(D) businesses
(C) Keynesian policy
378. Unemployment caused by workers who (D) Discretionary policy
are “between jobs”
384. George is moving to New York and, as a
result, has no job. This is an example of
(C) structural unemployment (A) cyclical unemployment
(D) cyclical unemployment (B) frictional unemployment
379. Housing is a normal good. If average
salary increases, what can we expect to (D) seasonal unemployment
happen in the housing market? 385. What is the simple spending multiplier
(A) rightward shift in supply formula?
(B) leftward shift in supply (A) 1/MPS
(C) rightward shift in demand (B) 1/MPC
(D) leftward shift in demand (C) MPC+MPS
(D) MPC/MPS
380. What is inflation?
(A) rise in all prices 386. Which of the economic systems listed
below involves government ownership of
(B) rise in most prices
the factors of production?
(C) rise in some prices
(A) Command Economy
(D) rise in general prices (B) Market Economy
381. Permanent spending or taxation laws en- (C) Traditional Economy
acted to work counter cyclically to stabi- (D) All of the Above
lize the economy
387. A positive impact on consumption could
(A) Keynesian policy be due to (select several options)
(B) classical policy (A) better expectations about future eco-
(C) non discretionary fiscal policy nomic growth
(D) Discretionary policy (B) lower interest rates
(C) higher income
382. What is the difference between a fixed
(D) higher unemployment
rate exchange system and a floating rate
system? (E) higher minimum wage
(A) Government sets rate vs market sets 388. Which of the following does NOT shift
rate the AD curve?
(B) Doesn’t exist vs does exist (A) Government Spending
(C) Never changing vs always changing (B) Investment Spending
(D) Currency never appreciates vs can ap- (C) Long run aggregate supply
preciate (D) Net Exports
378. B 379. C 380. D 381. C 382. A 383. C 384. B 385. A 386. A 387. A 387. B
387. C 387. E 388. C
389. Americans revive their love of SUV’s and (C) rate of inflation
the newly remodeled, but still “gas guz- (D) change in GDP resulting from a
zling” Hummer. What happens to the mar- change in spending
ket for gasoline?
(A) Demand for gasoline will decrease 395. Comparing real GDP between two con-
(B) Demand for gasoline will increase secutive years is MOST useful in determin-
ing which economic measurement?
(C) Supply for gasoline will decrease
(A) equilibrium price
(D) Supply for gasoline will decrease
NARAYAN CHANGDER
(B) equity
390. Equilibrium in macroeconomics refers to (C) economic growth
(D) exchange rates
(A) total value of output being produced
more than total value of expenditure. 396. When the economy is working properly,
(B) aggregate supply being greater than and there is FULL EMPLOYMENT, what is
aggregate demand the unemployment rate?
(C) aggregate demand being greater (A) 0 to 3 percent
than aggregate supply (B) 4 to 6 percent
(D) aggregate demand being equal to ag- (C) 8 to 10 percent
gregate supply (D) 10 to 12 percent
391. Unemployment that rises during eco-
397. Which one of the following is not part of
nomic downturns and falls when the econ-
the role of the Monetary Policy Committee
omy improves.
of the Bank of England?
(A) Seasonal Unemployment
(A) Achieving the target rate of inflation
(B) Changing Bank Rate
(C) Frictional Unemployment
(C) Reviewing various pieces of macroe-
(D) Cyclical Unemployment conomic data
392. A business owned and managed by a sin- (D) Setting the target rate for inflation
gle individual.
398. An economic system in which the means
(A) Partnership
of production and distribution are pri-
(B) Corporation vately or corporately owned and devel-
(C) Sole Proprietorship oped.
(D) Limited Partnership (A) command economy
393. How many main functions of money? (B) capitalism
(A) 1 (C) traditional economy
(B) 2 (D) none of above
(C) 3 399. The Lowest point in the business cycle
(D) 4 (A) Peak
394. The multiplier is useful in determining: (B) Trough
(A) the full employment rate (C) Expansion
(B) level of business inventories (D) Contraction
389. B 390. D 391. D 392. C 393. C 394. D 395. C 396. B 397. D 398. B 399. B
400. A
400. Deflation in the domestic economy is 405. Which one of the following is a correct
most likely to statement?
(A) cause consumers to delay their pur- (A) Fiscal policy can be used to affect the
chases of consumer durables pattern of economic activity
(B) lead to a rise in interest rates for both (B) The Bank of England is responsible for
borrowers and lenders fiscal policy
(C) lead to a rise in both exports and im- (C) Fiscal policy is only used to affect the
ports demand side of the economy.
(D) reduce the real value of any money (D) The government uses fiscal policy to
that has been lent. control the exchange rate.
406. According to cash balance Approach if M

401. The total value of all final goods and ser-
(Quantity of money) increase by 50% then
vices is called the
P (Price)
(A) gross domestic product
(A) Increase by 100%
(B) consumer price index
(B) Decrease by 100%
(C) business cycle (C) Increase by 50%
(D) net export (D) Decrease by 50%
402. Type of unemployment that occurs as a 407. All other things being equal, a large in-
result of harvest schedules, vacations, or crease in interest rates in the UK is most
when industries make seasonal shifts in likely to
their production schedules. (A) decrease the size of the government
(A) Seasonal Unemployment budget deficit.
(B) Structural Unemployment (B) increase aggregate investment.
(C) Frictional Uneployment (C) lead to an increase in bank lending.
(D) Cyclical Unmeployment (D) decrease house prices.
403. The equilibrium aggregate price level and 408. Which of the following does Economics
level of aggregate output occur when primarily study?
(A) The aggregate demand and aggre- (A) how scarcity can be eliminated
gate supply curve intersect (B) how firms manipulate prices
(B) Real domestic output is at its maxi- (C) how government influences resource
mum level allocation decisions
(C) There is full employment (D) the problem of scarce resources rela-
tive to human wants
(D) The exports are equal to import
409. During which phase of the business cy-
404. Are short-run contractions and expan- cle is production the lowest and unemploy-
sions of economic activity. ment the highest?
(A) Business cycles (A) Peak
(B) Macroeconomics (B) Trough
(C) Long-Run economic growth (C) Expansion
(D) Gross Domestic Product (D) Contraction
401. A 402. A 403. A 404. A 405. A 406. C 407. D 408. D 409. B 410. A
410. The government is concerned that eco- 415. Consumers spending $120 from a wage
nomic growth is too high, unsustainable, increase of $200 implies:
and inflation is resulting. What might be (A) an MPS of 0.8 and a multiplier of 5
done to stop this? (B) an MPS of 0.4 and a multiplier of 2.5
(A) increasing taxation (C) an MPS of 0.6 and a multiplier of 2
(B) open market sales (D) an MPS of 0.4 and a multiplier of 3.5
(C) decreasing taxation 416. Which of the following is the best exam-
NARAYAN CHANGDER
(D) increasing government spending ple of physical capital?
(A) A $100, 000 business loan from a
411. Shows the relationship between the ag-
bank
gregate price level and the quantity of ag-
(B) A business hiring 10, 000 workers at
gregate output demanded by households,
a factory
business, the government, and the rest of
the world (C) A truck for a delivery company
(A) Aggregate Supply (D) An oven for a family of four
(E) An increase in construction jobs
(B) Aggregate Demand
(C) CPI 417. A representative collection of goods and
services used to calculate the Consumer
(D) GDP
Price Index (CPI) is called
412. What is the “full employment” rate of (A) the market basket.
the United States? (B) the price index.
(A) 4-6 percent (C) a census.
(B) 2-3 percent (D) intermediate goods.
(C) 10 percent 418. The way the government conducts spend-
(D) 8-10 percent ing and taxation is called
(A) monetary policy
413. What is the equation of fisher? (B) economic policy
(A) MV=PT (C) free enterprise policy
(B) N=PK (D) fiscal policy
(C) M=PKR 419. A market structure where a few busi-
(D) MT=PV nesses control the selling of a product
(A) monopoly
414. If the government takes an expansion-
(B) oligopoly
ary fiscal policy, where it kickstarts the
economy to fight off recession, they might (C) pure or perfect competition
(D) monopolistic
(A) eliminate taxation and spending 420. It says that the goverment can take ac-
(B) increase spending and taxation tions to alleviate unemployment
(C) increase taxation and decrease (A) Positive analysis
spending (B) Normative analysis
(D) increase spending and decrease tax- (C) Keynesian approach
ation (D) Socialism
411. B 412. A 413. A 414. D 415. B 416. C 417. A 418. D 419. B 420. C 421. B
421. The law of supply states 426. A market structure where one business
(A) the higher the price, the less produc- controls the selling of a product
ers will make (A) monopoly
(B) the higher the price, the more produc- (B) monopolistic
ers will make (C) oligopoly
(C) the lower the price, the more con- (D) pure or perfect competition
sumers will buy
(D) the higher the price, the more con- 427. What is the equation of pigou?
sumers will buy (A) MV=PT
(B) M=PKR
422. Which component of the Federal Reserve
system holds the most power in regards to (C) MT=PV
day to day monetary policy? (D) K=PMR
(A) The Federal Open Market Committee
428. Which of the following scenarios show
(B) The Board of governors frictional unemployment?
(C) Congress and the President (A) John got laid-off from work since the
(D) The 12 District banks company is not making enough money.
(B) Jeff cannot find work since most blue
423. The theory of negotiated wages is based
collar jobs are already filled.
on the
(C) Ramon quit his jobs to move to
(A) idea that wages are influenced by a
Canada for a better job offer.
labor union negotiating with management
for better pay and benefits (D) Alberto works as a call center agent
after graduating nursing
(B) the equilibrium wage created by sup-
ply of labor and demand of labor 429. Government spending in excess of taxa-
(C) concept the more skills and talents tion revenue is commonly known as a
you have the higher your pay should be (A) trade deficit
(D) principle of physical capital and re- (B) budget deficit
source accumulation
(C) balance of payments deficit
424. Which of the following is not concerned (D) current account deficit
with Macroeconomics?
430. What is the definition for “Aggregate
(A) National Income Accounting
Supply? ”
(B) Inflation
(A) How many agricultural products farm-
(C) International Trade ers in a nation provide.
(D) Individual Firm (B) The total amount of products that all
customers in a nation demand put to-
425. How much is MPS in an economy when
gether.
MPC is .8?
(C) The number of aggregates that a na-
(A) .2
tion has left.
(B) 3
(D) The total amount of goods and ser-
(C) 1.6 vices that all businesses in a nation will
(D) .8 produce at every given price level.
422. A 423. A 424. D 425. A 426. A 427. B 428. C 429. B 430. D 431. A 431. C
431. D
431. The goals of monetary policy include (C) Consumer price index
(more than one answer-pick all correct an- (D) Market basket
swers for credit):
(A) regulating the amount of money circu- 437. Monetary policy MOST affects
lating in the economy (A) the amount of taxes citizens pay.
(B) Keep inflation high (B) the amount of money government
(C) Keep inflation low spends
(D) Keep unemployment low (C) the price of stock in sole proprietor-
NARAYAN CHANGDER
(E) Raise the unemployment levels ships
(D) interest rates on loans
432. What happens to the money circulation,
when the FED orders a tight money pol- 438. On a micro graph, which of the following
icy? might cause demand to increase?
(A) more money is put out into circulation (A) A decrease in the price of a comple-
(B) less money is put into circulation mentary good
(C) circulation stays the same (B) increase in sales and income taxes on
(D) interest rates rise consumers
(C) a decline in the popularity of a product
433. Estimate of its total spending and total
(D) A random increase in the price of the
revenue
product
(A) Budget
(B) Budget Surplus 439. The central bank in the USA that regu-
(C) Budget Deficit lates the monetary system
(D) CPI (A) The FED
(B) FDIC
434. Who is most likely to be hurt by infla-
tion? (C) The IRS
(A) someone who borrowed money (D) Social Security
(B) a pensioner on a fixed income 440. Based on the data presented sourced
(C) a business owner from the World Bank, the GDP in the Philip-
(D) the U.K. government pines was worth how much in 2019? (in
US dollars)
435. Which type of economists believe that
(A) 261.92 Billion
the economy is self correcting and does not
need government intervention? (B) 297.48 Billion
(A) Keynesian economists (Keynes) (C) 297.48 Billion
(B) Monetarist economists (D) 376.80 Billion
(C) Supply-side economists 441. Prices at which currencies are traded is
(D) Classical economists (Hayek) called
436. GDP adjusted to remove the distortion (A) Exchange Currency
of inflation (B) Exchange Rate
(A) Price index (C) Foreign Exchange Market
(B) Real GDP (D) Local Currency Demand
432. B 433. A 434. B 435. D 436. B 437. D 438. A 439. A 440. D 441. B 442. A
442. What is the formula for GDP? 447. Real wages can be expressed as:
(A) C + I + G + (X-M) (A) Money Wages/ Index of Price Level
(B) C + I + G / (X-M) (B) Index of Price level/ Money Wage
(C) C + I + G + (population) (C) Price Level/ Money Wage
(D) C + I + G + (Reserve Ratio) (D) Money Wage/ Price level
443. Marginal propensity to save (MPS) 448. When we have to give up one thing, in
order to choose another thing
(A) Plus the MPC = Nation income
(A) opportunity cost
(B) Minus national income = consump-
(B) diversity
tion
(C) capital
(C) Plus intended investment = one
(D) income
(D) Plus the MPC = one
449. If CPI goes from 100 to 300 and your
444. GDP = C + I + G + (X-M) In this model, salary goes from $100, 000 to $200,
the “(X-M)” represents the 000, what happened to your purchasing
(A) Total of the dollar value of goods sent power?
abroad and goods purchased from abroad (A) Increase
(B) Difference between the dollar value (B) Decrease
of goods sent abroad and goods pur- (C) No change
chased from abroad
(D) none of above
(C) Total investments in the United States
by foreign nationals 450. Index of prices received by domestic pro-
(D) Total investments in other nations by ducers for their output
US citizens (A) Price index
(B) Real GDP
445. The measure of a country’s total produc-
(C) Consumer price index
tion of final goods and services in a given
period of time is called (D) Producer price index
(A) Gross National Product 451. An indication of the expansion of the
(B) Gross Domestic Product economy’s total output.
(C) Exports (A) Output
(D) Imports (B) Inflation
(C) Deflation
446. What can cause a production possibilities
(D) Economic Growth
curve to move to the right?
(A) thousands of people move out of the 452. Point in the business cycle when real
country GDP stops decreasing
(B) a drought destroys many crops (A) business cycles
(C) new technology (B) business fluctuations
(D) the population is growing increas- (C) peak
ingly old (D) trough
443. D 444. B 445. B 446. C 447. A 448. A 449. B 450. D 451. D 452. D 453. B
453. How many function of primary function 458. The concept of employment multiplier as
of money? introduced by
(A) 1 (A) Kaldor
(B) 2 (B) Hicks
(C) 3 (C) Keynes
(D) 4 (D) R.F. Kahn
454. GDP is the total value of goods and ser-
NARAYAN CHANGDER
459. The purchase of US government bonds
vices by Japanese investors will be included in
(A) produced all over the world Japan’s
(B) produced in one month (A) current account
(C) produced within a nation’s borders (B) financial account (formerly called cap-
(D) produced by a singl company ital account)
(C) trade deficit
455. If a French firm buys computers from the
(D) imports
US, there would be an increase in which of
the following in the foreign exchange mar-
460. An increase in which of the following is
ket?
consistent with an outward shift in the
(A) Demand for US dollars and supply of production possibilities curve?
euros
(A) Aggregate demand
(B) Demand for both US dollars and Euros
(B) Income tax rates
(C) Supply of US dollars and demand for
(C) Long-run aggregate supply
euros
(D) Exports
(D) Supply of both US dollars and euros
456. Which of the following scenarios would 461. Holistic and psychology based approach
cause the nation’s money supply to in- to measure social welfare is
crease? (A) HDI
(A) Decreasing government spending (B) GDP
(B) Lowering interest rates (C) SPI
(C) Raising interest rates (D) GNHI
(D) Selling bonds to investors
462. Macroeconomics theory studies the fol-
457. Which of these following example can be lowing EXCEPT
counted in GDP? (A) How to determine international trade
(A) Your grandmother wins $10 million in activities
the lottery (B) How to determine the unemployment
(B) Company A takeover by purchasing all and inflation rate
the assets of Company B (C) How to determine the equilibrium in-
(C) Buy mozzarella cheese to store it as come in an economy
restaurant’s inventory (D) How to determine type and quality of
(D) You buy a used copy of this textbook goods to produce
454. C 455. A 456. B 457. C 458. D 459. B 460. C 461. D 462. D 463. A
463. Taxing & spending to help the economy 468. According to Subsistence theory, Wages
grow is referred to as will with increase in population.
(A) expansionary policy (A) increase
(B) monetary policy (B) decrease
(C) contractionary policy (C) equal
(D) none
(D) budget deficit
469. A rightward shift in the aggregate de-
464. If the Federal Reserve is using an expan- mand curve with a horizontal aggregate
sionary monetary policy, where it is trying supply curve will cause employment and
to increase the money supply it would do the price level to change in which of the
all of the following except following ways?
(A) decrease discount rate (A) Increase Employment; Increase
(B) buy bonds on the open market Price Level
(C) increase reserve requirement (B) Increase Employment; No Change to
Price Level
(D) decrease interest payments on re-
(C) No Change to Employment, Increase
serves
Price Level
465. GDP, CPI, and the unemployment rate (D) Increase Employment; Decrease
are all Price Level
(A) signs that the economy is peaking. 470. All of the following might happen as a
(B) signs that the economy is in contrac- result of unanticipated inflation but
tion. (A) Borrowers using a fixed rate of inter-
(C) economic indicators used to deter- est will have to pay less back
mine the state and direction of the econ- (B) Lenders who loan at a fixed rate will
omy. not gain as much profit
(D) the result of economic expansion. (C) lenders who lend at a variable rate
will lose potential profit
466. Which economic theory believes that (D) Value of money will decrease
Government spending to increase Aggre-
gate demand is the key to having a healthy 471. What do taxes collected under the Fed-
and growing economy? eral Insurance Contribution Act (FICA)
fund?
(A) Monetarist Theory
(A) Social Security and Medicaid
(B) Polulist Theory (B) Social Security and Medicare
(C) Marxist Theory (C) Medicare and Medicaid
(D) Keynesian Theory (D) Medicaid and Supplemental Security
Income
467. Typical basket of of goods and services
472. Economists teach us that countries with
(A) Aggregate Supply
higher GDP per capita and higher stan-
(B) Expansionary Fiscal Policy dards of living are
(C) Market Basket (A) more productive
(D) Budget (B) more peaceful
464. C 465. C 466. D 467. C 468. B 469. B 470. C 471. B 472. A 473. C
(C) more socialist (B) decrease government spending and

(D) more capitalist decrease taxation.
(C) increase government spending and
473. The Furlough Scheme is estimated to cost decrease taxation.
the Government how much by the time it
(D) increase government spending and
come to a close in the Autumn?
increase taxation.
(A) £80bn
(B) £90bn 479. Is the branch of economics that studies
NARAYAN CHANGDER
(C) £100bn the behavior and performance of an econ-
(D) £120bn omy as a whole
(A) Long-Run economic growth
474. Why does the Federal Reserve require (B) Microeconomics
banks to keep a percentage of their funds
in reserve? (C) Macroeconomics
(A) to buy bonds (D) GDP
(B) to balance the budget 480. An economy is currently experiencing a
(C) to supply cash withdrawals positive output gap. In the short run the
(D) to ensure business investment economy is most likely to experience
(A) An increase in inflation
475. Which phase of the business cycle would
be most closely associated with an eco- (B) An increase in unemployment
nomic contraction? (C) An increased budget deficit
(A) Trough (D) An increase in trend growth
(B) Peak
481. Which of the following is the best mea-
(C) Recession sure of a nation’s standard of living?
(D) Recovery (A) Real GDP per capita
476. Monetary policy decisions are decided (B) Nominal GDP
by: (C) Unemployment
(A) Congress (D) Inflation
(B) Senate
482. Supporters of Keynesian economics be-
(C) The Fed
lieve that
(D) President
(A) government should be used as a tool
477. When the US is is making more money to increase demand for goods.
than it is spending, it is operating in a (B) demand for goods increases when
(A) deficit prices rise.
(B) suprlus (C) taxes have a strong negative influ-
(C) interest ence on economic output.
(D) IOU (D) the government should have a limited
role in regulating the economy.
478. To promote higher economic growth, the
best way is to 483. Which of the following is not the area of
(A) decrease government spending and macroeconomics:
increase taxation. (A) Unemployment rate
474. C 475. C 476. C 477. B 478. C 479. C 480. A 481. A 482. A 483. B
(B) Market structure (C) the effects of reduction of wages on

(C) Inflation rate agricultural output
(D) Foreign exchange rate (D) the general price level
484. The balanced budget theorem holds 489. What is not a criterion used to measure
goods, when the tax is levied welfare in HDI?
(A) . Regressive (A) Education
(B) Progressive (B) Opportunity
(C) Proportional (C) Standard of living
(D) Lump sum (D) Health and life expectancy
485. Expansionary fiscal policy is so named 490. Average GDP per Capita is better known
because it: as:
(A) A country’s standard of living
(A) involves an expansion of the nation’s
money supply. (B) How much a country makes on aver-
age from imports
(B) is designed to expand real GDP.
(C) The average amount businesses
(C) necessarily expands the size of gov-
spend on the stock market
ernment.
(D) The average amount of investment
(D) is aimed at achieving greater price
done by citizens
stability.
491. The slope of the is determined by the
486. Advances in technology in an economy
relative price of the two goods, which is
are most likely to lead to
calculated by taking the price of one good
(A) increases in long run aggregate sup- and dividing it by the price of the other
ply good.
(B) increases in short run aggregate sup- (A) budget constraint
ply
(B) utility level
(C) a higher price level
(C) opportunity set
(D) falling real GDP (D) personal preference
487. What is the relationship between a bud- 492. How does a budget deficit relate to the
get deficit and the national debt? national debt?
(A) They are the same (A) They are the same thing.
(B) The national debt makes a budget (B) Budget deficits are more than the na-
deficit more likely tional debt.
(C) A budget deficit adds to the size of the (C) Budget deficits reduce the size of the
national debt. national debt.
(D) There is no connection between a (D) Budget deficits create the national
budget deficit and the national debt. debt.
488. Macroeconomics is concerned with the 493. Monthly salary:45, 387.92Monthly
study of contributions:SSS:581.30Pag-ibig fund:100.00PhilHealth:23
(A) how Malaysian respond to oil price much is the Annual Tax Due?
(B) production methods and costs (A) 63, 427.86
484. C 485. B 486. A 487. C 488. D 489. B 490. A 491. A 492. D 493. B
(B) 63, 429.86 499. Which one is not the factor affecting sup-
(C) 63, 428.86 ply of money?
(D) 63, 430.86 (A) Bank credit to private sector
(B) Balance of payment situation
494. If a country has a comparative advan- (C) Velocity of circulation of money
tage over another country it is said that
(D) Speculative purpose
(A) Country A can produce more than
Country B 500. What is an action of monetary policy?
NARAYAN CHANGDER
(B) Country A should not trade with Coun- (A) reduce taxes
try B (B) changing reserve requirements
(C) Country A can produce at a lower op- (C) increase spending
portunity cost than Country B (D) borrow money for deficit
(D) Country A and Country B have no di-
rect relationship to each other 501. Unemployment that occurs as a result of
a recession or an economic downturn is
495. What does Per Capita Mean? (A) frictional
(A) Per Household (B) structural
(B) Per Object (C) seasonal
(C) Per Worker (D) cyclical
(D) Per Person
502. What is the simple tax multiplier for-
496. The situation of workers between jobs is mula?
called (A) 1/MPS
(A) frictional unemployment (B) 1/MPC
(B) structural unemployment (C) MPC+MPS
(C) cyclical unemployment (D) MPC/MPS
(D) seasonal unemployment 503. A four-sector economy is called
497. If nominal interest rates are 12% and (A) injection
the rate of inflation is 7% the real rate of (B) open economy
interest is (C) simple economy
(A) 12% (D) closed economy
(B) 5%
504. Find the unemployment rate.Labor
(C) 19%
force= 10, 000Employed = 4, 000
(D) 7% (A) 66 %
498. Your company has been bought out by (B) 40 %
a large corporation and they lay you off. (C) 60%
This is an example of (D) 33%
(A) cyclical unemployment
505. If the Federal Reserve is using a contrac-
tionary monetary policy or where it is try-
(C) structural unemployment ing to decrease the money supply, it would
(D) seasonal unemployment do all of the following but
494. C 495. D 496. A 497. B 498. C 499. D 500. B 501. D 502. D 503. B 504. C
505. A
(A) decrease interest payments on re- (C) The company couldn’t afford to pay
serves the employees
(B) increase discount rate (D) The employees were overqualified for
(C) sell bonds in the open market their jobs
(D) increase reserve requirement 510. The Federal Reserve
506. What does the fundamental problem of (A) is made up of 12 district banks and 25
economics imply? branch banks.
(A) Governments must be relied upon to (B) is managed by a 12-member board of
supply essential goods and services. directors.
(B) Inflation and unemployment are un- (C) is made up of district banks that oper-
avoidable. ate independently from one another.
(D) none of above
(C) Growing populations will deplete nat-
ural resources. 511. What is an exchange rate?
(D) Individuals and communities must (A) The rate at which goods are ex-
make choices among competing alterna- changed between two countries
tives. (B) The price of one nation’s currency in
507. It is the ability of the peso to purchase terms of another’s
goods and services. (C) How many US dollars you can ex-
(A) CPI change for RMB at Travelex
(D) The price of goods in terms of a for-
(B) PPP
eign currency
(C) PPI
(D) CPP 512. When discussing the “Factors of Produc-
tion, “ economists use the term to re-
508. A leftward shift of the supply curve for fer to the time, effort and energy people
avocados ( a normal good) might be caused put into production
by: (A) Entrepreneurship
(A) an improvement in avocado picking (B) Labor
techniques (C) Physical Capital
(B) a decrease in the wages that must be (D) All of the Above
paid to avocado pickers
(C) an increase in consumer incomes 513. When the government spends more
(D) some avocado farmers leaving the money than they take in each year is called
market a ?
(E) a news report stating that avocados (A) Debt
are associated with good health (B) Deficit
(C) Surplus
509. If a company lays off half of its employ- (D) Expansionary
ees during a recession, what can you rea-
sonably conclude? 514. When money is used to determine the
(A) The employees were bad at their job worth of a product, it is being used as
(B) Another company wanted to higher (A) store of value
the employees (B) unit of value
506. D 507. B 508. D 509. C 510. A 511. B 512. B 513. B 514. B 515. A
(C) medium of exchange 521. The wealth effect states that higher
(D) consumer price index prices the purchasing power or the real
value of the nation’s households’ wealth
515. It is the total market value of all the fi- and savings.
nal goods and services in a given period of (A) increase
time by the country’s citizens.
(B) stagnate
(A) Gross National Product
(C) reduce
(B) Gross Domestic Product (D) double
NARAYAN CHANGDER
(C) Consumer Price Index
(D) Market Basket of Goods 522. Gross National Product minus Net Na-
tional Product is called
516. It is the measure of national output that (A) Net National Product
adjusts GNP to account for price changes. (B) Gross Domestic Product
(A) nominal GNP (C) Indirect Tax
(B) potential GNP (D) Depreciation
(C) real GNP
523. Which theory believes that changing Ag-
(D) actual GNP
gregate Demand only raises prices (infla-
517. Which of the following creates a short- tion) in the long run?
age of products? (A) Monetarist Theory
(A) Price ceiling (B) Keynesian Theory
(B) price floor (C) Marxist Theory
(C) equilibrium price (D) Populist Theory
(D) market price 524. An example of structural unemployment
518. Labour Productivity is best defined as is the
(A) How much over time workers put in (A) decision not to hire employees with-
out the needed skills
(B) How hard people work
(B) shutdown of a manufacturing plant
(C) The output generated per worker
due to a world recession
(D) The value of work produced (C) decision by an employee to take a hol-
519. An increase in which of the following iday before looking for a new job
would cause the aggregate demand curve (D) decision by an employee to leave Aus-
to shift to the left? tralia to seek work overseas
(A) Consumer optimism 525. Keynesian equation is
(B) Population (A) n=pk
(C) Cost of resources (B) n=pkr
(D) income taxes (C) MV=PT
(E) Net exports (D) M=PKY
520. Investment is a 526. Revenue means this:
(A) Stock concept (A) Credit
(B) Flow concept (B) Income
(C) Stable concept (C) Taxes
(D) Nominal concept (D) Bankruptcy
516. C 517. A 518. C 519. D 520. B 521. C 522. D 523. A 524. A 525. A 526. B
527. if we pay tax and consume goods, but 532. Total market value of all final goods and
still have money left, we keep the money services produced in the economy during a
in the bank as given year
(A) Private Saving (A) Unemployed
(B) Public Saving (B) Price Level
(C) National Saving (C) Nominal GDP
(D) Investment Saving (D) GDP
528. The law of explains why people 533. What will generally happen to the aggre-
and societies rarely make all-or-nothing gate demand curve when consumer confi-
choices. dence is too low?
(A) Utility (A) Curve shifts left
(B) marginal analysis (B) No change in curve
(C) Consumption (C) Curve slopes up
(D) Diminishing marginal utility (D) curve shifts right
529. After much debate in congress, the 534. When quantity supplied and demanded
House and Senate finally passed a bill call- are equal you have
ing for a 1 percent tax decrease and a cut (A) a surplus
in federal funding to artistic institutions.
The president then signs the bill. This is (B) a shortage
an example of the government’s (C) a deficit
(A) monetary policy (D) equilibrium
(B) open market operations
535. Unemployment characterized by large
(C) fiscal policy numbers of workers who have recently
(D) tight money pollicy been replaced by machines or laid-off due
to technological improvements is consid-
530. The economy hits a recession and your ered to be which kind of unemployment?
employer has fired you. This is an exam- (A) frictional
ple of
(B) structural
(A) Cyclical unemployment
(C) seasonal
(B) structural unemployment
(D) cyclical
(C) seasonal unemployment
(D) Frictional unemployment 536. Which type of economic system is MOST
likely to experience high amounts of gov-
531. Changes in technology and changes in ernment regulation and low amounts or
consumer tastes can cause private ownership? D international
(A) frictional unemployment (A) ) market
(B) structural unemployment (B) ) command
(C) cyclical unemployment (C) ) traditional
(D) seasonal unemployment (D) ) international
527. A 528. D 529. C 530. A 531. B 532. D 533. A 534. D 535. B 536. B 537. B
537. Competition and free enterprise are most 543. In aggregation, all of the following are
common in which type of economic sys- true, except one. Which is it?
tem? (A) Composition of demand and supply in
(A) A traditional selected markets
(B) B market (B) Composition of demand and supply is
(C) C communist important in microeconomics issues
(D) D planned (C) In economic fluctuations, markets
NARAYAN CHANGDER
move up or down together
538. Which of the following are considered re- (D) Composition of demand and supply in
sources? various markets
(A) humans
(B) land 544. A variety of policy measures used by the
(C) capital (money and equipment) government to affect the overall perfor-
mance of the economy.
(D) all of the above
(A) Macroeconomics Policy
539. What is the most liquid asset? (B) Microeconomics Policy
(A) Money (C) Unemployment
(B) Bond (D) Economic Growth
(C) Cheque
(D) All of the above 545. According to the wage-price spiral, if a
company gives a worker a raise in pay,
540. What is the function of the expansionary what must they also do?
phase? (A) Raise the price of their products
(A) Decreasing unemployment rate (B) go out of business
(B) increasing inflation rate (C) lower the price of their products
(C) Decreasing GDP
(D) none of above
(D) Both A and B
546. What is GDP per capita?
541. A period of macroeconomic expansion or
growth, followed by a period of contrac- (A) GDP x population
tion, or decline. (B) GDP / population
(A) Business Cycle (C) GDP + population
(B) Circular Flow (D) GDP-population
(C) Equilibrium
(D) GDP 547. A market structure with many sellers
that compete based on changing up their
542. Income per capita is products
(A) GDP / Employed Population (A) monopolistic
(B) GDP / Total Population (B) monopoly
(C) GDP / Number of Cats (C) pure or perfect competition
(D) GDP / Output (D) oligopoly
538. D 539. A 540. D 541. A 542. B 543. A 544. A 545. A 546. B 547. A 548. A
548. An increase in personal income taxes will 553. Odd one out
most likely result in which of the following (A) Net Exports
changes in real GDP and the price level in (B) Consumption
the shortrun?
(C) Resource prices
(A) Decrease Real GDP; Decrease Price
(D) Investment
Level
(B) Increase Real GDP; Decrease Price 554. Reduces aggregate demand (a decrease
Level in government purchases of goods and ser-
(C) Decrease Real GDP; Increase Price vices, an increase in taxes, a decrease in
Level government transfers)
(D) Increase Real GDP; Increase Price (A) Expansionary Fiscal Policy
Level (B) Contractionary Fiscal Policy
(C) Discretionary Fiscal Policy
549. When making a decision, the next best
alternative is called (D) Budget
(A) The production possibilities 555. What is an increase in nation’s total out-
(B) The opportunity cost put of goods and services over time, par-
(C) Scarcity ticularly from one year to the next.
(D) The absolute advantage (A) Economic expansion
(E) Efficiency (B) Economic Growth
(C) Productivity
550. Gross Domestic Product is the measure
(D) Economic dynamism
of our national income and ?
(A) growth 556. Unemployment directly related to
(B) output swings in the business cycle
(C) decision making (A) unemployment rate
(D) interest (B) frictional unemployment
551. National deficits are different than the (D) cyclical unemployment
national debt because
(A) deficits are calculated using all previ- 557. Supply-side policies are aimed mainly at
ous deficits. (A) improving the underlying trend rate of
(B) debts are consistently repaid and economic growth.
deficits can not be. (B) dealing with short-term supply-side
(C) only deficits vary from year to year. shocks to the economy
(D) deficits occur when expenditures ex- (C) combating cyclical unemployment.
ceed revenues for 1 fiscal year. (D) reducing the government’s budget
deficit.
552. Which of the following groups suffer
from high inflation 558. An example of Macroeconomics is
(A) Borrowers (A) GE’s pricing policy
(B) Lenders (B) Samsung’s employment rate
(C) Taxpayers (C) Inflation in the Philippines
(D) Property Investors (D) None of the above
549. B 550. B 551. D 552. B 553. C 554. B 555. B 556. D 557. A 558. C
559. Suppose that in an economy with lump- 564. What type of GDP is calculated with the
sum taxes and no international trade, au- current year’s prices?
tonomous investment spending increases (A) Nominal GDP
by $2 million. If the marginal propensity (B) Real GDP
to consume is 0.75, equilibrium gross do- (C) GDP per capita
mestic product will change by a maximum
(D) none of above
of
(A) $0.5 million 565. Unemployment is high and GDP is declin-
NARAYAN CHANGDER
(B) $1.5 million ing. To improve conditions, the govern-
(C) $2.0 million ment increases spending by $5B. If the
MPC is .75, by how much will GDP rise?
(D) $8.0 million
(A) $5B
(E) $15.0 million
(B) $10B
560. Which economic approach talk about the (C) $15B
invisible hand? (D) $20B
(A) Normative analysis
566. Technical inconsistency is one of the limi-
(B) The Keynesian Approach tation of
(C) The Classical Approach (A) Pigou’s equation
(D) The Unified Approach (B) Equation of exchange
561. If an economy experiences a dramatic (C) Keynes’ equation
rise in prices, which fiscal policy action (D) Modern Approach
could be taken?
567. The continuing increase of the general
(A) Selling securities on the open market price level in the market is called
(B) Raising interest rates (A) Inflation
(C) Reducing government spending (B) Deflation
(D) Raising reserve requirements (C) Stagflation
562. An example of expansionary is what? (D) Recession
(Multiple answers-must pick all to receive 568. Which of the following is primarily re-
credit) sponsible for the control of the money sup-
(A) Decrease taxes ply?
(B) Raise taxes (A) the United States Treasury
(C) Government spends more on Science (B) The Federal Reserve System
research (C) the Federal Deposit Insurance Corpo-
(D) Government cuts organizations like ration
the National Science Foundation (D) the Comptroller of the Currency
563. According to the short-run Phillips curve, 569. Most choices involve , which involves
lower inflation rates are associated with comparing the benefits and costs of choos-
(A) higher unemployment rates ing a little more or a little less of a good.
(B) higher government spending (A) Utility
(C) larger budget deficits (B) the budget constraint
(D) greater labor-force participation (C) Consumption
rates (D) marginal analysis
559. D 560. C 561. C 562. A 562. C 563. A 564. A 565. D 566. B 567. A 568. B
569. D
570. Philosophers draw a distinction between (B) so that the money can be put aside un-
positive statements, which describe the til it is needed
world as it is, and , which describe how (C) so that the government can pay bills
the world should be. as they come due
(A) Trade-Off (D) so that taxpayers can qualify for re-
(B) Opportunity Cost funds of excess tax
(C) Normative Statements 576. All of the following are sections of GDP
(D) Budget Constraints but
571. When an economy is in equilibrium at po-
(B) Investment spending
tential GDP, the actual unemployment rate
is (C) Government spending
(A) equal to the cyclical rate (D) Net Exports
(E) All are parts of GDP
(B) greater than the natural rate
(C) less than the natural rate 577. Which of the following is one of the
(D) equal to the natural rate tasks conducted by the Federal Reserve
System?
572. In which situation might the Federal Re- (A) executing fiscal policy
serve buy government securities or lower (B) printing money
its discount rate? (C) setting the federal government’s bud-
(A) in a recession get
(B) in the middle of an expansion phase (D) making loans to commercial banks
(C) when inflation is too high
578. The outer circle in the circular flow dia-
(D) when aggregate demand is too high gram is the flow of
573. A period of time when recovering from a (A) goods, services, and productive re-
recession? sources
(B) money
(A) peak
(C) aggregate supply and demand
(B) trough
(D) price and quantity
(C) expansion
(D) trend line 579. All of the following are tools of mone-
tary policy but
574. Which is the Fed MOST LIKELY to do in (A) reserve requirment
the event of a recession? (B) open market operations
(A) Sell bonds on the open market. (C) interest payments on reserves
(B) Raise the reserve requirement. (D) discount rate
(C) Buy bonds on the open market. (E) deposit destination
(D) Raise the discount rate.
580. The IS schedule reflects the equilibrium
575. Which of the following is one reason the of the market
federal government collects income taxes (A) product
as a person earns? (B) factor
(A) so that people do not realize exactly (C) money
how much they are paying (D) commodity
570. C 571. D 572. A 573. C 574. C 575. C 576. E 577. D 578. B 579. E 580. A
581. The official unemployment rate under- 586. Which is the equation for unemployment
states the unemployment level in the econ- rate
omy because the official unemployment (A) E/LF
rate (B) U/LF
(A) ignores the duration of unemploy- (C) (E+U)/LF
ment
(D) LF/U
(B) ignores underemployed and discour-
aged workers 587. When the US$ exchange rate falls it will
NARAYAN CHANGDER
(C) includes jobs created by the under- usually
ground economy (A) help to reduce a US trade deficit.
(D) excludes all unemployed teenagers (B) increase the foreign price of US ex-
ports.
(E) excludes frictionally unemployed
workers (C) reduce the price of US imports.
(D) reduce US inflation
582. Which of the following is a macroeco-
nomic objective of the government? 588. The consumer price index (CPI) is an indi-
cator of which of the following?
(A) Minimising economic growth
(A) the size of the economy
(B) High but stable budget deficit
(B) the velocity of money
(C) Stable prices
(C) the level of inflation or deflation
(D) Rising current account deficit (D) the presence of a budget deficit or
surplus
583. If one wanted to know whether there
had been inflation or not, the BEST mea- 589. Tanks and roads belong in which part of
sure to observe would be the the GDP formula? GDP = C+I+G+(X-M)
(A) GDP (A) Consumption Expenditures
(B) business cycle (B) Investment Expenditures
(C) CPI (C) Government Expenditures
(D) national debt (D) Net Imports
584. A literary editor leaves her job in New 590. Law of Marginal Utility:The more
York to look for a new job in San Francisco. you consume, the less you enjoy additional
consumption.
(A) Frictional
(A) Diminishing
(B) Cyclical
(B) Increasing
(C) Structural
(C) Inconsequential
(D) Not counted
(D) Coincidental
585. Refer to Figure 2-1. The most inefficient 591. A two-sector economy in the circular
point depicted is: flow diagram is represented by
(A) Point A (A) households and the government
(B) Point C (B) firms and the government
(C) Point D (C) households and firms
(D) Point G (D) banks and firms
581. B 582. C 583. C 584. A 585. D 586. B 587. A 588. C 589. C 590. A 591. C
592. D
592. The relative magnitude of prices at one 598. Which of the following statements BEST
point in time differentiates between the terms debt and
(A) Deflation deficit?
(B) Inflation (A) Debt and deficit are synonymous
(B) Debt means more money is flowing
(C) Hyperinflation
out than coming in, and deficit is the total
(D) Price level amount owed
(C) Deficit means more money is flowing
593. In which year the hyper inflation hap-
out than coming in, and debt is the total
pened in Germany?
amount owed
(A) 1913
(D) Debt and deficit are completely unre-
(B) 1933 lated terms
(C) 1929
599. Which one of the following is an example
(D) 1923 of a contractionary fiscal policy designed
to reduce inflationary pressures?
594. The largest sector of the macroeconomy
is the (A) An increase in the government budget
surplus
(A) investment sector
(B) A reduction in the supply of money
(B) government sector available to banks for lending purposes
(C) foreign sector (C) Higher interest rates
(D) consumer sector (D) A reduction in the exchange rate
595. Percent increase in the overall level of 600. A high marginal propensity to consume
prices per year implies which of the following?
(A) Inflation Rate (A) A small change in consumption when
income changes
(B) Aggregate Demand
(B) A high savings rate
(C) Budget
(C) A high marginal tax rate
(D) Budget Surplus
(D) An equilibrium level of income near
596. The measures the cost of the market full employment
basket of a typical urban American family. (E) A low marginal propensity to save
(A) Consumer Price Index (CPI) 601. Induced investment curve is
(B) Producer Price Index (PPI) (A) Vertical straight line
(C) Aggregate Price Level (B) Horizontal straight line
(D) Inflation Rate (C) Downward sloping curve
(D) Upward sloping curve
597. What is not involved in the construction
of a retail price index? 602. The government begins funding train-
(A) a base year ing programs to teach computer repair
and website design to unemployed adults.
(B) a basket of goods Which kind of unemployment would such
(C) the income tax rate training help MOST?
(D) the weighting of products (A) frictional
593. D 594. D 595. A 596. A 597. C 598. C 599. A 600. E 601. C 602. C
(B) seasonal 607. The Federal Reserve has how many dis-
(C) structural tricts
(D) cyclical (A) 6
(B) 25
603. Economists refer to this pattern, the , (C) 12
which means that as a person receives (D) 10
more of a good, the additional or marginal
utility from each additional unit of the 608. What is likely to fall when the rate of
NARAYAN CHANGDER
good declines. unemployment in a country falls?
(A) law of diminishing marginal utility (A) business confidence
(B) law of trade-offs (B) consumer spending
(C) law of increasing marginal utility (C) government budget deficit
(D) production possibilities frontier (D) government revenue from taxes
609. The study of the nation’s economy as a

604. Assume that the nominal interest rate is
whole is called..
10 percent. If the expected inflation rate
is 3 percent, the real interest rate is (A) Microeconomics
(A) 0.5% (B) National economy
(C) National output
(B) 3%
(D) Macroeconomics
(C) 7%
(D) 10% 610. GDP per capita measured by PPP is:
(A) (U.S. dollar / country A’s currency
605. When a bank makes a loan of $1, 000, PPP adjustment) / (GDP in country A’s cur-
then rency)
(A) the money supply increases by $1, (B) (GDP per capita in country A’s cur-
000 rency) x(U.S. dollar / country A’s currency
(B) the money supply decreases by $1, PPP adjustment)
000 (C) (GDP in A’s currency) x(U.S. dollar /
(C) nothing country A’s currency PPP adjustment)
(D) the bank owes the FED $1, 000 (D) google it.
611. United States of Fredo’s Consumption

606. To make Gross Domestic Product a better
Spending is 5000, Investemnt Spending is
measure of comparative living standards it
1000, Government Spending is 2000, and
needs to be adjusted by
Net Exports is 500. What is its GDP?
(A) deducting the effects of exports and (A) 7500
inflation
(B) 8000
(B) deducting the effects of imports and
(C) 8500
exports.
(D) Not enough Information
(C) deducting the effects of population
change and exports. 612. The long run aggregate supply curve is
(D) deducting the effects of population vertical because
change and inflation. (A) Price level increases but GDP doesn’t
603. A 604. C 605. A 606. D 607. C 608. C 609. D 610. B 611. C 612. A 613. A
(B) GDP increases but price level doesn’t 618. If the federal government is attempting
(C) GDP decreases but price level doesn’t to encourage spending by consumers and
businesses, a fiscal policy BEST serving
(D) Price level decreases but GDP
this purpose would be
doesn’t
(A) decreasing taxes.
613. Which of the following typically rises (B) decreasing government spending.
during a recession? (C) reducing the investment tax credit.
(A) Unemployment (D) balancing the budget.
(B) Average income 619. All of the following are types of unem-
(C) Production ployment but
(D) Stock prices (A) cyclical
(B) full
614. Which of the following might be a sign (C) structural
of an economic trough?
(D) frictional
(A) low unemployment
(E) seasonal
(B) recession
620. Higher taxes tend to
(C) high GDP
(A) increase consumption
(D) stable CPI
(B) increase unemployment
615. Economic growth would most likely be (C) cause inflation
stimulated by (D) lesson government spending
(A) higher unemployment rates
621. The three major normative macroeco-
(B) faster rates of technological progress nomic goals do not include
(C) increases in membership of labour (A) Full employment.
unions (B) Price level stability.
(D) consumption of more consumer (C) Sustained economic growth.
goods (D) High levels of environmental quality.
616. Which of the following would be MOST 622. An increase of prices lead to
LIKELY to increase aggregate demand? (A) a change along the AD curve to the
(A) increasing the discount rate right
(B) decreasing government spending (B) an outward shift of the AD curve
(C) increasing consumer confidence (C) an inward shift of the AD curve
(D) declining consumer confidence (D) a change along the AD curve to the
left
617. Identify the consequences of in equality
623. A representative selection of goods and
in income
services
(A) Social unrest (A) Price index
(B) More opportunity (B) Real GDP
(C) Increase in living standards (C) Consumer price index
(D) Poverty (D) Market basket
614. B 615. B 616. C 617. A 617. D 618. A 619. B 620. B 621. D 622. D 623. D
624. A
624. The IRS lays off thousands of employees 630. The law of Demand states
every year after April 15th. This is an ex- (A) that the higher the price, the more
ample of producers will make
(A) seasonal unemployment (B) the lower the price, the less produc-
(B) cyclical unemployment ers will make
(C) frictional unemployment (C) the higher the price, the more con-
(D) structural unemployment sumers will buy
NARAYAN CHANGDER
625. The UK economy is most likely to be (D) the lower the price, the more con-
in the boom phase of the economic cycle sumers will buy
when there is a rise in
(A) the demand for imports. discretionary fiscal policy?
(B) the saving ratio.
(A) Income tax payments grow
(C) spare capacity
(B) Congress spends an extra $2 billion to
(D) business pessimism. provide jobs
626. A positive impact on net exports could be (C) Fewer workers receive unemploy-
due to (select several options) ment compensation
(A) trade war (D) More people apply for and receive
(B) appreciation of domestic currency welfare benefits
(C) higher income abroad
632. Which of the following creates a surplus
(D) depreciation of domestic currency of goods?
627. Measures the cost of the market basket (A) Price ceiling
of a typical urban American family (B) Price floor
(A) Aggregate Supply (C) equilibrium price
(B) GDP (D) market price
(C) CPI
(D) Budget 633. Real GDP is
(A) GDP at the current prices
628. The real interest rate is 10 % and the
inflation rate is 3%. What is the nominal (B) GDP that has been adjusted for infla-
interest rate? tion
(A) 13% (C) A measure of the total production of
goods in other countries
(B) 7%
(C) -7% (D) The same thing as nominal GDP
(D) 10% 634. To be certain that a country is producing
629. Which of the following issues would a more from year to year, economists look
macroeconomist concentrate on? to see that has
(A) the price of pizza (A) GDP; decreased
(B) the profits of Air Asia (B) GDP; increased
(C) The market for Proton Saga cars (C) Real GDP; decreased
(D) The unemployment rate in Malaysia (D) Real GDP; increased
625. A 626. C 626. D 627. C 628. A 629. D 630. D 631. B 632. B 633. B 634. D
635. D
635. Daffa buys stock $1, 000. He has to 640. Who “owns” most of the U.S. debt?
pay $50 for broker fee. How much can (A) American citizens
be counted in GDP? (B) India
(A) $1000 (only the stock) (C) England
(B) $1050 (stock + broker fee) (D) The International Monetary Fund
(C) $0 (neither stock nor broker fee)
(D) $50 (only the broker fee) 641. What measure shows what percentage
of the eligible workers do not have jobs?
636. Which of the following would cause a (A) Gross Domestic Product
rightward shift in the aggregate demand (B) Unemployment Rate
(AD) curve?
(C) Inflation Rate
(A) A rise in imports
(D) none of above
(B) A rise in income tax
(C) A fall in indirect tax 642. The marginal benefit of a slice of pizza is
the:
(D) A fall in saving
(A) price of the slice of pizza.
637. Unemployment occurs when (B) difference between the value of the
(A) Someone wants a job but can’t find slice to the consumer and the price of the
work slice.
(B) Someone is able and willing to work (C) total amount that a consumer is will-
but can’t find a job ing to pay for a whole pizza, divided by the
(C) Someone is able to work but does not number of slices.
have employment (D) maximum amount that a consumer is
willing to pay for the slice.
(D) Work provided is not sufficient to
meet the needs of workers 643. Which of the following deals with
Macroeconomics?
638. Which of the following is most appropri-
ate about GDP as a measure of welfare? (A) Individual income
(A) GDP is the single best measure of wel- (B) Individual output
fare (C) Individual savings
(B) GDP is not used to measure welfare (D) General price level
(C) GDP have some limitations as a mea- 644. A government decided to increase its
sure of welfare spending on building schools and hospitals.
(D) GDP is not at all a measure of welfare Which aim of government policy is most
likely to be achieved by this increase?
639. take the number of unemployed people in
(A) a balance of payments surplus
the country divided by the number of peo-
ple in the labor force and multiplying the (B) a stronger exchange rate
quotient by 100. (C) economic growth
(A) unemployment rate (D) price stability
(B) unemployment growth
645. The Federal Reserve would do which of
(C) employment rate the following in order to expand the econ-
(D) none of above omy?
636. D 637. B 638. C 639. A 640. A 641. B 642. D 643. D 644. C 645. C
(A) sell bonds 650. A country is said to be experiencing in-

(B) raise the discount rate flation when
(A) Prices of most goods and services are
(C) buy bonds
rising over time
(D) raise the reserve requirement (B) Total output is falling over time
(C) Total output is rising over time
646. Refer to Figure 2-1. An economy is
(D) Prices of most goods and services are
operating at full employment, and then
falling over time
workers in the bread industry are laid off.
NARAYAN CHANGDER
This change is portrayed in the movement 651. Assume that the required reserve ratio
from: is 10 percent, banks keep no excess re-
(A) G to F serves, and borrowers deposit all loans
made by banks. Suppose you have saved
(B) B to E
$100 in cash at home and decide to de-
(C) A to B posit it in your checking account. As a re-
(D) C to F sult of your deposit, the money supply can
increase by a maximum of
647. Unemployment describes the condition (A) $800
where: (B) $900
(A) a person does not have a job, regard- (C) $1, 000
less of whether or not he or she wants one (D) $1, 100
(B) a person cannot get a job but is willing (E) $1, 200
to work and is actively seeking work
652. In which situation would contractionary
(C) equipment and machinery are going fiscal policy be the most appropriate pol-
unused icy?
(D) any resource sits idle. (A) Increased budget surplus
(B) Negative output gap growing
648. Unemployment that is directly related to (C) Rising current account surplus
swings in the business cycle is (D) Inflationary pressure emerging
(A) frictional unemployment
653. If the economy is in an inflationary pe-
(B) structural unemployment riod, what action would fiscal policy most
(C) cyclical unemployment likely take?
(D) seasonal unemployment (A) Decrease Taxes
(B) increase government spending
649. When the Fed is conducting open market (C) Increase taxes
operations, they are (D) Decrease the discount rate
(A) Buying or selling government bonds.
654. is the branch of economies that stud-
(B) Buying or selling factors in the factor ies the individual decision making such as
market. households, firms and government.
(C) Buying or selling stocks on the New (A) Macroeconomics
York Stock Exchange. (B) Microeconomics
(D) Buying or selling goods in the product (C) Masterconomics
market. (D) Microplan economics
646. D 647. B 648. C 649. A 650. A 651. B 652. D 653. C 654. B 655. A
655. If the MPC is .7 and gross investment 661. If Jet’s disposable income increases from
spending increase by $3 billion, GDP will $500 to $550 and his level of personal
(A) increase by $10 billion consumption expenditures increases from
(B) increase by 2.1 billion $380 to $420, you may conclude that his
marginal propensity to
(C) decrease by $4.29 billion
(A) consume is .8
(D) increase by $4.29 billion
(B) consume is .4
656. The use of taxes and government spend- (C) consume is .25
ing to affect the economy (D) save is .8
(A) Monetary Policy (E) save is .25
(B) Fiscal Policy
662. Which of the following studies the prob-
(C) Contractionary Policy
lems of economics at individual levels?
(D) Expansionary Policy (A) Microeconomics
657. The business cycle since World War II has (B) Macroeconomics
been characterized by (C) Both Micro and Macro economics
(A) extended expansions alternating with (D) none of above
brief recessions
663. Which feature would be most helpful in
(B) brief expansions alternating with
identifying a typical developing country?
lengthy recessions
(A) the level of Gross Domestic Product
(C) uninterrupted expansion
(B) the rate of rural to urban migration
(D) uninterrupted recession
(C) the size of geographical area
658. What is the formula to find the total (D) the size of the population
money supply?
664. The wage rate shall be the value of
(A) M
product.
(B) MV
(A) Equal
(C) PKR
(B) Less
(D) MV/T
(C) More
659. Which of the following is an injection into (D) Equal or less
the circular flow model?
665. Which of the following is not a Macroe-
(A) Government taxes conomic goal?
(B) Savings (A) To increase Real GDP per Capita
(C) Imports (B) Create more jobs
(D) Exports (C) Provide more unemployment benefits
660. A positive impact on investments could (D) Maintain stable prices
be due to
666. Contractionary Fiscal Policy involves
(A) higher business confidence
(A) increase the money supply and in-
(B) higher interest rates crease interest rates
(C) higher taxes (B) increasing govt. spending and de-
(D) none of above crease taxes
656. B 657. A 658. B 659. D 660. A 661. A 662. A 663. B 664. D 665. C 666. D
(C) decrease interest rates decrease 672. When calculating GDP, the purchase of a
money supply new factory is counted as
(D) decrease govt. spending and in- (A) consumption
crease taxes (B) government
667. How many Federal Reserve Districts are (C) investment
there? (D) net export
(A) 6
NARAYAN CHANGDER
(B) 9 673. Which of the following are indirect
taxes?
(C) 12
(A) VAT
(D) 20
(B) Corporation tax
668. The term when govt budget deficit rais- (C) Excise Duty
ing real interest rate and decrease invest-
ment is called (D) Income tax
(A) Ricardo-barro effect 674. The aggregate demand curve will shift to
(B) Crowding-in effect the right as the result of
(C) Multiplier effect (A) an increase in corporate business
(D) Crowding-out effect taxes
(B) a decrease in the real interest rate
669. If the government brings in more tax rev-
enue than it spends, this will create a (C) recessions in foreign nations that
trade with the United States, causing a
(A) budget surplus
lower demand for U.S. products
(B) budget deficit
(D) an increase in the nominal interest
(C) trade surplus rate
(D) trade deficit
675. Period during which real GDP declines for
670. Economic growth would most likely be two quarters in a row, or six consecutive
stimulated by months
(A) Higher unemployment rates. (A) business cycles
(B) Faster rates of technological
(B) recession
progress.
(C) peak
(C) Increases in membership of labour
unions. (D) trough
(D) Consumption of more consumer
676. Contractionary fiscal policy would most
goods.
likely be used during
671. The Board of Governors is appointed by (A) recessions
the (B) times where economy is operating at
(A) vice president full employment
(B) president (C) periods of sustained, demand pull in-
(C) Fed flation
(D) state governors (D) Anytime we have a negative GDP gap
667. C 668. D 669. A 670. B 671. B 672. C 673. A 673. C 674. B 675. B 676. C
677. D
677. Macroeconomics studies the economy 683. All of the following are crucial social and
from viewpoint of economic goals for Macroeconomics but
(A) The firms
(B) The households (A) Full Employment
(C) The government (B) Price instability
(D) The entire economy (C) Economic Growth
(D) Price Stability
678. A government aiming to increase aggre-
gate demand through the use of monetary 684. In which part of the GDP calculation does
policy might increase the this fit? The local taxi service purchases
(A) rate of interest. new vehicles for the company.
(B) exchange rate (A) Consumer spending
(C) amount of money in circulation (B) Government spending
(D) level of government expenditure. (C) Investment spending
679. In which part of the GDP calculation does (D) Net exports
this fit? You purchase the new iPhone
(made abroad). 685. The long run aggregate supply curve is
also known as
(A) structural unemployment
(B) Government spending
(B) Full-employment
(C) Investment spending
(C) The natural rate of employment
(D) Net exports
(D) Cyclical unemployment
680. The dynamic multiplier relates to
(A) Investment 686. A market basket represents a long list
of goods and services that the average
(B) Time lag
household buys in a given time period. By
(C) MPC dividing a market basket of goods and ser-
(D) Employment vices from one time period by a market
basket from another time period a person
681. Someone without a job a job who has
can calculate the
quit looking
(A) Intermediate Goods
(B) Discouraged Worker (B) aggregate supply
(C) Structural Unemployment (C) gross domestic product
(D) Seasonal Unemployment (D) consumer price index
682. Monetary Policy is the Federal Reserve 687. These are IOUs from the U.S. govern-
Systems attempt to ment to people that finance a little piece
(A) control the amount of money in circu- of the government’s debt in exchange for
lation a very small amount of interest
(B) control the Federal Government’s (A) Government Bonds, or Securities
debt (B) Government Credit
(C) control state governments’ spending (C) Government Cash
(D) none of these answers are correct. (D) Government Holdings
678. C 679. A 679. D 680. B 681. B 682. A 683. B 684. C 685. B 686. D 687. A
688. D
688. Which of the following is not method of (B) the evolution of technology over time.
measuring National Income? (C) short-run fluctuations in output and
(A) Output employment.
(B) Income (D) fluctuations in the general price level.
(C) Expenditure
694. The economy is in general equilibrium
(D) None of the givern when the and the sectors are in equi-
689. If the economy is in a recession, the Fed librium
NARAYAN CHANGDER
should do what with the reserve require- (A) financial sector
ment? (B) service sector
(A) raise (C) production sector
(B) lower (D) real sector
(C) all of the above ;) 695. Which of the following is not an measure
(D) none of above of living standards?
690. What is a factor that can cause change in (A) Average Income
Investment (demand for businesses spend- (B) Average life expectancy
ing). (C) Average years of schooling
(A) Changes in taxes (D) Average number of holiday days
(B) Technological Change
696. The traditional Phillips Curve shows the:
(C) Resource costs
(A) Inverse correlation between the rate
(D) Other products of inflation and the rate of unemployment
691. Inflation in excess of 500 percent per (B) Direct correlation between the short-
year is called run and long-run aggregate supply
(A) demand-pull inflation (C) Direct correlation between the rate of
(B) cost-push inflation inflation and the unemployment rate
(C) stagflation (D) Inverse correlation between the
short-run and long-run aggregate supply
(D) hyperinflation
697. A period of falling real gross domestic
692. The growth of an economy is below its
product is an indicator of a(n):
trend rate and it is simultaneously experi-
encing inflation and a deficit on its balance (A) peak
of trade. All other things being equal, a (B) trough
reduction in the rate of income tax is most (C) expansion
likely to lead to a decrease in the (D) recession
(A) inflation rate. (E) recovery
(B) level of unemployment.
698. The circular flow of income for the two-
(C) rate of economic growth. sector model shows the flow of income be-
(D) balance of trade deficit. tween and
693. The business cycle depicts: (A) household, government
(A) the phases a business goes through (B) firm, government
from when it first opens to when it finally (C) government, whole world
closes. (D) household, firm
689. B 690. B 691. D 692. B 693. C 694. D 695. D 696. A 697. D 698. D 699. B
699. An increase in which of the following will 704. What is NOT a consequence of expan-
increase aggregate demand? sionary fiscal policy?
(A) Taxes (A) AD shifts Right
(B) Government spending (B) Increased Price levels
(C) The federal funds rate (C) increased output
(D) Reserve requirements (D) increased unemployment
700. Approximately how often does a finan- 705. Federal budget deficits occur when
cial institution send a bank statement
(A) more money is being spent on entitle-
through the mail?
ment programs than has been allocated
(A) yearly
(B) the federal government spends more
(B) weekly than it collects in taxes in a given year
(C) quarterly (C) high levels of unemployment use up
(D) monthly tax collections
(D) interest payments on the national
701. Which of the following goods would be
debt increase from one year to the next
considered scarce? I. Education II. Gold III.
Time 706. If Congress increases government spend-
(A) I only ing by the same amount it increases taxes
(B) II only aggregate demand will
(C) III only (A) remain the same
(D) I and II only (B) decrease, these are both contrac-
(E) I, II and III tionary
(C) increase
702. Which of the following characteristics
(D) shift down
best describes a progressive income tax
system? 707. A commercial bank’s ability to create
(A) high income earners pay more in tax money depends on which of the follow-
than low income earners ing?
(B) as income rises, the marginal rate of (A) The existence of a central bank
tax increases
(B) A fractional reserve banking system
(C) as income falls, the marginal rate of
(C) Gold or silver reserves backing up the
tax increases
currency
(D) highincome earners pay a lower aver-
(D) A large national debt
age tax rate
(E) The existence of both checking ac-
703. If the US dollar appreciates relative to counts and savings accounts
the Canadian dollar, what is a likely out-
come? 708. Accelerator shows effect of
(A) trade surplus in US (A) Growth rate of national income
(B) trade deficit in Canada (B) investment on aggregate income
(C) trade deficit in both (C) investment on consumption
(D) trade surplus in Canada (D) consumption on investment
700. D 701. E 702. B 703. D 704. D 705. B 706. C 707. B 708. D 709. C
709. Which of the following is NOT a valid ex- (C) 3

change medium for factors of production? (D) 4
(A) Profit
715. The choice on a production possibilities
(B) Wages
set that is socially preferred, or the choice
(C) Imports on an individual’s budget constraint that is
(D) Rent personally preferred, will display
(A) Scarcity
710. Which of the following is a subject mat-
NARAYAN CHANGDER
ter of Macroeconomics? (B) allocative efficiency
(A) Studies Employment & Unemploy- (C) the production possibilities frontier
ment (D) trade-offs
(B) Determination of National Income 716. Which of the following is NOT a conse-
(C) Promotes Economic Growth & Devel- quence of economic growth
opment (A) Less employment
(D) All of the above options (B) Pollution
711. All other things being equal, an increase (C) Increased incomes
in aggregate demand would result from an (D) Improved living standards
increase in the
717. GDP is misleading because
(A) deficit in the current account of the
(A) The quantity produced is not reflected
balance of payments
in the total amount of money made
(B) household saving ratio.
(B) The goal is to make the most money
(C) government’s budget surplus and sometimes that does not happen
(D) ratio of household consumption to na- (C) GDP is not misleading because it only
tional income counts certain goods and services
712. Which of the following are sources of (D) none of above
wealth?
718. When the Government spends more than
(A) Salary it saves
(B) Dividend (A) Budget
(C) Pension Fund (B) Budget Surplus
(D) Savings (C) Budget Deficit
713. Which of the following will increase eco- (D) GDP
nomic growth 719. An increase in labor productivity would
(A) An increase in unemployment most likely cause real gross domestic prod-
(B) An increase in incomes uct and the price level to change in which
(C) An ageing population of the following ways
(D) Investment in technology (A) Increase Real GDP; Increase Price
Level
714. How many factors affecting the demand (B) Increase Real GDP; Decrease Price
for money? Level
(A) 1 (C) Decrease Real GDP; Increase Price
(B) 2 Level
710. D 711. D 712. C 712. D 713. B 713. D 714. C 715. B 716. A 717. A 718. C
719. B
(D) Decrease Real GDP; Decrease Price 725. When economists estimate Gross Do-
Level mestic Product using the income approach,
which types of income are included?
720. Which of these economists believes that
in the long run, an economy can get (A) Profit, depreciation, and interest.
“stuck” at a level below full employment (B) Wages, interest, and taxes.
until the government takes action to raise (C) Profit, wages, interest, and land.
aggregate demand.
(A) John Maynard Keynes (D) Rent, wages, interest, and profit.
(B) F.H. Hyakk
726. Whose opinions have revolutionised the
(C) Milton Friedman scope of Macroeconomics?
(D) Karl Marx
(A) Adam Smith
721. A business where shareholders have lim- (B) Keynes
ited liability and majority shareholders run
the business as chief officers (C) Theory of National Income
(A) Partnership (D) none of above
(B) sole proprietorship
727. When it comes to saving money, what is
(C) Corporation
a good rule of thumb?
(D) Pure or Perfect Market competition
(A) Keep most of your savings in your
722. Countries will export goods and services checking account
that they can produce at lower costs. This
(B) Put aside money for savings each
is called-
month
(A) oligarchy
(C) Choose the savings account with the
(B) monopoly
lowest interest rate
(C) comparative advantage
(D) capitalism (D) Put anything you can’t afford on your
credit card
723. If the government’s fiscal policy is de-
signed to expand the economy, which ac- 728. It is observed that in an economy during
tion would Congress be MOST likely to the recession phase of the economic cycle
take? there is more likely to be a rise in
(A) buy government bonds (A) investment
(B) increase income (B) consumption
(C) raise the discount rate
(C) unemployment
(D) increase government spending
(D) inflation
724. What is the difference between real and
nominal GDP? 729. In the circular flow of income model,
(A) Real GDP = adjusted for inflation; which one of the following is an injection?
Nominal GDP = not adjusted for inflation (A) Consumer spending
(B) Nominal GDP = adjusted for inflation;
Real GDP = not adjusted for inflation (B) Government spending
(C) They are the same thing (C) Imports
(D) none of above (D) Wages
720. A 721. C 722. C 723. D 724. A 725. D 726. B 727. B 728. C 729. B 730. C
730. Which of the following is not a store of 735. The consumer price index is used primar-
value? ily to measure the
(A) money (A) production possibilities curve.
(B) gold (B) inflation rate.
(C) food (C) unemployment rate.
(D) gems (D) economic growth of a country.
736. High levels of GDP per capita indicate
NARAYAN CHANGDER
731. If government borrow fund from bank
and spend for public welfare then supply
of money will be (A) Higher levels of happiness
(B) Higher standard of living
(A) Decrease
(C) Equal levels of wealth
(B) Increase
(D) Self-sufficient communities
(C) Constant
(D) All of the above 737. How do we measure GDP using the fac-
tors of production?
732. Why do changing exchange rates help (A) Expenditure Approach
one country and hurt the other? (B) Nominal GDP/ Price Level Index
(A) One side loses purchasing power and (C) Income Approach
the other gains it
(D) Real GDP/ Population
(B) Takes money away from one side and
gives it to the other 738. What does Green GDP represent?
(C) Causes war between the two coun- (A) An attempt to subtract the cost of en-
tries vironmental externalities from GDP
(D) One country’s government introduces (B) GDP for Frogs and Frog-related prod-
tariffs to protect local industries ucts.
(C) GDP for Forested nations.
733. Select all features of a recession (D) GDP for environmentalists
(A) Increased unemployment
739. Which of the following is excluded from
(B) Higher tax rates taxable income?
(C) Lower interest rates (A) Rent
(D) Falling GDP (B) Interests
(C) Wages
734. If the CPI for the last three months has
been 100, 101, 104, then what DEFINITE (D) 13th Month pay
conclusion can you make about the econ- 740. An increase in which of the following
omy? would cause the AD curve to shift to the
(A) unemployment has decreased left?
(B) GDP is improving (A) Consumer optimism
(C) prices have increased (B) Population
(D) the production possibilities curve has (C) Cost of resources
shifted (D) Income taxes
731. B 732. A 733. A 733. D 734. C 735. B 736. B 737. C 738. A 739. D 740. D
741. D
741. An increase in which of the following 746. The total value of all final goods and ser-
would cause an outward shift of the PPC vices produced in the economy during a
for consumer goods and capital goods? given year, calculated using the prices of
(A) An increase in the demand for con- a selected base year
sumer goods (A) Real GDP
(B) An increase in taxes on consumers (B) Nominal GDP
(C) A decrease in unemployment (C) Real GDP per Capita
(D) An increase in the resources to pro- (D) GDP
duce capital goods
747. An economy in which production, invest-
(E) The efficient production of consumer
ment, prices, and incomes are determined
goods
centrally by a government.
742. If the Federal Reserve decides to sell (A) Market Economy
bonds, what effect will it have? (B) Mixed Economy
(A) It will cause the money supply to de- (C) Traditional Economy
crease and inflation to fall (D) Command Economy
(B) It will cause the money supply to in-
crease and employment to rise 748. Which of these is NOT a monetary policy
(C) It will guarantee higher taxes tool?
(D) It will extend stagflation (A) Discount rate
(B) Balance Accounts
743. What is the main function of Fiscal pol- (C) Open Market Operation
icy?
(D) Reserved Requirements
(A) Government spending and taxation to
stabilize the economy 749. Which of the following is a need?
(B) Buy houses (A) clothes
(C) Take over the economy (B) car
(D) Buy government bonds (C) job
(D) smart phone
744. How many components of supply of
money? 750. If the demand for Wendy’s increases
(A) 1 when the price of Starbucks decreases,
(B) 2 then what type of goods are Wendy’s and
(C) 3 Starbucks?
(D) 4 (A) normal
(B) inferior
745. If the actual unemployment rate is 7% (C) substitutes
and the cyclical unemployment rate is 2%,
(D) complements
then the natural rate of unemployment is
(A) 3.5% 751. A rise in the overall price level
(B) 9% (A) GDP
(C) 5% (B) Market Basket
(D) 2% (C) Aggregate Supply
(E) 7% (D) Inflation
742. A 743. A 744. B 745. C 746. A 747. D 748. B 749. A 750. D 751. D 752. B
752. How does a government-funded con- 757. GDP stands for

struction project stimulate spending? (A) gross domestic product
(A) By requiring construction workers to (B) gross domestic problems
buy equipment (C) great domestic problems
(B) By providing construction workers (D) great domino product
with regular income
758. Which is the example of near money?
(C) By selling leftover materials to con- (A) Cash
struction workers
NARAYAN CHANGDER
(B) Demand deposit
(D) By creating homes for construction (C) Bond
workers to rent
753. Select the three macroeconomic policy 759. If the economy is operating at full em-
goals from the following list. ployment and there is a substantial in-
(A) Keep the economy growing over time crease in the money supply, the quantity
(B) Limit unemployment theory of money predicts an increase in
(C) Keep prices stable (A) real output
(B) the price level
(D) Raise unemployment
(C) interest rates
(E) Keep the economy shrinking over time
(D) unemployment
754. The expansion or contraction of the 760. Refer to Figure 2-1. Along the produc-
money supply in order to influence the cost tion possibilities frontier, the most effi-
and the availability of credit is cient point of production depicted is:
(A) Monetary Policy (A) Point B
(B) Contractionary Policy (B) Point C
(C) Fiscal Policy (C) Point D
(D) Expansionary Policy (D) All points on the production possibili-
ties frontier are equally efficient.
755. An expansionary monetary policy will 761. The LRPC is vertical because
lower interest rates and
(A) In the long run there is no tradeoff be-
(A) raise inflation. tween inflation and unemployment
(B) lower inflation. (B) In the long run there is no tradeoff be-
(C) decrease liquidity. tween price level and GDP
(D) cause mortgage defaults. (C) In the long run there is no tradeoff be-
tween price and quantity demanded
756. People use money to buy things and pay (D) In the long run there is no tradeoff be-
debts because they have agreed upon the tween two production options
money’s worth. This function of money is
762. The factories, machines, and technology
called what?
that people use to make products to sell.
(A) Medium of exchange (A) capital goods
(B) unit of account (B) human capital
(C) store of value (C) entrepreneurship
(D) standard of value (D) none of above
753. A 753. B 753. C 754. A 755. A 756. D 757. A 758. C 759. B 760. D 761. A
762. A 763. B
763. Which of the following situation de- 768. Which of the following would cause a
scribes unemployment? leftward shift of the production possibili-
(A) Robert is a full-time student. ties curve?
(B) Sharon just graduated from college. (A) An increase in unemployment
(C) George earns 70 pesos an hour. (B) An increase in inflation
(D) Gene works after school as a bagger (C) An increase in capital equipment
at a local grocery store. (D) A decrease in consumer demand
(E) A decrease in the population
764. This happens when there is an increase
in the production of goods and services. 769. It is the measure of a country’s total pro-
(A) Economic Development duction of final goods and services in a
given period of time.
(B) Economic Progress
(A) Gross National Product
(C) Economic Growth
(D) Economic efficiency
(C) Exports
765. System of statistics and accounts that (D) Imports
track overall economic performance
(A) Gross Domestic Product 770. In a typical business cycle, what stage
immediately follows a peak?
(B) Gross National Product
(A) contraction
(C) Net National Product
(B) expansion
(D) National Income Accounting
(C) trough
766. Macroeconomics theory studies the fol- (D) growth
lowing except how
771. Macroeconomics is a study of
(A) To determine international trade ac-
tivities. (A) individual price levels
(B) To determine the equilibrium income (B) government units
in an economy. (C) the entire economy
(C) To determine the unemployment and (D) the behavioral of individuals firms
inflation rate.
772. If real output exceeds expenditure
(D) To determine type and quantity of
goods to produced. (A) inventories will fall
(B) inventories will rise
767. One explanation for the downward slope (C) inventories will remain unchanged
of the aggregate demand curve is that
(D) aggregate expenditure will rise
when the price level increases, which of
the following will decrease? 773. occurs in the economy when unem-
(A) Real value of assets ployment and inflation are both high.
(B) Prices of foreign goods (A) Hyperinflation
(C) Prices of substitute goods (B) Disinflation
(D) Expectations of future prices (C) Deflation
(E) Government deficit (D) Stagflation
764. C 765. D 766. D 767. A 768. E 769. B 770. A 771. C 772. B 773. D 774. C
775. B
774. Money (B) business fluctuations

(A) represents near-money (C) peak
(B) is backed by gold (D) trough
(C) is widely accepted for the payment of 780. Economists consider inflation to be a neg-
debt ative event because
(D) consists of bill only, not coins (A) inflation encourages consumers to
buy goods made in the UK rather than im-
775. The US dollar is an example of
ports
NARAYAN CHANGDER
(A) Commodity Money (B) It increases the rate of savings
(B) Fiat Money (C) It means a recession is around the
(C) Representative Money corner
(D) the Gold Standard (D) It leads to uncertainty and makes in-
vestment more risky
776. On a micro graph, which of the following
might cause supply to decrease? 781. Output-Expenditure ModelGDP = Con-
(A) Productive resource costs greatly de- sumer C + Investment I +? + Exports &
crease Imports (X-M)
(B) Taxes on businesses are greatly in- (A) Demand-D
creased (B) Taxes-T
(C) Businesses have greater amounts of (C) Product-P
productive resources (D) Government-G
(D) Minimum Wage has been reduced 782. Inflation is defined as
777. What do you call an economic policy that (A) the growth phase of the business cy-
is designed to influence the aggregate de- cle.
mand in order to control the economy? (B) the rate of growth in nominal GDP.
(A) Spending policy (C) an increase in the overall level of
prices
(B) National policy
(D) a situation where all prices in the
(C) Fiscal policy
economy rise simultaneously.
(D) Monetary policy
783. What is the relationship between price
778. What is the only way to increase the and value of money?
“full employment” capacity of a nation in (A) Positive
both Monetarist and Keynesian Long-Run (B) Negative
aggregate supply theories?
(C) Constant
(A) Lower Taxes (D) None of the above
(B) Raise Inflation
(C) Weaken the power of Unions 784. Which branch of macroeconomics specifi-
cally focuses on the problems of develop-
(D) Increase one or more of the four facing economies?
tors of production
(A) Development Economics
779. Nonsystematic upturns and downturns (B) Monetary Economics
of real GDP (C) Public Finance
(A) business cycles (D) Trade Cycle Theory
776. B 777. C 778. D 779. B 780. D 781. D 782. C 783. B 784. A 785. A
785. which of the following is a focus of the 791. If demand for golf balls decreases when
study of macroeconomics? the price of baseball gloves decreases, we
(A) inflation can stay that baseball gloves and golf balls
(B) average cost players are
(C) individual demand (A) normal goods
(D) factor market (B) inferior goods
(C) substitute goods
786. Whether the following items will be in-
cluded in National Income? (D) complementary goods
(A) Gains from sale of shares. (E) unrelated due to the substitution ef-
fect
(B) Dividend on shares
(C) Interest paid by one firm to another 792. An appreciation of the United States dol-
(D) Gifts to a trust from Japan. lar on the foreign exchange market could
be caused by a decrease in which of the
787. When you open a savings account at a
following?
bank, you are using money as a
(A) United States interest rates
(A) store of value
(B) The United States consumer price in-
(B) unit of value
dex
(C) medium of exchange
(C) exports from the US
(D) consumer price index
(D) The tariff on goods imported into the
788. All other things being equal, which one US
of the following is most likely to increase
an economy’s underlying trend rate of 793. Which economist play the role in cash bal-
growth? A rise in the rate of growth of ance Approach?
(A) Fisher
(A) inflation (B) Cannan
(B) household income (C) Kemmerer
(C) imports of consumer goods (D) Robertson
(D) labour productivity
794. Nonworking people who are capable of
789. Money loses its value when it working but have given up looking for a
(A) It becomes too plentiful job due to the state of the job market
(B) becomes too portabale (A) Underemployed Workers
(C) is divisible (B) Discouraged Workers
(D) is durable (C) Labor Force
790. Which of the following measure of wel- (D) Market Basket
fare focuses on people and their capabil-
ities to access the development and wel- 795. number of federal reserve district
fare of a country? banks?
(A) Social Progress Index (A) 5
(B) Gross Domestic Product (B) 10
(C) Human Development Index (C) 12
(D) Gross National Happiness Index (D) 21
786. B 787. A 788. D 789. A 790. C 791. C 792. B 793. D 794. B 795. C 796. A
796. The Phillips Curve represents the trade- 801. Which one of the following is most likely
off between to result in a rise in savings by house-
(A) Inflation and unemployment holds?
(B) Price and quantity demanded (A) Higher interest rates and higher in-
(C) Price level and GDP come tax
(D) Two production options (B) Lower interest rates and higher in-
come tax
797. In deciding how many hours to work, (C) Higher interest rates and lower in-
NARAYAN CHANGDER
Beulah will make a choice that maximizes come tax
her ; that is, she will choose accord-
(D) Lower interest rates and lower in-
ing to her preferences for leisure time and
come tax
income.
(A) production possibilities frontier 802. All of the following changes will shift the
(B) Utility investment demand curve to the right EX-
(C) budget constraint CEPT
(D) opportunity cost (A) a decrease in the corporate income
tax rate
798. The multiplier operates in effectively (B) an increase in the productivity of new
Economy capital goods
(A) Open
(C) an increase in the real interest rate
(B) Closed
(D) an increase in corporate profits
(C) trade
(E) an increase in real gross domestic
(D) Business product
799. Expansionary fiscal policy would most
803. Which of the following is not the subject
likely be used during
matter of macroeconomics?
(A) recessions
(A) National Income Accounting
(B) times where economy is operating at
(B) Business cycle
full employment
(C) Laws of demand and supply
(C) periods of sustained, demand pull in-
flation (D) General price level
(D) periods of large positive output gaps 804. An equal initial increase in government
in GDP expenditure and taxation will
800. Consumers reduce spending because they (A) Leave the IS curve unchanged
lack confidence in the economy. All else be- (B) Only alter the slope of the IS curve
ing equal, what effect will this have on the (C) . Shift the IS curve down to the left
price level and GDP?
(D) Shift the IS curve up to the right
(A) Both prices and real GDP will decline.
(B) Both prices and real GDP will in- 805. if aggregate demand and real GDP are
crease. slowly beginning to rise and the unemploy-
(C) Prices will increase, but real GDP will ment rate is just beginning to fall, which
be unaffected. conclusion is most likely?
(D) Prices will decrease, but real GDP will (A) the economy is in a recovery phase
be unaffected. (B) the economy is facing a slowdown
797. B 798. C 799. A 800. A 801. C 802. C 803. C 804. D 805. A

(C) There are serious risks of high infla- 811. How could the Federal Reserve encour-
tion age banks to lend out more of their re-
(D) Aggregate supply is sharply decreas- serves?
ing (A) reduce the interest rate
(B) raise the required amount of reserve
806. Which of the following is the formula to
calculate GNP, based on the expenditure (C) increase the prime rate
approach? (D) reduce the money supply
(A) GNP = C + I + G + (X + M)
812. The proportion of any change in income
(B) GNP = C + I + G-(M-X) that is spent rather than saved is
(C) GNP = C + I + G + X + M (A) the multiplier
(D) GNP = C + I + G + M-X
(B) income determinants
807. Full employment GDP is (C) marginal propensity to consume
(A) output where the Natural Rate of Un- (D) macroeconomic equilibrium
employment is achieved
813. What is NOT a consequence of contrac-
(B) Output without cyclical unemploy-
tionary fiscal policy
ment
(A) aggregate demand shifts left
(C) output where there is non-
accelerating inflation (B) price level increases
(D) All of the above (C) unemployment increases
(D) output decreases
fiscal policy? 814. Which of the following is an example of
(A) Measures to boost productivity transfer income
(B) An increase in the top rate of income (A) Bonus
tax (B) Unemployment allowance
(C) A cut in interest rates (C) Compensation of employees
(D) An additional £30bn of quantitative (D) All of above
easing
815. Which one of the following is the best
809. A price index determined by measuring definition of a household’s total saving?
the price of a standard group of goods
(A) An injection into the circular flow of
meant to represent the market basket of
income
a typical urban consumer.
(B) Contributions to a pension fund for re-
(A) Gross Domestic Product
tirement
(B) Consumer Price Index
(C) Money placed in bank and building so-
(C) Unemployment ciety accounts
(D) Inflation (D) That part of disposable income not
810. The consumer price index is a measure of spent on consumption
(A) gross domestic product 816. Type of unemployment that occurs when
(B) aggregate suply workers skills do not match those needed
(C) aggregate demand for the jobs available.
(D) inflation (A) Seasonal Unemployment
806. B 807. D 808. B 809. B 810. D 811. A 812. C 813. B 814. B 815. D 816. B
(B) Structural Unemployment (B) classical policy

(C) Frictional Unemployment (C) non discretionary fiscal policy
(D) Cyclical Unemployment (D) Discretionary policy
817. Which of the following is the major as- 823. When we have unlimited needs and
sumption of the classical school of eco- wants, but a limited supply of a particular
nomics? resource
(A) Lack of aggregate demand causes in- (A) deforestation
NARAYAN CHANGDER
voluntary unemployment (B) extinction
(B) Govt’s fiscal operations can reduce (C) scarcity
unemployment (D) choice
(C) Unemployment & inflation can exist 824. Monetary policies the Federal Reserve
together can adopt include all of the following EX-
(D) Economy will be in full employment in CEPT
the long run (A) raising the interest rate.
818. Identify all incomes (B) buying government bonds.
(C) lowering the reserve requirement.
(A) Shares
(D) raising personal income tax rates.
(B) Interest
(C) Profits 825. When you buy and sell items from a
(D) Pension store, you are using money as a
(A) medium of exchange
819. How many phases of trade cycle? (B) store of value
(A) 1 (C) unit of value
(B) 2 (D) consumer price index
(C) 3
826. Gross National Happiness Index is devel-
(D) 4 oped in
820. Which President is on the $5 dollar Bill? (A) India
(A) Washington (B) Bhutan
(C) Nepal
(B) Jackson
(D) Oman
(C) Hamilton
(D) Lincoln 827. Consider the following data relating to
the price index for an economy.2012
821. Goods that last fewer than 3 years = 1002013 = 982014 = 1032015 =
(A) Intermediate Goods 104Which of the following statements is
(B) Non-Durable Goods true, based on these data?
(C) Final Goods (A) Inflation was highest in 2015
(D) Durable Goods (B) The economy experienced deflation in
2013
822. Congress creates a new bill that is de- (C) Money gained in value over the period
signed to change AD through gov. spend- 2012-14
ing or taxation. (D) All prices rose over the period 2012-
(A) Keynesian policy 14
817. D 818. B 818. C 819. D 820. D 821. B 822. D 823. C 824. D 825. A 826. B
827. B 828. A
828. When the Federal Reserve buys govern- (C) Consumer price index
ment securities on the open market, which (D) Market basket
of the following will decrease in the short
run? 834. a plan to reduce inflation and slow the
(A) Interest rates economy by the congress and president
(B) Taxes (A) Contractionary Fiscal Policy
(C) Investment (B) Expansionary Fiscal Policy
(D) The money supply (C) Contractionary Monetary Policy
829. When the economy is working properly, (D) Expansionary Monetary Policy
and at a normal rate of growth, the unem-
ployment rate is usually around: 835. Another name for a “flat” tax is which
(A) 0-2 percent of the following?
(B) 2-8 percent (A) corporate tax
(C) 4-6 percent (B) proportional tax
(D) 15-20 percent (C) progressive tax
(D) regressive tax
830. Which one of the following indicates a
contractionary monetary policy?
836. The long-run aggregate supply curve will
(A) A fall in the budget deficit shift to the right when
(B) A rise in the money supply (A) foreign exports increase
(C) An increase in the national debt
(B) government spending increases
(D) Appreciation of the exchange rate
(C) investment increases
831. Liquidity function is the function of (D) consumption increases
(A) Primary function
(B) Secondary function 837. If fiscal policy is used to influence the
economy, this could involve changing
(C) Contingent function
(D) Both 1 and 2 (A) the rate of interest
(B) the amount of money in circulation.
832. The first step to take in measuring infla-
(C) the budget deficit.
tion is to a.
(D) the balance of payments.
(A) convert the dollar cost of representa-
tive goods to an index value
838. The labour force survey measure of un-
(B) find the percentage change in the employment is
monthly price level
(A) Usually higher than the claimant
(C) select a market basket count
(D) find the average price of representa-
(B) Usually lower than the claimant count
tive goods
(C) Fully representative of the labour
833. Price index of about 90, 000 items in force
364 categories (D) A measure often used to make com-
(A) Price index parisons of unemployment between coun-
(B) Real GDP tries
829. C 830. D 831. C 832. C 833. C 834. A 835. B 836. C 837. C 838. A 838. D
839. B
839. How much did China’s GDP change by in bring a higher level of to a person than
Q1 2020? consumption of later units is a common pat-
(A) Increase 1.2% tern.
(B) Decrease 6.8% (A) opportunity cost
(C) Increase 3.2% (B) marginal benefit
(D) Decrease 2.9% (C) sunk cost
840. What constitutes Monetary Policy (D) utility
NARAYAN CHANGDER
(A) When a government changes taxes or 843. Unemployment caused by lack of skills or
spending levels demand
(B) When a government takes action to in- (A) Structural Unemployment
crease or decrease the Money Supply
(B) Frictional Unemployment
(C) When a government declares war on
another country. (C) Seasonal Unemployment
(D) When a government stores gold. (D) Discouraged Workers
841. A barter economy is different from a 844. If income remains the same, while the
money economy in that a barter economy average price level doubles, then:
(A) encourages specialization and divi- (A) Nominal income will fall
sion of labor (B) Real income will fall
(B) involves higher costs for each trans- (C) Nominal interest rates will fall
action
(D) Purchasing power will rise
(C) eliminates the need for a double coin-
cidence of wants 845. The total amount of goods and services
(D) has only a few assets that serve as a produced throughout the economy is
medium of exchange (A) aggregate demand
(E) promotes market exchanges (B) supply shock
842. The general pattern that consumption of (C) quantity supplied
the first few units of any good tends to (D) aggregate supply
1.3 Statistics
1. When data seems to be “gathered” (B) .00486
around a particular value or values. (C) .0096
(A) Symmetry
(D) Not enough information
(B) Gap
(C) Cluster 3. The positive standard deviations on a nor-
(D) Peak mal distribution curve mean what?
(A) Below average
2. A right-tailed test with n = 41 has a test
(B) Above average
statistic t = 2.72. Which is the correct p-
value? (C) Average
(A) 0.0033 (D) none of above
840. B 841. B 842. D 843. A 844. B 845. D 1. C 2. B 3. B

1.3 Statistics 159
4. What’s the rounding rule for the estimate (B) 1 and 6

of population proportions? (C) 4
(A) Round off to the same number of dec- (D) 7 and 8
imal places as given for the mean
(B) Round off to one or more decimal 10. The following are the three main forms of
place/s than the number of decimal presentation of data EXCEPT
places in the raw data (A) Textual presentation
(C) 3 decimal places (B) Data tables
(D) Round up to the next whole number (C) Diagrammatic presentation
5. The two types of statistics are (D) Organizational Charts
(A) descriptive and informational.
11. In Statistics, error refers to:
(B) inferential and quantitative.
(A) mistakes resulting in wrong decisions
(C) descriptive and cualitative
(B) mistakes resulting from computation
(D) inferential and descriptive.
(C) difference between two parameter
6. To determine how to vote on a bill, a sen- values
ator calls random constituents to ask their (D) difference between an observed
opinion. value and a parameter
(A) Survey
(B) Observational Study 12. What is the mean of this set of data? 2,
15, 7
(C) Experiment
(A) 24
(D) none of above
(B) 3
7. A teacher hands out an index card and (C) 6
asks all of her students to write down
(D) 8
the following information:age, height (in
inches), and what grade they are in.Which 13. Determine if the given sample is random
of the following best describes her method or not random:Rachel chooses each player
of data collection? on the soccer team whose last name starts
(A) Census with a vowel to participate in a survey
(B) Simple Random Sample about team sports
(C) Cluster Random Sample (A) biased sample
(D) Stratified Random Sample (B) unbiased sample
8. How often something occurs. (C) random sample
(A) Frequency (D) biased population
(B) Population 14. The mean of the square of first 11 natural
(C) Range numbers is
(D) Mean (A) 26
9. What is the mode of the following data (B) 46
set:1, 1, 4, 5, 6, 7, 8, 9 (C) 48
(A) 1 (D) 52
4. C 5. D 6. A 7. A 8. A 9. A 10. D 11. D 12. D 13. A 14. B 15. C

15. Which question is best suited for a statis- (C) I-III-IV-II

tical investigation? (D) I-IV-III-II
(A) How tall is the tallest student at
Parker Middle School? 20. What does it mean for a graph of data to
(B) How tall is the shortest student at be SYMMETRICAL?
Parker Middle School? (A) Most of the data is grouped to the left
(C) How tall are the students at Parker side
Middle School?
NARAYAN CHANGDER
(B) Most of the data is grouped to the
(D) How tall is the oldest student at right side
Parker Middle School?
(C) Most of the data is in the middle (draw
16. Which of the following IS an example of a a line down the middle and both sides look
statistical question? the same)
(A) How many gadgets does your best- (D) none of above
friend have?
(B) How many events has your section 21. the probability that the interval estimate
won in the school fair? contains the parameter
(C) How many flavors of Milktea has my (A) Critical Values
teacher already tasted? (B) Statistics
(D) How many tourist destinations has (C) Confidence Level
each of my teachers been to?
(D) Estimate
17. What is the mode? 3, 12, 12, 14, 15, 4,
12, 12, 16, 16 22. A poll about favorite sports is taken from
(A) 12 100 seniors in a high school where the se-
nior class has 575 students. 23% of re-
(B) 16
spondents said that baseball was their fa-
(C) 4 vorite sport.The “100” is the
(D) none of above (A) Sample Size
18. An example of a quantitative discrete vari- (B) Population Size
able would be: (C) Statistic
(A) how many cars are in your neigh-
(D) Parameter
borhood.
(B) the weight of your family mem- 23. A musician wanted to see what people
bers. who bought his last album thought about
(C) the temperature in Monterrey. the songs.Which choice best represents a
(D) the amount of liters of soda con- sample?
sumed in a family. (A) Every person who bought the album.
19. Arrange the following in proper se- (B) A selection of people who didn’t want
quence:I. CollectionII. InterpretationIII. Or- to buy the album.
ganizationIV. Analysis (C) 250 girls who bought the album.
(A) I-II-III-IV (D) A selection of 3, 294 people who
(B) I-III-II-IV bought the album.
16. D 17. A 18. A 19. C 20. C 21. C 22. A 23. D 24. C

1.3 Statistics 161
24. All of the below sets have the same 29. Which one of the following is a relative
mean.Set 1-Standard Deviation=3.1Set measure of Dispersion?
2-Standard Deviation=4.9Set 3-Standard (A) Standard Deviation
Deviation=1.7Set 4-Standard Devia- (B) Variance
tion=3.2Which set of data probably has
(C) Coefficient of Variation
the points closest to the mean?
(A) 1
(B) 2 30. Assign each car in a dealership a number
(C) 3 and then use a random-number table to se-
lect the cars to be inspected.
(D) 4
(A) systematic
25. Summarizes data using a single number. (B) random sample
The single number is found by finding the (C) convenience
sum of the data divided by the number of (D) biased sampling
pieces of data.
(A) Median 31. Descriptive Statistics helps us to
(B) Range (A) Organize data and represent data
(C) Mean (B) Make decisions based on data
(D) Mode (C) Make objective decisions
(D) none of above
26. It is the one that influences the depen-
dent or outcome variable but was not sep- 32. P be the probability of an event. P = 0.5
arated from the independent variable. implies
(A) confounding variable (A) the even is likely to happen.
(B) placebo (B) the event is unlikely to happen.
(C) the event is equally likely to happen
(C) double-blinding
or not to happen.
(D) treatment variable
(D) the expression is nonsense
27. How will ‘Parental activities’ be cate-
33. consist of information coming from ob-
gorised
servations, counts, measurements, or re-
(A) Economic activity sponses.
(B) Non-economic activity (A) Statistics
(C) None of these (B) Data
(D) none of above (C) Population
(D) Sample
28. According to a random telephone survey
of 200 adults, 75% of all working adults 34. Which of the following is not the limita-
in the U.S. are satisfied with their current tions of statistics:
job. What is the population in this sur- (A) Statistics can be Misused
vey?
(B) Statistics does not deal with individ-
(A) 200 adults ual
(B) adults in the U.S. (C) statistics can study of market struc-
(C) 75% of adults tures
(D) none of above (D) Statistical laws are not exact
25. C 26. A 27. B 28. B 29. C 30. B 31. A 32. C 33. B 34. C
35. REVIEW:When a graph is symmetrical, (C) 7

what would you use to describe the cen- (D) 8
ter and spread?
(A) Mean and IQR 40. What is the outlier of the following data:5,
3, 4, 6, 7, 9, 19, 2, 8, 10, 5
(B) Median and IQR
(A) 7.091
(C) Mean and Standard Deviation
(D) Median and Standard Deviation (B) 6
(C) 5
NARAYAN CHANGDER
36. Deals with the formulation of inferences (D) 19
about conditions that exist in a population
(E) 17
from study of a sample drawn from a pop-
ulation. 41. A questionnaire is a list of well-planned
(A) Statistics questions written on paper which can ei-
(B) Descriptive statistics ther be personally administered of mailed
(C) Inferential statistics by the researcher to the respondents using
any of the following forms EXCEPT
(D) Statistician
(A) Guided-response type
37. The data set below has an outlier of 42.2, (B) Recall type
5, 12, 15, 19, 4, 6, 11, 16, 18, 12, 12,
(C) Free response type
42What effect does removing the outlier
have on the distribution of the data? (D) Interview type
(A) The mean will decrease 42. It is the characteristic or attribute of
(B) The median will decrease a sample or population that changes or
(C) The mean will increase varies for different individuals or things.
(D) The median will increase (A) Random Variable
(B) Variable
38. A business evaluates a proposed venture
(C) Statistics
as follows. It stands to make a profit of
$10, 000 with probability 3/20, to make (D) Sample Space
a profit of $5000 with probability 9/20,
43. Social security number of a worker is
to break even with probability 5/20, and
lose $5000 with probability 3/20. The (A) Ordinal Scale
expected profit in dollars is (B) Nominal Scale
(A) 1500 (C) Interval Scale
(B) 0 (D) Reason Scale
(C) 3000
44. A recent survey found that out of 400 ran-
(D) 3250 dom American adults, 89% pay their bills
on time. The margin of error in this survey
39. Mrs. Jones surveyed the class for the
was 2%. What is the interval of values in
number of letters in their given first name.
which the truth is likely found?
The data is recorded below.{5, 8, 6, 5, 4,
9, 8, 7, 6, 3, 8, 7, 5, 6, 7, 8}What is the (A) 89%-91%
interquartile range of the data? (B) 87%-89%
(A) 2 (C) 87%-91%
(B) 3 (D) 388-402
35. C 36. C 37. A 38. C 39. B 40. D 41. D 42. B 43. B 44. C 45. C
1.3 Statistics 163
45. When p-value is greater than alpha we: 51. Probability can be written as
(A) Reject Ho (A) a fraction
(B) Fail to reject Ha (B) a decimal
(C) Fail to reject Ho (C) a percent
(D) Reject Ha (D) all of the above
46. The mean of a set of numbers is X . If 52. The outlier is:
each number is multiplied by z, the mean (A) an outcome which lies outside of the
is mean
(A) X + z (B) where a single observation does not
(B) X − z fit with the expected outcome
(C) z X (C) when a sample favours a certain out-
(D) X come
47. What is the word in statistics for any char- (D) where a single outcome is provided
acteristic or attribute of a person, place, or 53. Population mean is denoted by
thing?
(A) π
(A) variable
(B) µ
(B) descriptive statistic
(C) θ
(C) inferential statistic
(D) σ
(D) parameter
54. Inferential statistics makes judges or
48. What is a variable?
claims from analyzing
(A) It is a set that groups a series of data
(A) a sample from a population.
with similar characteristics
(B) It is a characteristic of an object (B) a whole population.
(C) It is a number (C) data obtained.
(D) It is a set that groups a series of data (D) a random sample.
with diferent characteristics 55. In testing hypotheses, which of the follow-
49. Samples used were too small and conve- ing would be strong evidence against the
nient are examples of which kind of mis- null hypothesis?
use? (A) using a small level of significance
(A) Suspect Samples (B) using a large level of significance
(B) Ambiguous Averages (C) obtaining data with a small p-value
(C) Changing the Subject (D) obtaining data with a low test statis-
(D) Detached Statistics tic
50. The entire set of items from which data 56. consists of information coming from
can be selected? observations, responses etc
(A) Population (A) Sample
(B) sample (B) Data
(C) statistics (C) Data set
(D) data (D) Population
46. C 47. A 48. A 49. A 50. A 51. D 52. B 53. B 54. A 55. C 56. B
57. Farmer Joe separates his farm into 10 re- (C) Finding the Mean
gions. He then randomly selected 5 trees (D) Range
from each region to estimate the number
of apples produced on his apple tree farm. 63. Descriptive Statistics is useful for
This is sampling. (A) comparing the statistical events
(A) Cluster (B) comparing two different samples
(B) Systematic (C) describing the quantitative character-
(C) Stratified istics of variables
NARAYAN CHANGDER
(D) Simple (D) none of above
58. Statistic measures and analizes 64. Mrs. Gillihan asked each student in her
class these four questions. Which of the
(A) change over time.
following questions is statistical?
(B) variability.
(A) How many times do you exercise each
(C) independability. week?
(D) information. (B) How many laps around the school
track is equivalent to a mile?
59. Which measure of central tendency best
represents this set of data:3, 18, 2, 0, 1, (C) How many cups are in a gallon?
0, 2, 1 (D) How many hershey chocolate bars
(A) Mean come in a package for s’mores?
(B) Median 65. A graph that displays the highest and low-
(C) Mode est quarters of data as whiskers, the mid-
(D) Range dle two quarters of the data as a box, and
the median.
60. To study the amount of time students (A) Line Graph
spend doing homework each day, use (B) Histogram
a random number generator to select
(C) Box Plot
25 students from the student enrollment
database to survey. (D) Data
(A) Convenience Sample 66. What is the MEDIAN of a data set?
(B) Simple Random Sample (A) The middle value
(C) Stratified Random Sample (B) The number that occurs most fre-
(D) Interval Sample quently
(C) The average
61. Mass of a cake.
(D) The difference between the max and
(A) qualitative min values
(B) quantitative discrete
(C) quantitative continuous 67. A finite population is one that
(D) none of above (A) can be physically listed
(B) the membership in the population is
62. Put data set in order from least to great- unlimited
est and find the middle number. (C) ends abruptly due to a catastrophy
(A) Finding the Median (D) ends abruptly due to natural causes,
(B) Finding the Mode such as a flood or the ice age
57. C 58. B 59. B 60. B 61. C 62. A 63. C 64. A 65. C 66. A 67. A 68. A
1.3 Statistics 165
68. numerical value obtained from applying 74. The sum of the deviations of the scores
the estimator using the sample data; can from mean is always
be a value or range of values that approx- (A) 2
imate a parameter
(B) 1
(A) Estimate
(C) 0
(B) Estimator
(D) -1
(C) Estimation
(D) none of above 75. Your age is an example of?
69. What are characteristics that cannot be de- (A) Quantitative/ numeric data
fined by a number, such as shape or color? (B) Qualitative/categorical data
(A) descriptive statistics (C) Quantitative and discrete
(B) inferential statistics (D) Quantitative and continuous
(C) categorical variables
(D) numerical variables 76. Raw, unprocessed facts and figures are
known as
70. A science of collection, presentation of (A) information
data.
(B) knowledge
(A) Population
(C) data
(B) Statistics
(C) Analysis of Data (D) wisdom
(D) none of above 77. Statistics is concerned with ?
71. What do you call a number that describes (A) Qualitative information
a population statistics? (B) Quantitative information
(A) sample statistic (C) Either a or b
(B) parameter (D) Both a and b
(C) variable
(D) distribution 78. the average value (statistic) deviates
from the parameter
72. The entire group of objects or individuals (A) Biased Estimate
considered for a survey.
(B) Positive Bias
(A) biased sample
(B) population (C) Unbiased Estimate
(C) random sample (D) Negative Bias
(D) sample 79. What is the term in statistics for the en-
73. Refers to the organization of data into ta- tire collection or group of individuals being
bles, graphs and charts. studied?
(A) Collection of Data (A) population
(B) Collation of Data (B) sample
(C) Presentation of Data (C) parameter
(D) None of the above (D) statistic
69. C 70. B 71. B 72. B 73. C 74. C 75. D 76. C 77. D 78. A 79. A 80. D
80. The following are uses of line graphs EX- 85. A sample in which each individual or ob-
CEPT ject in the entire population has an equal
(A) When you want to show trends. For chance of being selected.
example, how house prices have in- (A) biased sample
creased over time. (B) population
(B) When you want to make predictions (C) random sample
based on a data history over time. (D) sample
(C) When comparing two or more differ-
NARAYAN CHANGDER
ent variables, situations, and information 86. Coefficient of correlation will be always
over a given period of time. will always be
(D) When showing percentage or propor- (A) More than 0
tional data. (B) More than-1
(C) More than 1
81. Identify the VARIABILITY in the following
(D) Between-1 and 1
question:What are the heights of the stu-
dents at Clarke Middle School? 87. Why is statistics important?
(A) Heights (A) To solve problem
(B) Students (B) Help to investigate relationship be-
(C) Clarke Middle School tween variables
(D) ages (C) Help in making wise decision
(D) To provide solution/option for prob-
82. These are the three main types of obser- lem based on proper statistical study
vational studies.
(A) cross-sectional study 88. If a question is statistical what does it
have
(B) retrospective study
(A) data
(C) experimental study
(B) data without variability
(D) longitudinal study
(C) data with variability
83. In statistics, it is the characteristic, prop- (D) none of above
erty or attribute that makes members of a
89. Which interval shows 68% of the data
group vary.
given a mean of 15 and a standard devia-
(A) Continuous tion of 3?
(B) Discrete (A) 9 to 21
(C) Polynomic (B) 12 to 18
(D) Variable (C) 6 to 24
(D) 13 to 16
84. Find the z-score for 62 given a mean of
30 and a standard deviation of 20. 90. Median means?
(A) 1.6 (A) Most frequent
(B) -1.6 (B) Middle number
(C) 11.6 (C) Average
(D) -11.6 (D) Largest minus smallest
81. A 82. A 82. B 82. D 83. D 84. A 85. C 86. D 87. A 87. B 87. C 87. D
88. C 89. B 90. B 91. B
1.3 Statistics 167
91. Mrs. Trahan samples her class by select- 97. Which of the following is an example of
ing every third person on her class list. discrete data?
Which type of sampling method is this? (A) Average daily temperature
(A) Simple
(B) Number of Facebook likes
(B) Systematic
(C) Number of litters of milk in a gallon
(C) Stratified
(D) Volts of electricity
(D) Cluster
92. What is the mode of the following data 98. Identify the Population:Gwinnett County
set:1, 2, 2, 2, 5, 9 Public Schools randomly selected 230
(A) 1 teachers to find out which technology re-
source is the most effective. 30 teachers
(B) 2
chose Safari Montage, 45 selected Learn
(C) 5 Zillion, 100 chose Ed Puzzle, and 55 chose
(D) 9 Kahoot. GCPS concluded that all teachers
prefer Ed Puzzle.
93. Statistics is defined in terms of statistical
method in the (A) 230 Teachers
(A) Singular sense (B) All teachers
(B) Plural sense (C) 100 Teachers
(C) Either a or b (D) 55 Teachers
(D) Both a and b
99. An estimator should have both and
94. Marianne wanted to know students’ opin-
ion on the new schedule at school. So she (A) CORRECT
randomly selected 2 students from each (B) PRECISION
class during second period. This is a form (C) VALUES
of:
(D) ACCURACY
(A) Convenience Sampling
(B) Simple Random Sampling (E) STANDARD
(C) Stratified Random Sampling 100. A sample is
(D) Cluster Sampling
(A) a subset of a population
95. It consists of the collection, organization, (B) an infinite selection of a population
summation, and presentation of data.
(C) a characteristic of a population
(A) Statistics
(D) a data value generated by the statis-
(B) Probability
tical information
(C) Descriptive Statistics
(D) Inferential Statistics 101. The distance between the greatest num-
ber and the least number in a set of data.
96. Variables can be classified as
(A) Mean
(A) qualitative and quantitative.
(B) qualitative and categorical. (B) Median
(C) quantitative and categorical. (C) Range
(D) none of above (D) Mode
92. B 93. A 94. C 95. C 96. C 97. B 98. B 99. B 99. D 100. A 101. C 102. D
102. What is the branch of mathematics deal- (C) Probability

ing with the collection, organization, anal- (D) Variable
ysis, interpretation and presentation of
data? 108. What would be the sample i n this exam-
(A) Algebra ple? Surveyors in a mall choose shoppers
to ask about products they prefer.
(B) Geometry
(A) the surveyors
(C) Probability
(B) all shoppers in the mall
(D) Statistics
NARAYAN CHANGDER
(C) the shoppers who were asked their
103. The root mean square deviation of obser- preferences
vations from the arithmetic mean is (D) none of above
(A) Quartile deviation
109. A scientific body of knowledge which
(B) Standard deviation
deals with the collection, organization,
(C) Mean deviation presentation, analysis and interpretation
(D) None of these of data.
104. What are the characteristics of a param- (A) Algebra
eter? (B) Geometry
(A) Population is complete (C) Statistics
(B) Population is fixed (D) none of above
(C) Population is not fixed
110. A gaming website wanted to find out
(D) Population is not complete which console its visitors owned. Which
choice BEST represents a population?
105. Which economic activity deals with use
of goods and services for the satisfaction (A) Visitors with an ‘e’ in their user name.
of human wants? (B) Visitors to the 3DS section.
(A) Consumption (C) Visitors over 22.
(B) Production (D) All the website visitors.
(C) Distribution
111. Tom surveys 40 moviegoers by randomly
(D) Exchange choosing their names. What type of sam-
pling method is this?
106. “The average Japanese woman lives to
the age of 86.” What is the population (A) Random
behind this statistic? (B) Convenience
(A) A randomly selected group of (C) Biased
Japanese women (D) Self-Selected
(B) All of the women in the world
112. The statistical data can be represented
(C) All of the women in Japan
by:
(D) Everybody in Japan
(A) Frequency bar graph
107. The science of collecting, describing, and (B) Pie graph
interpreting data. (C) Increasing cumulative frequency poly-
(A) Statistic gon
(B) Sample (D) All choices
103. B 104. A 104. B 105. A 106. C 107. A 108. C 109. C 110. D 111. A 112. D
113. A
1.3 Statistics 169
113. This is the lowest level of measurement. 119. What is the meaning of ordinary busi-
(A) Nominal ness of life?
(B) Ordinal (A) Doing business in life by ordinary peo-
ple
(C) Interval
(B) Doing ordinary business by people
(D) Ratio (C) Gainful employment of people in some
economic activities
114. Identify the outlier for the given data?
23, 34, 27, 7, 30, 26, 28, 31, 34 (D) Earning weath in life
(A) 7 120. Which of the following statistical process
(B) 23 is used to generalize the results from sam-
ple to its respective population
(C) 31
(A) Descriptive statistics
(D) 34
(B) Comparative statistics
115. What percent of data lies within 2 stan- (C) Inferential statistics
dard deviations from the mean? (D) Predictive statistics
(A) 95%
121. A beverage company wanted to see if
(B) 99% people in the United States liked their new
(C) 68% logo.Which choice best represents a popu-
(D) 100% lation?
(A) A selection of logo artists.
116. Which of the following is NOT an eco- (B) Every person in the United States.
nomic activity (C) A selection of shoppers from different
(A) Production of books shoppers from different states.
(B) Investment in stocks (D) 3, 800 children age 5-15
(C) Donation of blood 122. Find the median from the given set of
(D) Consumption of Ice creams data.1, 2, 3, 4, 2, 3, 2, 3
(A) 2.5
117. When there are no data points around
(B) 4
particular values.
(C) 5
(A) Cluster
(D) 1
(B) Peak
(C) Gap 123. The parameter is a number describing
the:
(D) Symmetry
(A) population
118. What is the upper quartile of the set of (B) sample
data; 2, 4, 6, 6, 7, 8, 10 (C) survey
(A) 4 (D) percent
(B) 6 124. A sample chosen at random form a ran-
(C) 8 domly chosen subgroup or subgroups.
(D) 2 (A) random sample
114. A 115. A 116. C 117. C 118. C 119. C 120. C 121. B 122. A 123. A 124. C
125. C
(B) systematic sample 131. What is the meaning of statistics in plu-

(C) stratified sample ral sense?
(D) none of above (A) Data
(B) Statistical Methods
125. Variables represent
(A) a preference in people. (C) Statistical Enquiry
(B) a value we’re trying to find. (D) Research
(C) a characteristic we are studying. 132. subjects were taken from a population
NARAYAN CHANGDER
(D) a result we are calculating. with an equal numberof males and fe-
126. Marshall’s definition of Economics is also males.
on known as (A) Simple Random Sample
(A) Wealth definition (B) Sample of Convenience
(B) Growth definition (C) Information
(C) Material welfare definition (D) Systematic Sample
(D) Scarcity definition
133. A frequency distribution is a tabular sum-
127. Mode is mary of data showing the
(A) Least frequent value (A) fraction of items in several classes.
(B) Middle most value (B) percentage of items in several
(C) Position value classes.
(D) Most frequent value (C) relative percentage of items in sev-
128. Which of the following are levels of mea- eral classes.
surement? (D) number of items in several classes.
(A) Nominal data
134. The statistic is a number describing the:
(B) Ordinal data
(A) population
(C) Interval data
(D) Quantitative data (B) sample
(E) Qualitative data (C) survey
(D) percent
129. Level of measurement where there is log-
ical ordering or categories. 135. What is the mean of 3, 7, 9, 8, and 13?
(A) Nominal (A) 5
(B) Ordinal (B) 6
(C) Interval (C) 7
(D) Ratio
(D) 8
130. Mark bowled 7 games last weekend. His
scores are:155, 165, 138, 172, 127, 193, 136. Find the area under the standard normal
142. What is the range of Mark’s scores? curve where z < 2.42 .
(A) 193 (A) .008
(B) 66 (B) .992
(C) 127 (C) .301
(D) 172 (D) .862
126. C 127. D 128. A 128. B 128. C 129. B 130. B 131. A 132. A 133. D 134. B
135. D 136. B 137. A
1.3 Statistics 171
137. The term ‘Statistics’ was first used by 142. Which type of numerical data uses only
(A) Gottfried Achenwall whole numbers?
(B) Paul A. Samuelson (A) Categorical data
(C) Lord Robbins (B) Continuous data
(D) J.B.Say (C) Discrete data
138. It refers to the process of making conclu-
sions based on the presented data. 143. A method of collecting information about
(A) analysis a certain group of people by asking a ques-
(B) interpretation tion or set of questions
(C) collection (A) population
(D) organization (B) data
139. What is the branch of statistics that in- (C) census

volves organizing, displaying and describ- (D) survey
ing data?
(A) descriptive statistics 144. The indices of ( value of) scatteredness
or variability
(B) inferential statistics
(A) Measures of Central tendency
(C) sports statistics
(B) Coefficient of variation
(D) health statistics
(C) Coefficient of correlation
140. Identify the Sample:A restaurant wants (D) Measure of dispersion
to know if customers buy dessert when
they eat out. As people leave the restau- 145. The speed of the car was 45 mph.
rant one evening, 20 people are surveyed
(A) Qualitative
at random. Eight people say they usu-
ally order dessert when they eat out. The (B) Quantitative
restaurant concluded that most customers (C) Both
do not order dessert. (D) Neither
(A) 20 customers
(B) All customers 146. What is the mean?
(C) 8 customers (A) 9
(D) Dessert (B) 18
(C) 36
141. Political webpages often allow read-
ers to rate whether they strongly agree, (D) 12
agree, disagree, or strongly disagree with
the President’s decision on any given situ- 147. Ethnic group categories of people in a
ation. This is a form of: neighborhood.
(A) Voluntary Response (A) Nominal
(B) Convenience Sampling (B) Ordinal
(C) Stratified Random Sampling (C) Interval
(D) Cluster Sampling (D) Ratio
138. B 139. A 140. A 141. A 142. C 143. D 144. D 145. B 146. D 147. A 148. A
148. Complete the definition:A is a subset 153. What does the standard deviation tell us
of a population about the data set?
(A) sample (A) How spread out the numbers are
(B) sampel (B) How much each number in the data
(C) people set increases by
(C) How much each number in the data
(D) statistics
set decreases by
(E) group
(D) none of above
NARAYAN CHANGDER
149. Who has defined economics as “The 154. According to , “Economics is the sci-
study of man in the ordinary business of ence of wealth”
life”?
(A) Adam Smith
(A) Adam Smith
(B) Alfred Marshall
(B) Alfred Marshall
(C) Prof. Samuelson
(C) Lionel Robbins (D) lionel Robbins
(D) Amartya Sen
155. a range of values where the true value
150. If you want to perform a quality study, will most likely fall
you need to use the following data: (A) Accuracy
(A) LC = 98% Z= 1.96 (B) Point Estimate
(B) LC = 90% Z= 1.96 (C) Precision
(C) LC = 99% Z= 2.33 (D) Interval Estimate
(D) LC = 99% Z=2.575
156. How does statistics help in economic
151. Ervin bowled 7 games last weekend. His planning
scores are:155, 165, 138, 172, 127, 193, (A) helps to make best use of national re-
142. What is the range of Ervin’s scores? sources
(A) 193 (B) helps compare development of vari-
ous countries
(B) 127
(C) All of these
(C) 60
(D) None of these
(D) 66
157. Study the data set shown. 15, 14, 19,
152. Marcos wants to find out how many stu- 16, 22, 20, 17, 20, 29, 21, 18 Which
dents at his school like to go to the movies. statement is true about this set of data?
Which survey method is likely to produce
(A) The range is 3
a representative survey?
(B) The range is 20
(A) Ask the boys in the boys locker room.
(C) The median is 18.5
(B) Ask the 25 students in his homeroom
class. (D) The median is 19
(C) Ask students coming out of a movie 158. If the mean of five observations x, x +
theater. 2, x + 4, x + 6, x + 8 is 11, then the mean
(D) Ask half of the 34 students on the soc- of first three observations is
cer team. (A) 9
149. B 150. D 151. D 152. B 153. A 154. A 155. D 156. C 157. D 158. A 159. C
1.3 Statistics 173
(B) 11 (C) Interpretation of Data

(C) 13 (D) Non Parametric
(D) 15
165. In statistics, a population consists of
159. Sum of data points divided by the num-
(A) All people living in country
ber of data points.
(B) All people living are under study
(A) Finding the Median
(B) Finding the Mode (C) All subjects and objects whose char-
acteristics are being studied
(C) Finding the Mean
(D) none of above
160. The facts or numbers gathered in a sur- 166. Which of the following are parametric
vey is an example of? tests?
(A) sample (A) t-test
(B) data (B) f-test
(C) census (C) Anova
(D) statistics (D) Chi-square test
161. It is a variable whose values depend on 167. Variables which can assume values that
outcomes of a random phenomenon. manifest the concept of attributes
(A) Random Variable
(A) Continuous
(B) Discrete Variable
(B) Discrete
(C) Continuous Variable
(C) Qualitative
(D) Independent Variable
(D) Quantitative
162. Solve to find the equivalent fraction.4/5
= x /15 168. A student measures the weight of every
(A) 8/15 individual in his batch. This means that he
(B) 12/15 will get
(C) 10/15 (A) Sample
(D) none of above (B) Statistics
(C) Variable
163. A sample in which every member of the
population has an equal chance of being se- (D) Parameter
lected.
169. A company consists of four members.
(A) random sample
How many sample points are in the sample
(B) biased sample space when three officers:president, vice
(C) sample president, and secretary are to be cho-
(D) population sen?
(A) 3
164. Refers to drawing of conclusions or gen-
eralizations from the analysed data. (B) 18
(A) Analysis of Data (C) 24
(B) Collection of Data (D) 30
160. B 161. A 162. B 163. A 164. C 165. B 166. A 166. B 166. C 167. C 168. D
169. C 170. C 171. A
170. A sample should be 175. All subjects under investigation

(A) representative of only middle school (A) Sample
students only (B) Data
(B) a very large group (C) Data set
(C) representative of the population (D) Population
(D) representative of people who volun-
teer 176. Find the z-score for 48 given a mean of
50 and a standard deviation of 5.
NARAYAN CHANGDER
171. Square of standard deviation is called
(A) 2.5
(A) Variance
(B) -2.5
(B) Mean
(C) -0.4
(C) Quartile deviation
(D) 0.4
(D) Range
177. Price, weight, height and velocity are ex-
172. Which of the following accurately de-
amples of
scribes the power of a statistical test of
hypothesis? (A) Qualitative Data
(A) It is equal to the p-value. (B) Quantitative Data
(B) It is equal to 1-(p-value). (C) Variable Data
(C) It is equal to the significance level. (D) Ordinal Data
(D) It is the probability that a test using a
178. The algebraic sum of the deviations of a
fixed value of α will reject H0 when a par-
set of n values from their mean is
ticular alternative value of the parameter
is true. (A) 0
(B) n-1
173. Disneyland often surveys its guests as
(C) n
they exit a restaurant during their visit.
The surveyor stands at the restaurant exit, (D) n + 1
counts the number of people leaving, and
surveys every 25th guest.This is a form 179. In this study, the researcher manipulates
of: one of the variables and tries to deter-
mine how manipulation influences other
(A) Simple Random Sample variables.
(B) Stratified Random Sample
(A) observational study
(C) Voluntary Response
(B) cross-sectional study
(D) Systematic Random Sampling
(C) longitudinal study
174. Andrea got a 98, 90, and 94 on her (D) experimental study
math quizzes. What was her average quiz
score? 180. Religious affiliation is an example of?
(A) 92 (A) Quantitative/numeric data
(B) 93 (B) Qualitative/categorical data
(C) 94 (C) Quantitative and discrete
(D) 95 (D) Quantitative and continuous
172. D 173. D 174. C 175. D 176. C 177. B 178. A 179. D 180. B 181. A
1.3 Statistics 175
181. Find the mean of the numbers:2, 4, 5, 5, (B) Sample

6, 8 (C) Both can be the same
(A) 5 (D) Not enough information
(B) 4
(C) 3 187. Descriptive statistics
(D) 2 (A) use data from a sample to answer
questions about population.
182. A restaurant chain wanted to find out (B) allow you to generalize beyond the
how the customer experience was in data at hand.
a store.Which choice best represents a
statistic? (C) summarize and describe data.
(A) The percentage of all customers that (D) none of above
reported a positive experience.
188. A particular observation which occurs
(B) The percentage of customers sur- maximum number of times in a given data
veyed that reported a positive experience. is called its
(C) All customers. (A) Frequency
(D) A random selection of customers that (B) Range
were surveyed.
(C) Mode
183. For a data containing 15 items arranged (D) Median
in ascending order, what item is the me-
dian of the data 189. You have a mean of 56 and a standard
(A) 7th item deviation of 4.3. What is-2 standard de-
(B) 8th item viations from the mean?
(C) 6th and 7th item (A) 60.3
(D) 7th and 8th item (B) 47.4
(C) 51.7
184. Welfare definition of Economics has been
(D) 64.6
given by:
(A) Lionel Robbins 190. Information collected by the researcher
(B) Adam Smith in quantitative or qualitative form are
(C) Alfred Marshall named as:
(D) Prof. Samuelson (A) Single score
(B) Raw score
185. Inference is
(C) Variable
(A) using a sample to make a judgement
about the population (D) Attributes
(B) a form of bias 191. What is the mean of the following data
(C) random sampling set:1, 2, 4, 9, 9
(D) a census (A) 1
186. Between a Population and Sample:which (B) 3
size is bigger? (C) 5
(A) Population (D) 15
182. B 183. B 184. C 185. A 186. A 187. C 188. C 189. B 190. B 191. C 192. D
192. A variable that takes only whole number 198. What is the the total area under the stan-
as its score is known as dard normal distribution curve?
(A) Continuous variable (A) 100
(B) Intervening variable (B) 25
(C) Dependent variable (C) .5
(D) Discrete variable (D) 1
193. The sample size of poll is 107 people. 199. The average waist size for teenage
NARAYAN CHANGDER
What is the approximate margin of error. males is 29 inches with a standard devi-
ation of 2 inches. If waist sizes are nor-
(A) 10%
mally distributed, determine the z-score of
(B) 3.1% a teenage male with a 33 inch waist.
(C) 2.38% (A) 2.00
(D) 1% (B) 1.00
(C) -2.00
194. If you score 76, 85, 97, and 83 on your
math tests, what would your median score (D) -1.00
be? 200. What is a quantitative variable that can
(A) 84 take on a certain number of values?
(B) 90 (A) categorical variable
(C) 85 (B) qualitative variable
(D) 88 (C) discrete variable
(D) numerical variable
195. These are units of information, often nu-
meric, recorded and used for the purpose 201. The collection and classification of data
of analysis. that are in the form of numbers.
(A) Questionnaire (A) Statistics
(B) Data (B) Data
(C) Statistics (C) Range
(D) none of above (D) Population
196. Population mean or proportion The pa- 202. It is a statistical instrument consisting of
rameter must be identified before analy- a series of questions for the purpose of
sis? gathering information from respondents
(A) Statistical Instruments
(A) Population
(B) Questionnaire
(B) Simple
(C) Closed-Ended Questions
(C) Parameter
(D) Open-Ended Questions
(D) All the above
203. The collection of data from every mem-
197. A subset of the population. ber of a population
(A) Statistice (A) population
(B) Sample (B) sample
(C) Population (C) census
(D) Variable (D) statistics
193. A 194. A 195. B 196. C 197. B 198. D 199. A 200. C 201. A 202. B 203. C
204. B
1.3 Statistics 177
204. Which of the following is not a feature 209. Find the probability of rolling a 7 on a
of statistics in Plural sense? single die.
(A) Aggregate of facts (A) 1/6
(B) Analysis of data (B) 7/6
(C) Affected by multiplicity of causes (C) 0
(D) Statistics are collected for a predeter- (D) 7/7
mined purpose
210. The frequency or occurrence of some-
205. Define Statistics? thing.
(A) Science of Collecting, organizing, ana- (A) Data
lyzing, interpreting Data (B) Range
(B) Science of Data (C) Frequency
(C) Collection (D) Distribution
(D) Analyzing 211. the number of values that are free to
vary after a sample statistic has been com-
206. The mean of a set of seven numbers is puted
81. If one of the numbers is discarded, the
(A) Alpha
mean of the remaining numbers is 78. The
value of discarded number is (B) Critical Values
(A) 101 (C) Degree of Freedon
(B) 100 (D) Z values
(C) 99 212. Where is Mr. Byer?
(D) 98 (A) Jamaica
(B) Florida
207. The school librarian wants to determine
how many students use the library on (C) Puerto Rico
a regular basis. What type of sampling (D) Alaska
method would she use if she chose to ran-
213. Exit polls (where the surveyor asks
domly select 20 students in the cafeteria
those who are leaving the poll booths on
during each of the three lunch periods on
election day) are a form of:
Monday.
(A) Voluntary Response
(A) Convenience Sample
(B) Convenience Sampling
(B) Simple Random Sample
(C) Simple Random Sampling
(C) Stratified Random Sample
(D) Systematic Sampling
(D) Interval Sample
214. Research Question:Does the type of
208. Statistics which is concerned with sum- gasoline put in a car effect how fast the car
marizing values to describe group charac- can drive. What is the independent vari-
teristics of the data. able?
(A) Descriptive (A) Type of gasoline
(B) Inferential (B) which car the gas is put into
(C) Parametric (C) how fast the car can drive
(D) Non Parametric (D) how much gas is put into the car
205. A 206. C 207. C 208. A 209. C 210. D 211. C 212. A 213. B 214. A 215. B
215. Eva flips a coin. If she gets heads, she 221. The average waist size for teenage
wins $4. If she gets tails, she loses $3. males is 29 inches with a standard devi-
What is her expected value of a coin flip? ation of 1.4 inch. If waist sizes are nor-
(A) $1 mally distributed, estimate the proportion
of teenagers who will have waist sizes
(B) $0.50
greater than 31 inches?
(C) -$0.50 (A) 92.4%
(D) $0 (B) 10.5%
NARAYAN CHANGDER
216. A sample that follows a rule, formula, or (C) 16%
pattern. (D) 7.6%
(A) random sample 222. Drawing conclusion and taking decission
(B) stratified sample by using statistical methods is a study of
(C) systematic sample which branch of statistics?
(A) Statistical Methods
(D) none of above
(B) Descriptive Applied Statistics
217. The sum of the percent frequencies for all (C) Correlational Applied Statistics
classes will always equal (D) Scientific Applied Statistics
(A) One 223. Referring to the middle term or mean of
(B) Number of classes the middle two terms of a series of values
(C) Number of items in the study arranged in order of magnitude.
(D) 100 (A) Mean
(B) Median
218. Find the mean of these numbers:2, 57, (C) Mode
38, 42, 6 (D) Range
(A) 29
224. This misleading tactic is frequently used
(B) 38
to make one group look better than an-
(C) 50 other.
(D) 145 (A) Omitting the baseline
(B) Manipulating the Y-Axis
219. A method to collect data where EVERY
(C) Cherry Picking Data
person is counted.
(D) Using The Wrong Graph
(A) Sample Survey
(B) Census 225. A census is a statistical study in which
an entire population is counted, not just a
(C) Population
sample. Which of the following stats is
(D) none of above most likely to be based on a census?
(A) The mean number of stars in visible
220. It is a collection of information that can
galaxies
be classified into groups.
(B) The average SAT Score for a high
(A) Categorical data set
school
(B) Numerical data set (C) The number of jobless adults in a
(C) Statistics country
(D) Statistical question (D) The average wind speed of a tornado
216. C 217. D 218. A 219. B 220. A 221. D 222. D 223. B 224. A 225. C
1.3 Statistics 179
226. Determine if the sample is random or not (A) Categorical data set
random samples:Mr. Thomas chooses the (B) Numerical data set
first seven students to raise their hands in
his math class to participate in a survey (C) Statistics
(A) random sample (D) Statistical question
(B) unbiased sample
232. Inferential Statistics help us to
(C) biased sample
(A) Analysis infers properties of a popula-
(D) population sample tion
227. Knowing that the total of a certain sur- (B) Make statistical inferences from a
veyed population is 25. The central angle sample
of a value whose frequency 5 is: (C) Make generalizations
(A) 20◦ (D) Help make subjective decisions
(B) 72◦
(C) 90◦ 233. A librarian wants to know what genres
(D) 105◦ of books are most popular. He looks up
the top 100 checked out books in the li-
228. A research team surveys 200 high brary’s computer system.
schoolers at glenoak. They find that 57% (A) Survey
of them drive to school every day. What
is the margin of error? (B) Observational Study
(A) 95% (C) Experiment
(B) 14% (D) none of above
(C) 7%
234. Economics is an art because
(D) 3%
(A) it gives practical application of scien-
229. What is a smaller, representative group tific principles
drawn from a population? (B) it makes it easier to understand eco-
(A) unit nomic conditions
(B) sample (C) its laws can be tested in controlled
(C) parameter conditions
(D) statistic (D) None of the above
230. To find the you add up all the num- 235. What does it mean for a graph of data
bers and then divide by how many num- to be SKEWED LEFT?
bers you have.
(A) Most of the data is grouped to the left
(A) Mean side
(B) Median
(B) Most of the data is grouped to the
(C) Mode right side
(D) Range
(C) Most of the data is in the middle (draw
231. What do we call a question that can be a line down the middle and both sides look
answered by gathering and analyzing in- the same)
formation? (D) none of above
226. C 227. B 228. C 229. B 230. A 231. D 232. A 232. B 232. C 233. B 234. A
235. B 236. D
236. The graphical representation of a cumu- 242. Which of the following variables is most
lative frequency distribution is called likely to be used as categorical?
(A) Bar graph (A) length of a garden hose
(B) Histogram (B) recorded rainfall for a day
(C) Frequency polygon (C) flower color
(D) Ogive (D) weight of books on a shelf
237. Which of the following best describes the 243. expresses the way in which the value of
NARAYAN CHANGDER
process of finding the interquartile range a parameter may deviate from that speci-
for a set of data? fied in the null hypothesis, and is assumed
(A) Add the biggest and smallest num- true when the experimental evidence sug-
bers. gests that the null hypothesis is false.
(B) Place the numbers in order from least (A) Alternative hypothesis (H1)
to greatest and find the middle.
(B) Null hypothesis (Ho)
(C) Find the difference between the max-
(C) Type ll error
imum and the minimum.
(D) Subtract Q1 from Q3. (D) none of above
238. What is the Mode? 22, 7, 22, 1, 7, 18, 244. Which answer shows numerical data?
18, 16, 6, 6, 7 (A) Favorite animal
(A) 7 (B) Hours of sleep last night
(B) 18 (C) Hair color
(C) 21 (D) Elementary school you attended
(D) 6
245. Source of bias that occurs when you ask
239. Which of the following is NOT a charac- people who are EASY to ask
teristic of statistics under plural sense (A) Response Bias
(A) Statistics are aggregate of facts (B) Convenience Sampling
(B) Statistics are numerically expressed (C) Nonresponse
(C) Statistics are collected for a predeter-
(D) Voluntary Response
mined purpose
(D) None of these 246. The word Statistics was used first in
240. Find the median of the data set9, 8, 7, (A) 1749
11, 7, 16, 3 (B) 1851
(A) 8 (C) 1849
(B) 7 (D) 1790
(C) 3
247. Which of the following are qualitative
(D) 2 data
241. Statistics in plural sense means (A) People’s heights
(A) Statistical methods (B) People’s home town
(B) Descriptive statistics (C) The distance people travel to
(C) Quantitative data work/school
(D) Qualitative data (D) none of above
237. D 238. A 239. D 240. A 241. C 242. C 243. A 244. B 245. B 246. A 247. B
248. D
1.3 Statistics 181
248. What makes a question statistical? (C) Random Sample

(A) Population (D) Quartile
(B) Measurability 254. In a single throw of two fair dice, what
(C) Variability is the probability that the sum of two dice
(D) All of the above will be 7, given that the two dice have the
same outcome?
249. “The majority of U.S. car owners still (A) 0%
buy American cars.” Ideally, what would
(B) 25%
the sample be in the study that generated
this stat? (C) 50%
(A) Everyone in the United States who (D) 75%
owns a car 255. A school randomly chose ten English
(B) Everyone in the United States who teachers and asked them which type of
owns an American car juice their students would prefer. Which
(C) A randomly selected group of car own- reason best shows why this sample is bi-
ers in the U.S. ased?
(D) A randomly selected group of Ameri- (A) The sample didn’t include students.
cans who own American cars (B) The sample is too small.
(C) The sample can only be accurate if
250. the process of determining parameter each teacher is included in the sample
values
(D) none of above
(A) Estimation
(B) Estimate 256. Which among the following divides the
data in two different category
(C) Estimator
(A) Ordinal Scale
(D) none of above
(B) Nominal Scale
251. Underestimated the parameter (C) Interval Scale
(A) Biased Estimate (D) Ratio Scale
(B) Positive Bias 257. An infinite population is one that
(C) Unbiased Estimate (A) can be physically listed
(D) Negative Bias (B) the membership in the population is
unlimited
252. A way to describe the shape of a data
display that indicates most of the data is (C) ends abruptly due to artificial inter-
on one side of the display. vention, such as treating with an antibiotic
(D) ends abruptly due to natural causes,
(A) symmetric
such as a flood or the ice age
(B) unimodal
(C) skewed 258. Identify the population and the sam-
ple:The average annual salary for 35 of a
(D) bimodal
company’s 1200 accountants is $68, 000.
253. is the entire group of objects or indi- (A) Population:1200 Sample:$68, 000
viduals considered for a survey. (B) Population:35Sample:1200
(A) Sample (C) Population:1200Sample:35
(B) Population (D) Population:$68, 000Sample:1200
249. C 250. A 251. D 252. C 253. B 254. A 255. A 256. B 257. B 258. C 259. A
259. Which of the following data is continu- 265. What is a quantitative variable that
ous? could have an infinite number of values?
(A) The weight of a person (A) categorical variable
(B) Books sold every month on Amazon (B) qualitative variable
(C) Employees working in a store (C) discrete variable
(D) none of above (D) continuous variable
260. What is the probability of flipping a coin 266. The important sources of secondary data
NARAYAN CHANGDER
and getting heads? in India are
(A) 1/2 (A) Census
(B) 1/3 (B) NSSO
(C) 1/4 (C) Both
(D) Never, Tails never fails. (D) None of these
261. probability distribution that is used to es- 267. Population is

timate population parameters when sam- (A) It is a subset of selected members of
ple size is small and/or the population a population
variance is unknown (B) It is the complete set of all the ele-
(A) Z-Distribution ments that will be studied
(B) T-Distribution (C) It is the variable that describes some
characteristics
(C) Z-Table
(D) It is a numerical characteristic
(D) T-Table
268. Research question:does the distance a
262. If the scores are approximated to its
person kicks a soccer ball effect how well
nearest whole number, it is said to be as
they will do on their math test. What is
(A) Single sample the dependent variable?
(B) Single score (A) How far they kick the soccer ball
(C) Single group (B) who the person is
(D) Raw Score (C) how well they do on the math test
263. Mrs. Trahan samples her class by select- (D) Type of soccer ball.
ing 5 girls and 7 boys. This type of sam- 269. In its singular sense, Statistics means
pling is called?
(A) Aggregate of numbers
(A) Stratified (B) Numerically expressed data
(B) Systematic (C) Statistical methods
(C) Simple (D) None of these
(D) Cluster
270. Which level of measurement does not
264. solve to find the equivalent fraction.1/3 provide a numerical result for each partici-
= x/6 pant.
(A) 1/6 (A) Nominal data
(B) 3/6 (B) Ordinal data
(C) 2/6 (C) Interval data
(D) none of above (D) none of above
260. A 261. B 261. D 262. B 263. A 264. C 265. D 266. C 267. B 268. C 269. C
270. A 271. C
1.3 Statistics 183
271. The empirical relationship among mean, 277. Spread is the , or difference, between
median and mode is least and greatest values.
(A) Mode = 3 mean-2 median (A) Mean
(B) Mode = 2 median-2mean (B) Median
(C) Mode = 3 median-2 mean (C) Mode
(D) Range
(D) Mode =4 median-3 mean
278. In which of the following scale the value
272. , 7-What is the mode? of ‘0’ has meaning
(A) 1 (A) Interval Scale
(B) 2 (B) Ratio Scale
(C) 3 (C) Nominal Scale
(D) 7 (D) Ordinal Scale
273. Which of the following variables is most 279. It is the branch of applied mathematics
likely to be used as quantitative? dealing with data collection, organization,
analysis, interpretation and presentation.
(A) ZIP code
(A) Problem-Solving
(B) Google Drive capacity
(B) Trigonometry
(C) country of birth (C) Statistics
(D) car manufacturer (D) Geometry
274. Which is an example of ratio scale? 280. Activities undertaken to earn a living are
(A) time known as
(B) gender (A) Non-Economic activities
(B) Economic activities
(C) grades
(C) Both of these
(D) all of these
(D) None of these
275. It is a question that gives a survey re-
281. Find the interquartile range using the 5
sponses limited and narrow to the given
number summary.Minimum:2Q1:3.5Median:6Q3:10.5Maxim
options.
(A) 7
(A) Closed-Ended Questions
(B) 10
(B) Open-Ended Questions
(C) 4.5
(C) Questionnaire (D) 8.5
(D) Statistical Instruments
282. Calculate the median, mean, mode and
276. Interview the first 30 students who en- range for each of these data sets:11, 4, 4,
ter the school in the morning. 6, 7, 2, 9, 12, 13, 4Round your answers
to one decimal place where necessary.
(A) simple random
(A) Median = 6.5; Mean = 7.2Mode =
(B) population 4; Range = 11
(C) systematic (B) Mean = 4; Mean = 11Mode = 4;
(D) convenience Range = 6.5
272. B 273. B 274. C 275. A 276. D 277. D 278. A 279. C 280. B 281. A 282. A
283. B
(C) Mean = 6.5; Mean = 2.7Mode = 4; (B) Obtain data and then organize, sum-
Range = 4 marize, present, analyze, interpret and
(D) Mean = 4; Mean = 11Mode = 4; reach conclusions
Range = 11 (C) obtain data and then organize, sum-
marize, present and analyze
283. A gaming website wanted to find out
which console its visitors owned.Which (D) It is a set of methods to plan studies
choice best represents the population? and experiments
NARAYAN CHANGDER
(A) Visitors to the 3DS section.
288. Locate the number that shows up the
(B) All of the website visitors. most.
(C) Visitors to the PS4 section. (A) Finding the mode
(D) Visitors who are on the website for
(B) Finding the mean
more than 5 minutes.
(C) Finding the median
284. Who is known as the father of Statis- (D) Finding the range
tics?
(A) Laplace 289. Will conducting this survey introduce
(B) Gottfried Achenwall bias? Surveying parents of Year 8 stu-
(C) D Molvere dents to find out how many children the
average adult has.
(D) Guass
(A) Yes, because the survey was con-
285. a ratio or fraction of the sample orpop- ducted with only parents of Year 8s.
ulation that has a specific characteristicof (B) Yes, because the survey was con-
interest ducted only with adults.
(A) Proportion
(C) Yes, because parents are able to opt
(B) Z values out and not complete the survey.
(C) Alpha (D) No, there is no bias.
(D) Critical Values
290. Your test grades are 72, 83, 78, 85, and
286. A mayor wanted to see if the people in
90. You have one more test and want an
his town thought he was doing a good
average of an 82. What must you earn on
job.Which choice best represents a statis-
your next test?
tic?
(A) 84
(A) The percentage of all townspeople
who believe the mayor is doing a good job. (B) 82
(B) The percentage of townspeople sur- (C) 100
veyed who believe the mayor is doing a (D) 81
good job.
(C) All townspeople. 291. Statistics is defined in terms of numerical
(D) A random selection of 100 townspeo- data in the
ple. (A) Singular sense
287. Statistics help us to (B) Plural sense

(A) Obtain data and then organize and (C) Either a or b
analyse (D) Both a and b
284. B 285. A 286. B 287. B 288. A 289. A 290. A 291. B 292. C

1.3 Statistics 185
292. If you were conducting a survey, in what 297. The independent variable is also known
order would you perform the following as
tasks? A) analysis; B) observation; C) (A) outcome variable
sample; D) statistic
(B) explanatory variable
(A) B A C D
(C) control variable
(B) C B D A
(D) none of above
(C) C B A D
(D) A C B D 298. How many parts are there to a box-and-
whisker-plot?
293. It is a graph that uses symbols to present (A) 2
and compare data. These graphs are of-
(B) 5
ten used where there are people who need
to understand things, even if they do not (C) 3
read or speak the language. (D) 4
(A) Bar Graph
299. A toy store owner is tracking how much
(B) Line Graph kids spend each month on toys.Which
(C) Pie Graph choice best represents a population?
(D) Pictograph (A) All of the kids who buy toys.
(B) 227 rich kids.
294. What is the RANGE of a data set?
(C) 228 boys age 7-15.
(A) The middle value
(D) 235 kids from age 10 to 15.
(B) The number that occurs most fre-
quently 300. What is a census?
(C) The average (A) A tool used to collect statistical data
(D) The difference between the max and (B) Statistics collected from an entire
min values population
295. A frequency distribution is (C) The factual information collected
from a survey or other source
(A) a tabular summary of a set of data
showing the relative frequency. (D) A group chosen from a population
(B) a graphical form of representing 301. A P-value indicates:
data.
(A) the probability that the null hypothe-
(C) a tabular summary of a set of data sis is true
showing the frequency of items in each of
(B) the probability that the alternative hy-
several nonoverlapping classes.
pothesis is true
(D) a graphical device for presenting cat-
(C) the probability of obtaining the re-
egorical data.
sults (or one more extreme) if the null hy-
296. Applied statistics can be pothesis is true
(A) Descriptive (D) probability of a Type I error
(B) Scientific 302. Data is
(C) Both Desctiptive & Scientific (A) a planned activity whose results yield
(D) None of these a set of data
293. D 294. D 295. C 296. C 297. B 298. B 299. A 300. B 301. C 302. C
(B) a numerical value that summarizes all 308. What is the median of:6, 12, 16, 11, 8,
of the data of an entire population 4, 1, 11, 4
(C) the set of values collected from the (A) 11
variable from each of the elements that (B) 6
belong to the sample (C) 8
(D) A numerical value summarizing the (D) 7
sample data
309. To find the you put all numbers in or-
NARAYAN CHANGDER
303. Find the median from the list of num- der from least to greatest and then take
bers:60, 58, 52, 48, 60, 67 the largest number minus the smallest
(A) 58 number .
(B) 59 (A) Mean
(C) 60 (B) Median
(D) 118 (C) Mode
(D) Range
304. Example of quantitative data ..
(A) color of eyes 310. A survey that chose every nth person
from a list to answer the questions.
(B) numbers of chairs
(A) Satistics
(C) types of glasses
(B) Population
(D) marital status
(C) Census
305. overestimated the parameter (D) Random Sample
(A) Biased Estimate
311. Identify the population:A survey of 500
(B) Positive Bias adults in the U.S. found that 54% drink
(C) Unbiased Estimate coffee daily.
(D) Negative Bias (A) Collection of the 500 adults surveyed
(B) Collection of all adults in the U.S.
306. A number line showing the frequency of
(C) 54%
data by marking an X on the umber line for
each occurrence. (D) 500
(A) Mode 312. Primary data..
(B) Measure of Center (A) second hand data
(C) Box Plot (B) first hand information
(D) Line Plot (C) data from other parties
(D) annual report
307. It is a process that aims to describe
an observable event by using any instru- 313. What is the mode in the set of data? 2,
ments or devices. 2, 2, 4, 4, 5, 6, 6, 6, 7
(A) Questionnaire (A) 2
(B) Statistical Instruments (B) 6
(C) Open-Ended Questions (C) 2 and 6
(D) Close-Ended Questions (D) 2, 4, and 6
303. B 304. B 305. B 306. D 307. B 308. C 309. D 310. D 311. B 312. B 313. C
314. C
1.3 Statistics 187
314. Qualitative observations that fall into 320. Descriptive statistics is used to
separate and distinct categories. (A) Describe the Characteristics of sam-
(A) Numerical Data ple
(B) Data (B) Predict the association between the
(C) Categorical Data variables
(D) Measure of Center (C) Generalized the results
(D) Compare the groups
315. What is data?
321. Which one is NOT refer to inferential
(A) The practise of collecting and
statistics
analysing data
(A) methods to find out something about
(B) The factual information collected
population
(B) also called inductive statistics
(C) An element or feature that can vary
(C) make inferences from data to more
(D) A group chosen from a population general conditions
316. Given the following data:the following (D) used to present quantitative descrip-
data 1, 3, 5, 7, 9 tions in a manageable form
(A) the variance is 8 322. Drawing a general conclusion about a set
(B) the variance is 10 of data from a sample of the population
(C) the variance is 12.5 (A) sample
(D) the variance is 40 (B) survey
(C) population
317. Find the median of these numbers:4, 2,
(D) statistics
7, 4, 3
(A) 4 323. Which measure of central tendency best
(B) 5 represents this set of data:13, 13, 11, 13,
13, 12, 13
(C) 7
(A) Mean
(D) 10
(B) Median
318. Which types of graphs are used to show (C) Mode
changes over time? (D) Range
(A) Line and Bar
324. A variable (or response variable) is
(B) Pie and Bar
(A) a characteristic of interest about each
(C) Line and Pictograph
individual element of a population or sam-
(D) Bar and Pictograph ple
319. Probability is (B) a characteristic that is irrelevant to
the collection of the data
(A) the chance that some event will occur.
(C) a characteristic that changes when
(B) a game that involves coins. the data is collected
(C) a guarantee. (D) a characteristic or trait that will be ig-
(D) none of above nored in a sample population
315. B 316. B 317. A 318. A 319. A 320. A 321. D 322. D 323. C 324. A 325. A
326. B
325. What is normal distribution? 331. At a local high school, GPA’s are normally
(A) A symmetrical bell-shaped graph distributed with a mean of 2.9 and stan-
(B) A graph that is skewed to the right dard deviation of 0.6. What percentage
of students at the high school have a GPA
(C) A graph that is skewed to the left
between 2.3 and 3.5?
(D) none of above
(A) 68%
326. Find the probability of rolling greater (B) 99.7%
than a 1 on a single die.
NARAYAN CHANGDER
(C) 95%
(A) 6/6
(B) 5/6 (D) 84%
(C) 4/6
332. A consists of all subjects (human or
(D) 1/6 otherwise) that are being studied.
327. Which of the following is an example of (A) Population
a statistic? (B) Sample
(A) (10 x 10)15 = 115
(C) Study
(B) The average test score was 76
(D) Exam
(C) Tomorrow night there will be a full
moon
333. Data obtained from measuring
(D) It looks like there’s a good chance of
rain tonight (A) Dichotomic
(B) Discrete
328. is an assumption about the population
(C) Continuous
parameter?
(A) hypothesis (D) Polynomic
(B) hyper
334. “Noticing and recording a certain charac-
(C) Simple teristic of a group” is the definition for:
(D) Population
(A) Observation
329. The measures that help to solve an eco- (B) Bias
nomic problem are called what in eco-
(C) Survey
nomics?
(A) Economic Formule (D) Sample
(B) Economic Solution
335. What does it mean for a graph of data
(C) Economic Model to be SKEWED RIGHT?
(D) Economic Policies
(A) Most of the data is grouped to the left
330. What is the mean of the following side
data:5, 3, 4, 6, 7, 9, 19, 2, 8, 10, 5 (B) Most of the data is grouped to the
(A) 7.091 right side
(B) 6 (C) Most of the data is in the middle (draw
(C) 5 a line down the middle and both sides look
(D) 19 the same)
(E) 17 (D) none of above
327. B 328. A 329. D 330. A 331. A 332. A 333. C 334. A 335. A 336. A
1.3 Statistics 189
336. What is statistics? 342. Which of the following is a limitation of

(A) The science of collecting and statistics?
analysing data (A) Single figures are treated as statis-
(B) Statistics collected from an entire tics
population (B) It deals with quantitative data
(C) An element or feature that can vary (C) Iot does not study qualitative phenom-
(D) A group chosen from a population ena
(D) None of these
337. What are 2 branches of Statistics?
(A) Parameter and Statistics 343. What is the mode in the following num-
bers? [3, 24, 3, 7, 30, 1, 3, 7, 3]
(B) Quantitative and Categorical
(A) 3 and 7 both are modes
(C) Inferential and Descriptive
(B) 1 and 7 both are modes
(D) none of above
(C) 3 only
338. Extreme values are also known as (D) 7 only
what?
344. Identify the POPULATION in the follow-
(A) interquartile ranges
ing question:What are the ages of the stu-
(B) modes dents at Clarke Middle School?
(C) medians (A) Students
(D) outliers (B) Age
339. Each and every element of a large group (C) Clarke Middle School
of data. (D) none of above
(A) Population 345. Sales are best presented through a
(B) Sample graph.
(C) Variable (A) Line
(D) Data (B) Bar
(C) Circle
340. People who select the one measure of av-
erage that lends the most evidence to sup- (D) Picture
port their position is an example of which 346. A dog owner wants to know what sham-
type of misuse? poo is better for his dogs. He washes one
(A) Suspect Samples dog with shampoo A and one with sham-
(B) Changing the Subject poo B. He then compared their fur.
(C) Implied Connections (A) Survey
(D) Ambiguous Averages (B) Observational Study
(C) Experiment
341. If the data are labels or categories that
(D) none of above
are used to define an attribute of an ele-
ment, the scale we use is 347. Parameters describes
(A) Ordinal (A) Mean value of sample
(B) Nominal (B) Variation in the sample
(C) Interval (C) Central value of population
(D) Reason (D) None of the above
337. C 338. D 339. A 340. D 341. B 342. C 343. A 344. A 345. A 346. C 347. C
348. B
348. Find the interquartile range using the fol- 354. statistics consists of the collection,
lowing.Minimum:1Q1:3Median:5Q3:7Maximum:9 organization, summarization and presen-
(A) 8 tation of data.
(B) 4 (A) mathematical
(C) 5 (B) descriptive
(D) 10 (C) inferential
(D) population
349. Types of Statistics are:
NARAYAN CHANGDER
(A) marketing and accounting 355. “Our brand has 1/3 fewer calories”,
(B) descriptive and inferential statistic does not compare to anything, let alone
another brand is an example of which mis-
(C) primary and secondary
use?
(D) quantitative and qualitative
(A) Detached Statistics
350. Distrust of Statistics is due to: (B) Misleading Graphs
(A) Misuse of statistics (C) Changing the Subject
(B) Insufficient statistical methods (D) Ambiguous Averages
(C) Scope of statistics is limited
356. It is a numerical description of a popula-
(D) Limitations of statistics tion characteristic.
351. The correct definition for a sample is: (A) Parameter
(A) a survey which is conducted on the en- (B) People
tire population (C) Statistics
(B) a set of data taken from only part of a (D) Data
population
357. What measure represents the value in
(C) when a sample favours a certain out-
the center?
come
(A) Mode
(D) the amount surveyed
(B) Median
352. The shelf life of a particular dairy product (C) Mean
is normally distributed with a mean of 12 (D) none of above
days and a standard deviation of 3 days.
About what percent of the products last 358. A sample refers to of a population.
between 12 and 15 days? (A) a subset
(A) 68% (B) a list
(B) 34% (C) a description
(C) 16% (D) a collection
(D) 2.5%
359. What is a statistical question
353. What is the median of the following data (A) huh?
set:1, 3, 4, 5, 5, 6, 7 (B) A question that can be answered by
(A) 1 collecting data w/ variability
(B) 4 (C) A question that can be answered by
(C) 5 collecting data w/o variability
(D) 7 (D) zZzZ
349. B 350. A 351. B 352. B 353. C 354. B 355. A 356. A 357. B 358. A 359. B
360. B
1.3 Statistics 191
360. When one examines the entire popula- 366. Find the MEDIAN 77, 83, 83, 85, 87, 90,
tion instead of a subgroup of the popula- 90, 93, 94, 99, 99
tion, this is called a (A) 77
(A) Sampling (B) 99
(B) Census (C) 90
(C) Bias (D) 87
(D) none of above 367. Facts, figures, and other evidence gath-
361. What graph misleading is used in this ered through observation.
statement? “using green for losses, and (A) Range
red for profits” (B) Data
(A) Cherry Picking Data (C) Statistics
(B) Omitting the baseline (D) Information
(C) Going Against Conventions 368. Jamal said that 41 was the number in a
(D) Manipulating the Y-Axis data set that was listed the most. Which
term would define Jamal’s number?
362. What is the branch of statistics that in- (A) mean
volves drawing conclusions about a popu-
(B) median
lation based on information contained in a
sample taken from that population? (C) mode
(A) descriptive statistics (D) range
(B) inferential statistics 369. a mathematical expression or formula
(C) sports statistics usedin computing the estimate
(D) health statistics (A) Estimate
(B) Estimation
363. What shape is a normal distribution (C) Estimator
curve?
(D) none of above
(A) Half curve
(B) Round curve 370. In a standard normal curve, what is the
z value that corresponds to the proportion
(C) Bell curve
0.3413?
(D) Square curve (A) 1.0
364. Income of a family is an example of (B) 1.5
(A) Quantitative data (C) 2.0
(B) Qualitative data (D) 2.5
(C) Saving 371. On a plate of wings, there are mild and
(D) none of above hot wings. In a sample of 10 chicken
wings, 4 are hot wings. If there are 50
365. The most common graphical presentation wings on the platter, estimate how many
of quantitative data is a are hot.
(A) histogram. (A) 25/50
(B) bar chart. (B) 20/50
(C) stem and leaf display. (C) 16/50
(D) pie chart. (D) none of above
361. C 362. B 363. C 364. A 365. A 366. C 367. B 368. C 369. C 370. A 371. B
372. A
372. Which of the following are steps in sta- (B) Population

tistical problem solving? (select ALL cor- (C) Variability
rect answers.)
(D) Survey
(A) Defining the problem
(B) Collecting the data 378. Suppose the P-value for a hypothesis
(C) Analyzing the data test is 0.0304. Using a = 0.05, what is
the appropriate conclusion?
(D) Posting the data on Facebook
(A) Reject the null hypothesis
NARAYAN CHANGDER
373. Area outside the boundaries of the con- (B) Reject the alternative hypothesis
fidence interval estimate; area distributed
in both tails of the standard normal distri- (C) Fail to reject the null hypothesis
bution curve (D) Fail to reject the alternative hypothe-
(A) Condifence Level sis
(B) Z values 379. The class mark of the class 5.5-20.5 is
(C) Alpha (A) 15.5
(D) Critical Values (B) 20.5
374. Which of the following are the types of (C) 18
Probability Sampling? (D) 5
(A) Stratified Random Sampling
(B) Systematic Sampling 380. What do you call the set of all people,
objects, events, or ideas you want to in-
(C) Convenience Sampling
vestigate?
(D) Quota Sampling
(A) sample
375. A Statistics student did a research on the (B) population
time spent by Grade 12 students playing (C) data
video game. He selected the subjects by
(D) statistics
using the Table of Random Numbers. What
technique is used? 381. According to the empirical rule, how
(A) Simple Random Sampling much of the data falls within 3 standard
(B) Stratified Random Sampling deviations?
(C) Systematic Random Sampling (A) 25%
(D) Cluster Random Sampling (B) 68%
376. Which of the following is a way to collect (C) 95%
information from a group? (D) 99.7%
(A) Survey
382. the number of independent values or
(B) Large quantities that can be assigned to a sta-
(C) Population tistical distribution
(D) Random (A) Alpha
377. The whole from which the sample was (B) Critical Values
taken. (C) Degree of Freedon
(A) Range (D) Z values
372. B 372. C 373. C 374. A 374. B 375. A 376. A 377. B 378. A 379. C 380. B
381. D 382. C 383. D
1.3 Statistics 193
383. Complete the definition:A consists of (D) HP

all subjects (human or otherwise) that are (E) µ
being studied
389. Which level of measurement would in-
(A) Statistics
volve participants being assigned labels to
(B) Number put them into categories?
(C) People (A) Nominal data
(D) Population (B) Ordinal data
(E) Pueblo (C) Interval data
384. What is the MODE of a data set? (D) none of above
(A) The middle value 390. What is referred to as a subset of the
(B) The number that occurs most fre- population under investigation that a re-
quently searcher selected to be part of the study?
(C) The average (A) Sample
(D) The difference between the max and (B) Population
min values (C) Variable
(D) Replicate
385. Like a bar chart but the X axis is numer-
ical, in order. 391. The extent to which scores differ from
(A) Dot Plot one another or from their mean.
(B) Histogram (A) Variability
(C) Line Plot (B) Range
(D) Bar Graph (C) Statistics
(D) Data
386. number summaryMin:30 Q1:50Median:60
Q3:90Max:170Are there any outliers? 392. test is used to compare the means of
two groups
(A) There is a high outlier but no low out-
(A) t
lier
(B) f
(B) There is a low outlier but no high out-
lier (C) r
(C) There is both a low and high outliers (D) u
(D) There are no outliers 393. The negative standard deviations on a
normal distribution curve mean what?
387. Descriptive statistics can be represented
(A) Below average
by
(B) Above average
(A) summaries or histograms.
(C) Average
(B) essays or graphs.
(D) none of above
(C) essays or summaries.
(D) histograms or graphs. 394. In statistics, we measure a variable,
which can be defined as
388. The null hypothesis is represented by: (A) what we are measuring.
(A) Ha (B) what we are counting.
(B) Ho (C) what we are studying.
(C) t* (D) what we are categorizing.
384. B 385. B 386. A 387. D 388. B 389. A 390. A 391. A 392. A 393. A 394. C
395. Which of the following is part of the an- 401. You draw two marbles at random from a
alytic goals of studying statistics? jar that has 20 red marbles and 30 black
(A) Relationships within the group marbles without replacement. What is the
(B) Variance in the group probability that both marbles are red?
(C) Prediction (A) 0.1551
(D) All of the above (B) 0.1600
396. If a researcher wants to present the re- (C) 0.2222
NARAYAN CHANGDER
sponses of the participants if they agree (D) 0.4444
or disagree with the martial law, what are
the two appropriate graphs to use? 402. A mayor wanted to see if the people
(A) Pictograph in his town thought he was doing a food
(B) Pie Graph job.Which choice best represents a sam-
(C) Line Graph ple?
(D) Bar Graph (A) 1, 000 unemployed voters
397. A data set can have more than one (B) The mayor’s family
(A) Median (C) The residents of the town
(B) Mode (D) 242 voters
(C) Mean
(D) Midrange 403. To determine the most popular type of
cake amount all the students at your
398. Find the IQR (interquartile range) using
school, ask your entire math class.
the following information.Minimum:77Q1:79.5Median:86.5Q3:90.5Maximum:99
(A) 86.5 (A) Cluster Sample
(B) 22 (B) Simple Random Sample
(C) 90.5 (C) Stratified Random Sample
(D) 11 (D) Interval Sample
399. Refers to the collection of facts where
the researcher gets information. 404. A is a collection of numbers gathered
(A) Collection of Data to give some information.
(B) Organization of Data (A) Tally mark
(C) Analysis of Data (B) Data
(D) None of the above (C) None of these
400. Farmer Joe’s apple tree farm is set up in (D) Pictograph
100 rows. He counts the number of apples
produced on every 10th row to estimate 405. The entire group of individuals about
the number apples produced on the whole whom we hope to gain information
farm. This is sampling.
(A) Sample
(A) Simple
(B) Population
(B) Stratified
(C) Cluster (C) Bias
(D) Systematic (D) Parameter
395. D 396. A 396. B 397. B 398. D 399. A 400. D 401. A 402. D 403. A 404. B
405. B 406. C
1.3 Statistics 195
406. The city of Smyrna wants to know which 411. , 9-What is the range?
brand of paint will last longer. They paint (A) 9
2 streets with brand A and two streets
(B) 4
with brand B and checked which lasted
longer. (C) 3
(A) Survey (D) 6
(B) Observational Study 412. , 7-What is the median?

(C) Experiment (A) 2
(D) none of above (B) 4
(C) 5
407. What is the median 133, 140, 98, 98,
(D) 7
140, 119, 119.
(A) 200 413. Deals with organizing and summarizing
(B) 96 observations so that they are easier to
comprehend
(C) 119
(A) Statistics
(D) 121
(B) Descriptive Statistics
408. A parameter is (C) Inferential Statistics
(A) a planned activity whose results yield (D) Statistician
a set of data
414. Which scenario would produce the least
(B) a numerical value that summarizes all biased results?
of the data of an entire population
(A) asking athletes at a gym what their fa-
(C) the set of values collected from the vorite television show is
variable from each of the elements that (B) asking shoppers at a store where
belong to the sample their favorite place to shop is
(D) A numerical value summarizing the (C) asking fans at a baseball game who
sample data their favorite baseball team is
409. is a part of a group being surveyed. (D) asking students in a college library
what their favorite college sports team is
(A) Sample
(B) Population 415. Taos, Acoma, Zuni, and Cochiti are the
names of four Native American pueblos
(C) Random Sample
from the population of pueblos in Arizona
(D) Quartile and New Mexico. Identify the data level.
(A) Nominal
410. A collection, or set, of individuals or ob-
jects or events whose properties are to be (B) Ordinal
analyzed. (C) Interval
(A) Sample (D) Ratio
(B) Variable 416. Descriptive statistics is
(C) Statistic (A) statistical methods used to find some-
(D) Population thing about population
407. C 408. B 409. A 410. D 411. D 412. C 413. B 414. A 415. A 416. B
(B) statistical methods used to describe 421. The following grades were obtained
data that have been collected from the first exam of a english class:70
(C) statistical methods used to forecast 85 91 67 98 80. What is the standard
something under study deviation of the data?
(A) 10.94
(D) statistical methods used to estimate
something under study (B) 11.99
(C) 81.83
417. Which of the following is true regarding (D) 31
NARAYAN CHANGDER
secondary source of data? ? ?
422. A radio station in Raleigh, NC wants to
(A) It provides first hand information know the most popular song of the week.
(B) it implies collection of data from its The DJ surveys random listeners who call
original source in throughout the week. What is the pop-
(C) collection of data from sources who ulation of the DJ’s survey?
already collected the data (A) all the people in Raleigh, NC
(D) can rely on this data as compare to (B) listeners of this radio station
primary data (C) the listeners who call the station
(D) the most popular song of the week
418. An investigation of the opinions or ex-
perience of a group of people, based on a 423. In plural sense, which is not a character-
series of questions. stic of statistics?
(A) aggregate of data
(A) Statistics
(B) only expressed in words
(B) Survey (C) affected by multiplicity of causes
(C) Histogram (D) collected in a systematic manner
(D) Data
424. A teacher asks all her students five ques-
419. What is the average weekly allowance tions about their study habits.
of HUMSS-MARX student for the first (A) Survey
semester of SY 2018-2019? What is the (B) Observational Study
population of the study? (C) Experiment
(A) All HUMSS-MARX students for the (D) none of above
first semester, SY 2018-2019 425. A variable that quantifies an element of
(B) Weekly allowance of the HUMSS- a population.
MARX (A) Qualitative Variable
(C) All HUMSS-MARX students (B) Quantitative Variable
(D) All students who have allowance (C) Sample
(D) Parameter
420. The sum of the relative frequencies for
all classes will always equal 426. What is Statistics?
(A) Relevant information
(A) the sample size.
(B) Involves scientific procedures and
(B) the number of classes. methods
(C) one. (C) decision making process
(D) any value larger than one. (D) data are generated
417. C 418. B 419. A 420. C 421. A 422. B 423. B 424. A 425. B 426. B 427. B
1.3 Statistics 197
427. Calculate the interquartile range of the (A) Convenience Sample only
following data17, 18, 18, 19, 20, 21, 21, (B) Simple Random Sample
23, 25
(A) 3 (C) Stratified Random Sample
(B) 4 (D) Systematic Sample
(C) 5
433. For a certain distribution, mode and me-
(D) 8
dian were found to be 100 and 1250 re-
428. Facts, or a set of information or observa- spectively. Find mean for this distribution
tion under study using an empirical relation
(A) Constant (A) 1375
(B) Data (B) 1265
(C) Sample
(C) 1145
(D) Variable
(D) 1550
429. A school principal wants to see which
subject the 695 students in his school liked 434. The school librarian wants to determine
best. Which choice BEST represents a sam- how many students use the library on
ple? a regular basis. What type of sampling
(A) The girls in the school. method would she use if she chose to use
(B) 1 classroom for each grade a random number generator to randomly
(C) All the students in the school. select 50 students from the school’s atten-
dance roster.
(D) The students making a B in math.
430. Why is statistical study important?
(B) Simple Random Sample
(A) To solve problem
(B) Help to investigate relationship be- (C) Stratified Random Sample
tween variables (D) Interval Sample
(C) Help in making wise decision
(D) To provide solution/option for prob- 435. Which of these is a statistical question?
lem based on proper statistical study (A) What is your name?
431. Which is the root of all economic prob- (B) What is your address?
lems? (C) Did you read today’s newspaper?
(A) Unemployment
(D) How old are the students in your
(B) Scarcity class?
(C) Abundance
(D) Inflation 436. Which of the following is an example of
qualitative data
432. The school librarian wants to determine
how many students use the library on (A) number of vegetarian students
a regular basis. What type of sampling (B) number of illiterate people in India
method would she use if she chose to se-
lect every 3rd student who enters the li- (C) everyday temperature
brary on Tuesday. (D) appreciation of art
428. B 429. B 430. B 430. C 430. D 431. B 432. D 433. A 434. B 435. D 436. D
437. D
437. A poll was conducted in which 1000 442. The relative frequency of a class is com-
adults were asked if they prefer bottled puted by
water or tap water, and 57% of them said (A) dividing the midpoint of the class by
they prefer bottled water. In this scenario, the sample size.
the 57% is a
(B) dividing the frequency of the class by
(A) population the midpoint.
(B) sample (C) dividing the sample size by the fre-
(C) parameter quency of the class.
NARAYAN CHANGDER
(D) statistic (D) dividing the frequency of the class by
the sample size.
438. is the science of collecting, organiz-
ing, analyzing, and interpreting data in or- 443. Farmer Joe separates his apple tree farm
der to make decisions. into 10 regions. He counts the number of
(A) Statistics apples produced in just one of the regions
(B) Data and uses that estimate to predict the num-
ber of apples produced on the whole farm.
(C) Population
This is sampling.
(D) Sample
(A) Simple
439. The best defense against bias in which (B) Cluster
every individual is given a fair chance of (C) Stratified
being selected
(D) Systematic
(A) Population
(B) Sampling 444. The Statistics is concerned with:
(C) Survey (A) aggregate of numerical facts
(D) Randomization (B) aggregate of disorganised facts
(C) aggregate of qualitative facts
440. A Type I error is when:
(D) aggregate of heterogeneous facts
(A) We reject the null hypothesis when it
is actually true 445. What type of data will questions an-
(B) We obtain the wrong test statistic swerable by YES or NO generate?
(C) We fail to reject the null hypothesis (A) Categorical data
when it’s actually false
(B) Numerical data set
(D) We reject the alternate hypothesis
(C) Statistics
when it’s actually true
(D) Statistical question
441. In statistics, a sample:
(A) Can be used for inferences but not for 446. It is a numerical description of a sample
predictions. characteristic
(B) Is another word for population. (A) Statistic

(C) Is a set of data taken from the popu- (B) Statistics
lation to represent the population. (C) Parameter
(D) Is only used in descriptive statistics. (D) Data
438. A 439. D 440. A 441. C 442. D 443. B 444. A 445. A 446. A 447. C
1.3 Statistics 199
447. the measure of closeness of the esti- 453. Before a nation wide election, a polling
mates to each other place was trying to see who would
(A) Accuracy win.Which choice best represents the
(B) Point Estimate statistic?
(A) A selection of voters over age 50.
(C) Precision
(B) All voters.
(D) Interval Estimate
(C) The percentage of voters in favor of
448. What refers to any procedure done to se- the candidate.
lect samples? (D) 53% of the selection of voters support
(A) Experimentation the candidate.
(B) Replication
454. A variable that categorizes or describes
(C) Sampling an element of a population.
(D) Treatment (A) Qualitative Variable
449. Seth said that 17 was the number that (B) Quantitative Variable
showed the difference between the lowest (C) Parameter
and highest numbers in a data set. Which (D) Sample
term would define Seth’s number?
(A) mean 455. This occurs when a sample is collected in
such a way that some members of the in-
(B) median
tended population are less likely to be in-
(C) mode cluded than others.
(D) range (A) sampling error
450. In the data set below, what is the mean (B) sampling bias
absolute deviation? 6, 5, 7, 2, 4, 8 (C) random sampling
(A) 1.70 (D) clustered sampling
(B) 1.71 456. This Part of the survey asks the respon-
(C) 1.72 dent certain important personal details.
(D) 1.73 (A) Introduction
451. What measure represents the value that (B) Profile of the Respondent
repeats the most (C) Questions to Answer
(A) Mode (D) none of above
(B) Median 457. The area under the normal curve is
(C) Mean (A) 0.99
(D) none of above (B) 0.5
452. Which measure of central tendency best (C) 0.95
represents this set of data:3, 4, 5, 4, 5 (D) 1
(A) Mean
458. To find the you put all the numbers in
(B) Median order from least to greatest and then see
(C) Mode which number you have the most of.
(D) Range (A) Mean
448. C 449. D 450. B 451. A 452. A 453. D 454. A 455. B 456. B 457. D 458. C
459. A
(B) Median 464. , 7-What is the range

(C) Mode (A) 4
(D) Range (B) 7
(C) 3
459. It involves describing the data using sta-
(D) 6
tistical methods and procedures.
(A) analysis 465. An experiment is
(B) interpretation (A) a planned activity whose results yield
NARAYAN CHANGDER
(C) collection a set of data
(D) organization (B) a numerical value that summarizes all
of the data of an entire population
460. The nature of statistics is: (C) the set of values collected from the
(A) Science variable from each of the elements that
(B) Art belong to the sample
(C) both (a) and (b) (D) A numerical value summarizing the
sample data
(D) none of them
466. Which among the following is not part of
461. When finding median and the middle has
measure of central tendency
two numbers instead of one, what do you
do? (A) Mean
(A) Take the higher number (B) Median
(C) Mode
(B) Take the lower number
(D) Range
(C) Take both
(D) Take the mean of the two 467. Mark Twain called statistics pliable, be-
cause you can adapt them to support any
462. A survey is one that encompasses er- point. What does “pliable” mean?
rors caused by the design of the survey
(A) Flexible
and its questions.
(B) Trustworthy
(A) good
(C) Useful
(B) biased
(D) Rigid
(C) fun
(D) school 468. That part of the population from which
information is collected.
463. Choose the correct examples of discrete (A) Constant
variable.
(B) Population
(A) A film critic’s rating of a film (0-4
(C) Sample
stars)
(D) Variable
(B) Time taken to commute to work
(C) The sum of the numbers rolled on a 469. Careful use of statistical methods does
pair of dice not include
(D) Winning ticket number drawn from a (A) carefully defining the situation
raffle (B) gathering data
(E) Amount of gasoline a car (C) summarizing the data accurately
460. C 461. D 462. B 463. A 463. C 463. D 464. C 465. A 466. D 467. A 468. C
469. E 470. B
1.3 Statistics 201
(D) deriving and communicating meaning- 476. Identify the outlier (what number
ful conclusions doesn’t belong) for the given data? 23,
(E) throwing out data that does not fit the 34, 27, 7, 30, 26, 28, 31, 34
graph (A) 7
470. Statistics in singular sense means (B) 23
(A) Statistical data (C) 31
(B) Statistical procedure (D) 34
(C) statistical laws
477. Measure of dispersion is used to deter-
(D) None of these
mine
471. µ means in statistics (A) A common value of the distribution
(A) sample mean (B) Variability in the distribution
(B) population mean (C) Significance difference
(C) sample s.d
(D) Relationship between the variables
(D) population s.d
478. Which of these shapes is the symmetrical
472. A quantitative variable that can assume
and bell-shaped distribution of a random
a countable number of values.
variable?
(A) Nominal Variable
(A) Circle
(B) Ordinal Variable
(C) Discrete Variable (B) pie graph
(D) Continuous Variable (C) normal curve
(D) line graph
473. A value that describes how data is cen-
tered. 479. In a certain community, 30% of house-
(A) Data holds have 1 child, 43% have 2 children,
(B) Measure of Center and 27% have 3 children. If a house-
(C) Median hold is selected at random, what is the
expected number of children in that house-
(D) Statistics
hold? HINT:It may be helpful to make a
474. To find the average of a set of numbers, probability distribution table.
add up all the items and divide by (A) 2.00
(A) 2 (B) 2.13
(B) The minimum (C) 1.97
(C) The maximum
(D) 1.27
(D) The number of items
480. If the entire population is surveyed, the
475. What are characteristics that are defined
type of survey is a/an:
by a number, such as age or weight?
(A) descriptive statistics (A) Stratified Sampling
(B) inferential statistics (B) Random Sampling
(C) categorical variables (C) Population Sampling
(D) numerical variables (D) Census
471. B 472. C 473. B 474. D 475. D 476. A 477. B 478. C 479. C 480. D 481. C
481. What percentage of scores falls within 3 (C) the average of the data is 5.5
standard deviations of the mean? (D) the average of the data is 55
(A) 68%
487. Temperature can be classified into this
(B) 34%
level of measurement.
(C) 99.7%
(A) interval
(D) 95%
(B) ratio
482. A school principal wants to see which (C) nominal
NARAYAN CHANGDER
subject the 845 students in his school liked (D) ordinal
best.Which choice best represents a pa-
rameter? 488. The mean of a, b, c, d and e is 28. If the
(A) 700 of the 845 students prefer math. mean of a, c and e is 24, then mean of b
and d is
(B) 100 of the 120 students surveyed pre-
fer math. (A) 24
(C) 845 students (B) 36
(D) 120 students surveyed (C) 26
(D) 34
483. What is a population?
(A) A tool used to collect statistical data 489. Statistics in singular sense includes
(B) Statistics collected from an entire (A) Collection of data
population (B) Organisation of data
(C) All the people or objects on which (C) Analysis of data
data is collected (D) All of these
(D) A group chosen from a population
490. It occurs when data are obtained erro-
484. If every individual in a population has neously or samples are biased.
the same chance of being included in a sam- (A) non-random sampling
ple, the sample is a(n) sample. (B) convenience sampling
(A) Biased Sample (C) non-sampling error
(B) Convenience Sample (D) sampling error.
(C) Random Sample
491. Process of extracting relevant informa-
(D) Stratified Sample tion from a set of data.
485. The most frequently occurring score(s) in (A) Analysis of Data
a distribution. (B) Collection of Data
(A) Range (C) Interpretation of Data
(B) Mean (D) Non Parametric
(C) Median
492. is a person who buys goods and ser-
(D) Mode vices for the satisfaction of his/her wants
486. Given the following data:1, 2, 3, 4, 5, 6, (A) Producer
7, 8, 9, 10 (B) Service provider
(A) the average of the data is 5 (C) Service holder
(B) the average of the data is 6 (D) Consumer
482. A 483. C 484. C 485. D 486. C 487. A 488. D 489. D 490. C 491. A 492. D
493. C
1.3 Statistics 203
493. the measure of closeness of the esti- (A) Descriptive

mates to the actual value (B) Inferential
(A) Precision (C) Parametric
(B) Interval estimate (D) Non Parametric
(C) Accuracy
499. A group of subjects selected from a pop-
(D) Point Estimate ulation is a
494. It is the science of collecting, organiz- (A) Portion
ing, interpreting, and analyzing data. It (B) Sample
is very important because it has many ap- (C) Group
plications in the society. (D) Data
(A) Biology
(B) Statistics 500. What is the probability of getting the
number 1 in a fair dice?
(C) Mathematics
(A) 1/6
(D) none of above
(B) 1/3
495. What does “mode” mean? (C) 1/2
(A) average (D) 2/3
(B) middle
501. A characteristic about each individual el-
(C) repeats the most ement of a population or sample.
(D) variation (A) Variable
496. Identify the sampling technique (B) Statistic
used:Students are classified according to (C) Sample
major. Twenty students are selected from (D) Population
each major and asked how often they use
the library. 502. Statistics as a singular noun means:
(A) Random sample (A) Statistical data
(B) Stratified sample (B) Statistical methods
(C) Inductive statistics
(C) Cluster sample
(D) Descriptive statistics
(D) Systematic sample
503. What is the Median? 8, 13, 2, 4, 48
497. Units of the population are grouped; one
or more groups are selected at random. All (A) 8
units of that group are included in the sam- (B) 48
ple. (C) 2
(A) cluster sample (D) 9
(B) simple random
504. Quantitative variables are separated
(C) stratified into
(D) proportional (A) ordinal and nominal.
498. Statistics which is concerned with a (B) discrete and continuous.
higher order of critical thinking and judg- (C) discrete and nominal.
ment. (D) ordinal and continuous.
494. B 495. C 496. B 497. A 498. B 499. B 500. A 501. A 502. B 503. A 504. B
505. To find out what the preferred ice cream 510. Part of the entire group being surveyed.
flavor is, wait outside an ice cream parlor (A) random sample
and ask every 4th person leaving the store (B) biased sample
to name his or her favorite flavor until you
(C) sample
get 25 responses is an example of
(D) population
(B) Simple Random Sample 511. What is another name for average
(C) Stratified Random Sample (A) Mean
NARAYAN CHANGDER
(D) Systematic Sample (B) Median
(C) Range
506. Ana wants to know the average stu- (D) Q1/Q3
dent’s opinion of the tardy policy at her
school. Which group of students should 512. How do you find the range?
she survey in order to achieve the most (A) order least to greatest, then slash
accurate results? from each side until you reach the middle
(A) thirty students who are often tardy (B) add the numbers in your data set,
(B) thirty students who are rarely tardy then divide by the amount you added
(C) look for the number that repeats the
(C) thirty of her friends
most
(D) thirty randomly selected students
(D) highest number minus the lowest
from her school
number
507. Basic economic activities 513. Which economist is known as the “Fa-
(A) Production ther of modern economics”?
(B) Consumption (A) Alfred Marshall
(C) Distribution (B) Adam Smith
(D) all of these (C) Samuelson
(D) Karl Marx
508. Kim surveys 100 moviegoers that en-
tered the movie theater in the first hour. 514. an assertion that a parameter in a statis-
What type of sampling method is this? tical model takes a particular value, and is
assumed true until experimental evidence
(A) Random suggest otherwise?
(B) Convenience (A) Alternative hypothesis (H1)
(C) Biased (B) Null hypothesis (Ho)
(D) Self-Selected (C) Type 1 error
(D) none of above
509. Who expressed the View that “Eco-
nomics is neutral between ends”? 515. A landscaper needed some rope and cut it
(A) Robbins into the different lengths shown here. 14
in., 12 in., 10 in., 11 in., 10 in., 11 in., 11
(B) Marshall in., 12 in., and 11 in. What is the mode of
(C) Pigou the lengths of rope?
(D) Adam Smith (A) 10 in.
505. D 506. D 507. D 508. B 509. A 510. C 511. A 512. D 513. B 514. B 515. B
516. D
1.3 Statistics 205
(B) 11 in. 521. This is a sampling technique where sam-

(C) 12 in. ples are selected by dividing the popula-
tion into groups then taking samples into
(D) 13 in.
groups.
516. Classify.The numbers of cheeseburgers a (A) random
fast-food restaurant serves each day (B) stratified
(A) None of these (C) systematic
(B) Abstract (D) cluster
(C) Continuous 522. What do you call the graph which uses
(D) Discrete horizontal or vertical bars to represent
data?
517. The manager of a bookstore surveys peo-
(A) Bar Graph
ple who buy mystery novels to see if the
store should expand its hours. What is the (B) Line Graph
population? (C) Pictograph
(A) People who visit the bookstore. (D) Pie graph
(B) People who buy mystery novels. 523. This is a misuse of statistics where a
(C) Residents of the town claim was used but no comparison is made.
(D) People who like to read. (A) misleading graphs
(B) implied connections
518. weight (in grams) of tomatoes at a gro-
(C) detached statistics
cery store is what type of variable?
(D) changing the subject
(A) Qualitative/ categorical
(B) Quantitative/Numeric 524. The data shows the test scores of four
(C) Quantitative and discrete different classes.Algebra:{87, 91, 64, 88,
74}Geometry:{98, 86, 84, 91, 79}Statis-
(D) Quantitative and continuous
tics:{87, 72, 84, 88, 91}Pre-Algebra:{63,
82, 78, 71, 74}Which class had the small-
519. corresponding z-values of the confidence
est interquartile range?
level
(A) Algebra
(A) Condifence Level
(B) Geometry
(B) Z values
(C) Statistics
(C) Alpha
(D) Pre-Algebra
(D) Critical Values
525. A teacher has been told that students
520. They are quantitative data that are char- like when they do activities that get them
acterized by not having negative numerical moving. She asks her students what they
values think?
(A) Ordinal Scale (A) Survey
(B) Interval Scale (B) Observational Study
(C) Reason Scale (C) Experiment
(D) Nominal Scale (D) none of above
517. A 518. D 519. D 520. C 521. D 522. A 523. C 524. C 525. A 526. A
526. A value that is much higher or much 532. Statistics is used by

lower than the other values in a set of (A) Government
data. (B) Businessmen
(A) Outlier (C) Economists
(B) Box Plot (D) All the above
(C) Range
533. What is a sample?
(D) Histogram
(A) A tool used to collect statistical data
NARAYAN CHANGDER
527. What measure represent the average (B) Statistics collected from an entire
(A) Mode population
(B) Median (C) The factual information collected
(C) Mean
(D) A subgroup chosen from a population
(D) none of above
534. First quartile is also known as
528. The number of hours you spent studying (A) Lower quartile
each day during the past week
(B) Upper quartile
(A) Nominal
(C) Median
(B) Ordinal (D) Geometric Mean
(C) Interval
(D) Ratio 535. What does a quartile mean?
(A) One fourth of the data.
529. Regarding spendature, and increase of (B) One half of the data.
3% sounds a lot better than $6, 000, 000 (C) Some data only.
when an increase is not favorbale is an ex- (D) All of the data.
ample of which misuse?
(A) Ambiguous Averages 536. Data obtained from counting
(B) Misleading Graphs (A) Dichotomic
(C) Changing the Subject (B) Discrete
(D) Suspect Samples (C) Continuous
(D) Polynomic
530. In order to use samples to estimate
something from the population, the sam- 537. Brian has an aquarium with eleven fish.
ple should be the population. The lengths of the fish in centimeters are
listed. What is the mode of these lengths?
(A) exactly the same as
2, 5, 3, 9, 4, 2, 8, 3, 9, 2, 8
(B) nothing like (A) 2 cm
(C) representative of (B) 3 cm
(D) larger than (C) 4 cm
531. Find the mode of 25, 95, 24, 44, 51, 95, (D) 7 cm
25, 47, 95, 99, 95 538. Your friend’s score on an intelligence test
(A) 99 (A) Nominal
(B) 95 (B) Ordinal
(C) 25 (C) Interval
(D) 24 (D) Ratio
527. C 528. D 529. C 530. C 531. B 532. D 533. D 534. A 535. A 536. B 537. A
538. C
1.3 Statistics 207
539. In this measurement, zero is just another (C) Census

point in the scale. (D) Prediction
(A) Nominal
544. Let P be the probability of an event. P
(B) Ordinal
=-1 implies
(C) Interval
(A) the event is very unlikely to happen.
(D) Ratio
(B) the event is very likely to happen.
540. If random selection occurred only among (C) the event will happen surely
male students that had an excellent aca- (D) the expression is nonsense.
demic background, what type of sampling
is this? 545. Which of the following is an example of
(A) Random Samples continuous data?
(B) Stratified Samples (A) The number of classes you have in a
day
(C) Cluster Samples
(B) The amount of time you spend study-
(D) Snowball Samples
ing
541. A student measures the weight of every (C) The number of games you have in-
individual in his batch with a total of 120 stalled in your phone/computer
students. He only needs a specific data on (D) The size of your shoes
a group of students. This means that he
will get the 546. Which among the statements is NOT an
example of statistical question?
(A) Sample
(A) Who is my favorite Korean Drama
(B) Statistics
star?
(C) Variable
(B) What is the favorite Korean Drama of
(D) none of above the grade 7 students?
542. There are 700 men, 800 women and 500 (C) What is the typical age of the grade 7
children in a town. A sample of 80 people Mathematics teachers?
is required with a stratified sample. How (D) How many brothers and sisters do my
would the sample be composed? classmates have?
(A) Men = 28 Women = 32 Children =
547. It is characterized because the differ-
20
ences between two data values is signif-
(B) Men = 32 Women = 28 Children = icant.
20
(A) Reason Scale
(C) Men = 20 Women = 32 Children =
(B) Ordinal Scale
28
(C) Nominal Scale
(D) Men = 29 Women = 31 Children =
20 (D) Interval Scale
543. A school principal wants to offer an after- 548. Which of the following is positional av-
school club setting. She decided to survey erage
300 students about this. Which word best (A) Median
describes the group of 300 students? (B) Arithmetic mean
(A) Population (C) Harmonic mean
(B) Sample (D) d) None of these
539. D 540. B 541. A 542. A 543. B 544. D 545. B 546. A 547. D 548. A 549. A
549. What is the mean of a standard normal interquartile range between the girls and
distribution? boys?
(A) 0 (A) 1
(B) 1 (B) 2
(C) 2 (C) 3
(D) -1 (D) 5
550. Which of the following statements are
555. What is the meaning of Statistics?
NARAYAN CHANGDER
true? I. All variable can be classified
as quantitative or categorical variables.II. (A) To Collect Data w/ Variability
Categorical variables can be continuous (B) To Collect Data w/o Variability
variable.III. Quantitative variables can be (C) Statistics
discrete variables.
(D) I was playing ROBLOX
(A) i only
(B) ii only 556. Collection of data is a feature of statis-
(C) iii only tics in which sense?
(D) i and iii (A) Singular Sense
(E) i and ii (B) Plural Sense
(C) Either Singular or Plural sense
551. This is a tool that researchers use to col-
lect needed data. (D) Both Singular & Plural sense
(A) Statistical Instrument 557. What is another math term for “middle”
(B) Statistical Measurement
(A) Median
(C) Statistical Diagram
(B) Waypoint
(D) none of above
(C) Range
552. Scientists track a flock of birds for three (D) Quasimodo
years to learn their migratory patterns.
(A) Survey 558. Two branches of statistics are and
(B) Observational Study
(C) Experiment (A) engineering and chemistry
(D) none of above (B) mathematical and inferential
(C) inferential and descriptive
553. Which level of measurement provides
(D) hard and easy
the least sensitive analysis?
(A) Nominal data 559. Determine whether the event is impos-
(B) Ordinal data sible, unlikely, as likely as not, likely, or
(C) Interval data certain. You flip a fair coin and the coin
(D) none of above will land heads up.
(A) impossible
554. The data below shows the number of
(B) unlikely
hours boys and girls spent studying for
a test.Boys:{2, 1, 3, 1, 2, 2}Girls:{4, 1, (C) even chance
3, 2, 2, 4}What is the difference in the (D) likely
550. D 551. A 552. B 553. A 554. A 555. A 556. A 557. A 558. C 559. C 560. C
1.3 Statistics 209
560. A representative set of a population, to 566. Variables which are numerical in nature
gain information from a large group (A) Dichotomic
(A) Population (B) Polynomic
(B) Response Survey (C) Qualitative
(C) Sample (D) Quantitative
(D) Experiment
567. At Donald’s Donuts the number of donut
561. The mean of 5, 9, x, 17 and 21 is 13, holes in a bag can vary. Help Donald find
then find the value of x the mode .12, 10, 10, 10, 13, 12, 11, 13,
(A) 9 10
(B) 13 (A) 13
(C) 17 (B) 12
(D) 21 (C) 10
(D) 111
562. The plant has grown 4 cm since yester-
day. 568. To study the amount of time students
(A) Qualitative spend doing homework each day, use a
random number generator to select 25
(B) Quantitative
freshmen, 25 sophomores, 25 juniors, and
(C) Both 25 seniors to survey.
(D) Neither (A) Convenience Sample
563. Why do we randomly select our sam- (B) Simple Random Sample
ples? (C) Stratified Random Sample
(A) for control (D) Interval Sample
(B) to reduce bias 569. letter grades (A, B, C, D, or F) that an
(C) so we don’t get the same answers English 100 class received on their essays.
from everyone what type of variable is this?
(D) to eliminate confounding results (A) Qualitative/ categorical
(B) Quantitative/ numeric
564. Let m be the mid point and b be the upper
limit of a class in a continuous frequency (C) quantitative and discrete
distribution. The lower limit of the class is (D) Quantitative and continuous
(A) 2m-b
570. Use the following information and the
(B) 2m + b Empirical Rule to estimate the answer.The
(C) m-b ages of golfers are normally distributed,
(D) m-2b with a mean of 38 and a standard devi-
ation of 4.Find the proportion of golfers
565. There is no logical order in the that are older than 42.
(A) quantitative and discrete. (A) 13.5%
(B) categorical and ordinal variable. (B) 16%
(C) quantitative and continuous. (C) 50%
(D) categorical and nominal variable. (D) 85%
561. B 562. B 563. B 564. A 565. D 566. D 567. C 568. C 569. A 570. B 571. D
571. What is the mean of the following data (B) Coefficient of variation
set? 133, 140, 98, 98, 140, 119, 119 (C) Measure of dispersion
(A) 42 (D) Measure of central tendency
(B) 98
(C) 119 577. What is the mode? 500, 600, 700, 800,
500, 600
(D) 121
(A) 500 and 600
572. Mrs. Trahan samples her class by picking (B) 700
NARAYAN CHANGDER
10 numbers from her hat and each number
is assigned to a student. This is ran- (C) 800 and 700
dom sampling. (D) 500
(A) Systematic
578. The null and alternative hypothesis can
(B) Simple be the same.
(C) Stratified (A) Yes
(D) Cluster (B) No
573. Exit poll that shows the chances of win- (C) Maybe
ning the number of seats by different par- (D) All the above
ties in 2014 election shown on T. V. For
the viewer is 579. find the range 34 27 49 38 67
(A) Primary data (A) 24
(B) Secondary data (B) 40
(C) Continuous data (C) 37
(D) Discrete data (D) 45
574. What is the first step when creating a 580. Faulty Survey Questions have in the
box and whisker plot? questions.
(A) Find the median (A) Bias
(B) Find the lowest and highest values
(B) Accurate Information
(C) Order the data set
(C) Data
(D) Find the median of the top and bottom
(D) Statistics
halves
575. A portion or part of a population is called 581. Significant level (α )?

a (A) function of a sample of observations
(A) Random survey which provides a basis for testing the va-
lidity of the null hypothesis.
(B) Sample
(C) Tally (B) the size of the critical region; the
probability of Type 1 error.
(D) Frequency distribution
(C) the critical region is located wholly at
576. The tendency of individual measures one end ofthe sampling distribution of the
among a set of measures to cluster around test statistic; H1 involves < or> but not
a central value is known as both.
(A) Coefficient of correlation (D) none of above
572. B 573. B 574. C 575. B 576. D 577. A 578. B 579. B 580. A 581. B 582. A
1.3 Statistics 211
582. The z-score represents (B) prediction about the independent vari-
(A) the amount of standard deviations a able on the basis of dependent variable
data value is above or below the mean. (C) prediction about the dependent vari-
(B) the percentile the data value is above able on the basis of Independent variable
or below the mean. (D) association between the variables
(C) the amount of standard deviations a
588. When the information is recorded in the
data value is above or below the median.
form of ranks given to the subjects are
(D) the percent the data value is above or said to be in
below the mean.
(A) Ordinal scale
583. What is the Mean? 9, 5, 7 (B) Ratio scale
(A) 8 (C) Interval scale
(B) 11 (D) Categorical scale
(C) 7 589. What is not a usual question to ask when
(D) 6 conducting statistical analysis?
584. Find the median.12, 5, 9, 18, 22, 25, 5 (A) If the data does not give me the re-
sults I want do I still trust the results?
(A) 9
(B) Where did the data come from, what
(B) 8
is its source?
(C) 12
(C) What kind of surveys were conducted,
(D) 18 if any?
585. Let the random variable X represent the (D) Are the results of the data reliable?
weight of male black bears before they be- 590. Before a nation wide election, a polling
gin hibernation. Research has shown that place was trying to see who would
X is approximately Normally distributed win.Which choice best represents a sam-
with a mean of 250 pounds and a stan- ple?
dard deviation of 50 pounds. What is P(X
(A) A selection of voters over age 50.
> 325 pounds)?
(B) A selection of male voters.
(A) 0.0668
(C) A selection of voters of different ages.
(B) 0.2514
(D) All of these.
(C) 0.7486
(D) 0.8531 591. Whats the chance of getting a red apple
from a bushel of 6 red apples and 5 green
586. Data collected from a population is an ex- apples?
ample of a
(A) 1/6
(A) sample
(B) 5/6
(B) population
(C) 6/5
(C) data
(D) 6/11
(D) survey
592. Three out of every 10 students age 8-12
587. Regression Equation is used to find out have a cell phone. Suppose there are 30
(A) the significant difference between students in Annabelle’s class. About how
the means many would have a phone?
583. C 584. C 585. A 586. D 587. C 588. A 589. A 590. C 591. D 592. B
(A) 3 598. , 9-What is the mode?

(B) 9 (A) 3
(C) 10 (B) 4
(D) 15 (C) 6
(D) 9
593. Making decisions and drawing conclu-
sions about populations. 599. Which of the following is a type of Dis-
crete Numerical Data?
(A) Descriptive Statistics
NARAYAN CHANGDER
(A) Number of Korean Drama Series that
(B) Inferential Statistics
High School students have completed
(C) Qualitative Variable (B) Height of Grade Seven students
(D) Quantitative Variable (C) The exact distance of each GLAF-
JENHS home from the school.
594. The number I see the most is called the
(D) The amount of rice that a typical Fil-
ipino teen consumes in a day
(A) mode
(B) median 600. What is a characteristic of a sample?
(C) Mean Absolute Deviation (A) parameter
(D) modular (B) statistic
(C) categorical variable
595. Find the median for the set of num- (D) numerical variable
bers:23, 37, 11, 58, 13, 45
(A) 30 601. Collection, presentation, and description
of sample data.
(B) 23
(A) Descriptive Statistics
(C) 37
(B) Inferential Statistics
(D) 28 (C) Qualitative Variable
596. Which of the following can be used to de- (D) Quantitative Variable
scribe the spread of a distribution? Select 602. The cell phone listed as third best on an
all that apply. online electronics review website.
(A) range (A) Nominal
(B) interquartile range (B) Ordinal
(C) standard deviation (C) Interval
(D) standard error (D) Ratio
(E) z-scores
603. You pick the king of diamonds from a full
597. We can measure the cause and effect re- deck of playing cards. Based on this data,
lationship by which of the following statistics makes a
prediction?
(A) Time series analysis
(A) You are more likely to pick a queen
(B) Correlation analysis than a king on your next draw
(C) Regression analysis (B) There are now 51 cards left in the
(D) Cross-sectional analysis deck
593. B 594. A 595. A 596. A 596. B 596. C 597. C 598. A 599. A 600. B 601. A
602. B 603. A 604. A
1.3 Statistics 213
(C) There are only three kings left in the (B) Do you have any siblings?
rest of the deck (C) What did you eat for breakfast?
(D) The deck now contains fewer dia- (D) How old is your father?
monds than hearts
610. Which answer shows categorical data?
604. The another name for t-test is (A) Age
(A) Student’s t-test (B) Height
(B) Paired t-test (C) Number of cousins
(C) Independent Sample t-test (D) Favorite singer
(D) Single sample
611. What is the mean of test scores? {70,
605. A question that anticipates and accounts 70, 80, 85, 85, 90, 95, 95, 100, 100}
for a variety of answers. (A) 87
(A) Statistical Question (B) 85, 95, and 100
(B) Numerical Data (C) 30
(C) Categorical Data (D) 85 and 90
(D) Survey 612. It is the complete set of all the elements
that will be studied
606. Between what two standard deviations
of a normal distribution contain 68% of (A) Inferential Data
the data? (B) Population
(A) one below and one above (C) Sample
(B) two below and two above (D) none of above
(C) two below and zero 613. Data that can be counted or measured.
(D) zero and two above (A) Categorical Data
(B) Statistical Data
607. is a sample in which each individual
or object in the entire population has an (C) Numerical Data
equal chance of being selected. (D) none of above
(A) Sample 614. Which of the following involves group-
(B) Population by-group selection of samples?
(C) Random Sample (A) Simple random sampling
(D) Quartile (B) Stratified sampling
(C) Snowball sampling
608. What is a the meaning for “median”?
(D) Quota sampling
(A) fair share
(B) middle 615. A jar contains 2 pink, 6 red, and 4 blue
marbles. If you pick one marble without
(C) repeats the most
looking, what is the probability that the
(D) variation marble you pick will be red or blue?
609. What statement below is an example of (A) 5/6
a statistical question? (B) 1/2
(A) What was the range of scores on the (C) 1/3
quiz? (D) 1/6
605. A 606. A 607. C 608. B 609. A 610. D 611. A 612. B 613. C 614. B 615. A
616. statistics consists of generalizing 621. The main purpose of descriptive statis-
from samples to populations, performing tics is to:
estimations and hypothesis tests, deter- (A) Summarize data in a useful and infor-
mining relationships among variables, and mative manner.
making predictions.
(B) Make inferences about a population.
(A) mathematical
(B) descriptive (C) Determine if the data adequately rep-
resents the population.
(C) inferential
NARAYAN CHANGDER
(D) Gather or collect data.
(D) population
617. Katie earned 84, 92, 84, 75 and 70 on 622. An example of a categorical and ordinal
her first 5 tests. What is the minimum variable would be
grade Katie needs to earn on the next test (A) the hair color of each student.
to have a mean of 84?
(B) the favorite subject of each stu-
(A) 81 dent.
(B) 84
(C) the birth date of students in a
(C) 95 class.
(D) 99
(D) the favorite ice cream flavor of
618. A researcher plans to conduct a test of each student.
hypotheses at the α = 0.01 significance
level. She designs her study to have a 623. Statistics in plural sense deals with
power of 0.90 at a particular alternative (A) methods of collection of data
value of the parameter of interest. The (B) Methods of presentation of data
probability that the researcher will commit
a Type I error is (C) Numerical information
(A) 0.01 (D) Both (a) and (b)
(B) 0.10
624. Which of the following method is used
(C) 0.90
when an investigator collects the required
(D) 0.99 information with the informant
619. the average value (statistic) is equal to (A) Direct personal interview
the parameter (B) Indirect oral interview
(A) Biased Estimate (C) Mailing method
(B) Positive Bias
(D) Questionnaire through correspon-
(C) Unbiased Estimate dents
(D) Negative Bias
625. When the temperature is 0 degree cel-
620. What is the range of the following data
cius, which of the following is not true?
set:1, 1, 3, 5, 5, 6
(A) zero is just another point in the scale
(A) 1
(B) 3 (B) there is no temperature
(C) 4 (C) an example of interval scale
(D) 5 (D) freezing point of water
616. C 617. D 618. A 619. C 620. D 621. A 622. C 623. C 624. A 625. B 626. D
1.3 Statistics 215
626. Mrs. Trahan samples her class by se- 631. What is the class size of the class 15-
lecting all students sitting at group 1 and 30?
group 5 in her classroom. This sampling (A) 15
technique is called? (B) 30
(A) Simple (C) 22
(B) Stratified (D) 22.5
(C) Systematic 632. The entire group being studied.
(D) Cluster (A) random sample
(B) biased sample
627. Distance of difference between the least
and greatest numbers in a data set. (C) sample
(D) population
(A) Finding the Median
(B) Measure of Center 633. The value appearing at the center of a
(C) Range sorted version of a list, or the mean of the
two central values.
(D) Survey
(A) Median
628. What does “mean” mean? (B) Range
(A) average (C) Mean
(B) middle (D) Mode
(C) repeats the most 634. Check all that applyStatistics are used
(D) variation to:
(A) Describe data
629. Sample is different from population be- (B) Tell me which pizza I should buy for
cause dinner
(A) a set of items selected from the pop- (C) Compare two or more data sets
ulation (D) Make students love Math class
(B) a complete set (E) Make estimates about population
(C) a measuring variable for every unit in characteristics
the population
635. Farmer Joe randomly picks 100 trees us-
(D) a study done before the actual frame- ing a random number generator to esti-
work mate the number of apples produced by his
apple trees. This is sampling.
630. As part of a 6th grade statistics project,
(A) Simple
the teacher brings a candy jar full of gum-
balls (red & green). The assignment is to (B) Stratified
estimate the proportion of red gumballs (C) Cluster
in the jar. Suppose one of the students (D) Systematic
draws 25 gumballs from the jar:8 are red,
636. Which statistical tool is used to compare
17 are green. What is the POPULATION?
the means of more than two groups
(A) students (A) Independent Sample t-test
(B) red gumballs (B) One Way Analysis of Variance
(C) all gumballs in jar (C) Regression
(D) 25 gumballs drawn (D) Product moment correlation
627. C 628. A 629. A 630. C 631. A 632. D 633. A 634. A 634. C 634. E 635. A
636. B 637. A
637. This is an attribute that describes an en- (B) It decreases bias.

tity such as a person, place or a thing (C) Having more people is always better.
and the value that variable take may vary
(D) More people means that our results
from one entity to another.
are more accurate.
(A) Variable
(B) Sample 643. The following are the uses of Statistics
(C) Parameter EXCEPT
(D) Population (A) It allows comparison of quantities
NARAYAN CHANGDER
(B) It provides exact number of unknown
638. Find the mean of these numbers:5, 11, 2, quantities
12, 4, 2
(C) It gives explanation to actions that
(A) 4.1 has taken place
(B) 6
(D) none of above
(C) 4.5
(D) 4 644. What is the Range of the following
data:6, 8, 12, 3, 25, 13, 29
639. To find the you put all numbers in
(A) 2
order from least to greatest and find the
number that is in the middle . (B) 26
(A) Mean (C) 27
(B) Median (D) 29
(C) Mode
645. These are variables that can be placed in
(D) Range distinct categories.
640. Your test scores are 87, 86, 89, and 88. (A) discrete variables
You have one more test in the marking pe- (B) continuous variables
riod. * You want your average to be a 90. (C) qualitative variables
What is the lowest score you must get on
(D) quantitative variables
your last test?
(A) 96 646. The probability of it raining today is
(B) 90 30%. What is the probability that it will
(C) 94 NOT rain?
(D) 100 (A) 30%
(B) 70%
641. Statistics is defined in terms of numerical
data in (C) 100%
(A) Singular sense (D) 0%
(B) Plural sense 647. Find the z-score.{15, 9, 27, 29, 37, 17,
(C) Both of these 30}x = 14
(D) None of these (A) -1.02
642. Why is a sample of 1000 people better (B) -1.2
than a sample of 100 people? (C) 1.4
(A) It reduces the margin of error. (D) 2.1
638. B 639. B 640. D 641. B 642. A 643. B 644. B 645. C 646. B 647. A 648. A
1.3 Statistics 217
648. What’s the rounding rule for the interval 653. Find the area under the standard normal
estimate of the mean using sample mean curve that lies between z=-0.5 and z=1.5.
and SD? (A) 62.46%
(A) Round off to the same number of dec- (B) 72.47%
imal places as given for the mean (C) 5.40%
(B) Round off to one or more decimal (D) 62.47%
place/s than the number of decimal
places in the raw data 654. Non Parametric Statistics are not used in
which of the following condition
(C) 3 decimal places
(A) When the data is recorded in categor-
(D) Round up to the next whole number ical scale
(B) In case of data is normally distributed
649. The following are the four scales of mea-
surement EXCEPT (C) When the data has non-normal distri-
bution
(A) Nominal
(D) When the data is recorded in ordinal
(B) Ordinal scale
(C) Categorical
655. Statistics are used
(D) Interval
(A) in education
650. For which set of numbers do the mean, (B) in science
median and mode all have the same val- (C) in government
ues? (D) in mathematics
(A) 2, 2, 2, 4 (E) all of the answer choices
(B) 1, 3, 3, 3, 5 656. When experimenting with the growth of
(C) 1, 1, 2, 5, 6 a plant, a scientist uses three (of the same
(D) 1, 1, 2, 1, 5 type of) plants, two different fertilizers,
equal light, and equal water. What type
651. What do you do if there are two num- of variable is the fertilizer?
bers in “the middle” when you are finding (A) Dependent
the median? (B) Independent
(A) Pick your favorite number (C) Control
(B) Add the two numbers in the middle & (D) Compound
then divide by two.
657. Second quartile is known as
(C) They are both the median
(A) Mode
(B) Mean
652. The arithmetic average of a distribution (C) Median
obtained by adding the scores and then di- (D) Harmonic mean
viding by the number of scores.
658. In plural sense statistics deals with
(A) Mode (A) Qualitative data only
(B) Median (B) Quantitative data only
(C) Mean (C) Both Qualitative & Quantitative data
(D) Range (D) None of these
649. C 650. B 651. B 652. C 653. D 654. B 655. E 656. B 657. C 658. B 659. C
659. Which question is a statistical question? 664. What is the Mode of the following data?
(A) What color are my eyes? 27, 12, 5, 1, 19
(B) What are the chances that a child of (A) 27
blue-eyed parents will have brown eyes? (B) 0
(C) What color are the eyes of your family (C) 5
members? (D) No mode
(D) How many students in a class of 24
NARAYAN CHANGDER
have blue eyes if 1/4 of the students’ eyes 665. Statistics is
are blue? (A) ..the collection and interpretation of
data.
660. What is a characteristic of a population?
(B) ..the collection and representation of
(A) unit
data.
(B) sample
(C) ..the investigation and utilization of
(C) parameter data.
(D) statistic (D) the investigation and representa-
tion of data.
661. Our data come from , but we really
care most about
666. A graph that uses vertical or horizontal
(A) theories; mathematical models bars to show comparisons among two or
(B) subjective methods; objective meth- more items.
ods (A) Numerical Data
(C) samples; populations (B) Box Plot
(D) populations; samples (C) Bar Graph
662. Use the following information and the (D) Categorical graph
Empirical Rule to estimate the answer.The
ages of golfers are normally distributed, 667. Claims that attempt to imply connections
with a mean of 38 and a standard devi- between variables that may not actually
ation of 4.There are 500 golf members at exist, like “eating fish MAY HELP to re-
the Mathy Country Club. How many are duce your cholesterol”, is which type of
younger than 34? misuse?
(A) 16 (A) Detached Statistics
(B) 80 (B) Misleading Graphs
(C) 100 (C) Suspect Samples
(D) 150 (D) Implied Connections
663. The most appropriate method to select a 668. Ranking system is part of which classifi-
measuring tool (Test) is: cation?
(A) Characteristics of population (A) Nominal
(B) Validity and reliability of test (B) Ordinal
(C) Researcher’s area of Interest (C) Interval
(D) Purpose of the research (D) Ratio
660. C 661. C 662. B 663. B 664. D 665. A 666. C 667. D 668. B 669. A
1.3 Statistics 219
669. What is a survey? (B) Observational Study

(A) process of collecting statistical data (C) Experiment
from a small group of a population (D) none of above
(B) Statistics collected from an entire
population 675. It is a type of data that can be expressed
in numbers.
(C) An element or feature that can vary
(A) Number Theory
(D) A person chosen from a population
(B) Numerical data set
670. A branch of science which deals with (C) Statistics
the collection, organization, presentation, (D) Statistical question
analysis, and interpretation of data
(A) Geometry 676. The wickets taken by a bowler in 10
(B) Statistics cricket matches are as follows:2, 6, 4, 5,
0, 2, 1, 3, 2, 3 Find the mode of the data
(C) Biology
(A) 2
(D) Chemistry
(B) 3
671. What’s the rounding rule for the interval (C) 4
estimate of the mean using raw data? (D) 5
(A) Round off to the same number of dec-
imal places as given for the mean 677. Marital status, beauty and quality are
examples of a
(B) Round off to one or more decimal
place/s than the number of decimal (A) Qualitative Data
places in the raw data (B) Quantitative Data
(C) 3 decimal places (C) Continuous Data
(D) Round up to the next whole number (D) Discrete Data
672. Which of the following symbols denotes 678. Categorical variables are separated into
margin of error?
(A) E (A) ordinal and nominal.
(B) s (B) discrete and continuous.
(C) t (C) discrete and nominal.
(D) X (D) ordinal and continuous.
673. A sample that is by chance . 679. Kolmogorov-Smirnov test is used for:

(A) random sample (A) Prediction
(B) stratified sample (B) Normal distribution
(C) systematic sample (C) Parametric statistics
(D) none of above (D) Non parametric statistics
674. A farmer puts fertilizer on half his corn 680. A statistic is

plans and no fertilizer on the other half. (A) a planned activity whose results yield
He determines which half produced more a set of data
corn at the end of the season. (B) a numerical value that summarizes all
(A) Survey of the data of an entire population
670. B 671. B 672. A 673. A 674. C 675. B 676. D 677. A 678. A 679. B 680. D
(C) the set of values collected from the 686. Find the mode of 34, 48, 87, 56, 87, 51,
variable from each of the elements that 29
belong to the sample (A) 34
(D) A numerical value summarizing the (B) 48
sample data
(C) 87
681. When a data point is higher than its (D) 56
neighboring data points.
687. It is characterized when the data can be
NARAYAN CHANGDER
(A) Peak
accommodated in some order
(B) Symmetry
(A) Nominal Scale
(C) Cluster
(B) Interval Scale
(D) Gap
(C) Ordinal Scale
682. Qualitative data is which (D) Reason Scale
(A) Can be quantified
(B) Can not be quantified 688. The sum of frequencies for all classes will
always equal
(C) none
(A) 1.
(D) none of above
(B) the number of elements in a data set.
683. Which of the following is the FIRST step (C) the number of classes.
of a hypothesis test?
(D) a value between 0 and 1.
(A) Check assumptions & conditions
(B) Find your test statistic 689. Failing to reject a null hypothesis that is
(C) State your conclusion false can be characterized as
(D) State your null & alternative hypothe- (A) a Type I error
ses (B) a Type II error
(C) both a Type I and Type II error
684. A test is given that has a mean of 70 and
a standard deviation of 13. If a student’s (D) no error
Z-score is +1, the student’s score before
conversion was: 690. What is the last (final) stage of statisti-
cal methods?
(A) 70
(A) Collection of data
(B) 83
(B) Interpretation of data
(C) 57
(C) Analysis of data
(D) Cannot be determined from the infor-
mation given. (D) Presentation of data
685. Small, medium and large measures to 691. It is a type of question where the re-
give the size of an object are sponse is not limited to a set of options.
(A) Nominal Scale (A) Open-Ended Questions
(B) Reason Scale (B) Statistical Instruments
(C) Interval Scale (C) Questionnaire
(D) Ordinal Scale (D) . Closed-Ended Questions
681. A 682. B 683. D 684. B 685. D 686. C 687. C 688. B 689. B 690. B 691. A
692. B
1.4 Econometrics 221
692. The collection of all individuals, items, or 696. The percentile represents the
data under consideration in a statistical (A) percent of data values that are below.
study. (B) percent of data values that are above.
(A) Constant (C) number of data values that are below.
(B) Population (D) number of data values that are below.
(C) Sample
697. What is the empirical relation between
(D) Variable
mean, median and mode?
693. Inferential statistics is (A) Mode = 3 Median-2 Mean
(A) a techniques to improve the efficiency (B) Mean = 3 Mode-2 Mode
and effectiveness of the organization. (C) Median = 3 Mean-2 Mode
(B) making generalization about popula- (D) Mode = 3 Median + 2 Mean
tion by analyzing the sample.
698. A survey company was trying to see if
(C) is a techniques to implement a strate-
people in a state thought the pollution was
gic plan.
too high.Which choice best represents a pa-
(D) is a good representation of a popula- rameter?
tion
(A) All people in the state.
694. What is the standard deviation for the (B) Percentage of all people in the state
data given:5, 10, 7, 12, 0, 20, 15, 22, 8, who thought the pollution was too high.
2 (C) 500 randomly selected residents of
(A) 6.89 the state.
(B) 10.1 (D) 71% of the residents surveyed
thought the pollution was too high.
(C) 7.26
(D) 9 699. Innaproperty drawn graphs that can mis-
represent the data and lead the reader to
695. Lack of confidence in statistical methods draw false conclusions, is which type of
is called misuse?
(A) Functions of statistics (A) Misleading Graphs
(B) Distrust of statistics (B) Implied Connections
(C) Trust of statistics (C) Detached Statistics
(D) All of these (D) Changing the Subject
1.4 Econometrics
1. Andi will add a new variable in the data 2. White Test is used to detecting:
analysis that is being carried out, what (A) Heteroscedasticity
command should Andi use?
(B) Autocorrelation
(A) Generate
(C) Correlation
(B) Add
(D) Homoscedasticity
(C) Keep
(D) More 3. TOOL OF ECONOMETRICS
693. B 694. C 695. B 696. A 697. A 698. B 699. A 1. A 2. A 3. C

(A) Correlation 9. Stochastic variables have:

(B) Substraction (A) Deterministic values
(C) Regression (B) Non-random value
(D) Addition (C) Imply causation
4. (There may be more than one correct an- (D) Have probability distribution
swer)When the errors are correlated with
each other, this is described as 10. studying the dependence of a variable
on only a single explanatory variable is
NARAYAN CHANGDER
(A) homoscedasticity
known as
(B) heteroscedasticity
(A) One Variable regression analysis
(C) serial correlation
(B) Two variable regression analysis
(D) autocorrelation
(E) multicollinearity (C) Three variable regression analysis
(D) Multiple regression analysis
5. AR(4) is refer to:
(A) fourth level auto regressive model 11. Data collected for a variable over a period
(B) fourth order serial correlation of time is called:
(C) fourth order heteroscedasticity (A) Panel data
(D) fourth year autocorrelation (B) Pooled data
(C) Time series data
6. (There may be more than one correct an-
swer)Which of the following represents (D) Cross-sectional data
true observed values?
12. What does the green caption in the do file
(A) Y = α + β · X mean?
(B) Yi = hat α + hat β · Xi + hat ui
(A) Note Bookmark
(C) Yi = α + β · Xi + ui
(B) Stata understandable syntax
(D) hat Yi = hat α + hat β · Xi
(C) variable or value
7. Regression analysis is concerned with es- (D) non-valued variables (strings, quotes
timating and variable labels)
(A) The mean value of the dependent vari-
able 13. The cd command is used for?
(B) The mean value of the explanatory (A) Shows the contents in a directory
variable (B) Enter data
(C) The mean value of the correlation co- (C) Changing directories
efficient
(D) Indicates the number of observations
(D) The mean value of the fixed variable
8. Below are the type of discrete data ex- 14. One of the properties of OLS estimators is
cept:
(A) Ordinal (A) Linear
(B) Continuous (B) Unbiased
(C) Binary (C) Minimum Variance
(D) Nominal (D) All of the above
4. C 4. D 5. B 6. B 6. C 7. A 8. B 9. D 10. B 11. C 12. A 13. C 14. D 15. C

15. Which of the following is true of dummy (B) Transforming the functional relation-
variables? ship
(A) A dummy variable always takes a (C) Do nothing
value less than 1. (D) Decrease the sample size
(B) A dummy variable always takes a
value higher than 1 21. Which of the following causes inappropri-
(C) A dummy variable takes a value of 0 ate data estimation?
or 1. (A) Outlier
(D) A dummy variable takes a value of 1 (B) Data computation
or 10. (C) Interpolation
(D) Data transformation
16. In the point & click method, which point
is used to display the standard deviation, 22. The locus of the conditional means of Y for
average, maximum and minimum values? the fixed values of X is the
(A) Tabulation (A) Conditional expectation function
(B) Data Editor (B) Population Regression Line
(C) Summary Statistics (C) Intercept line
(D) Statistics (D) Linear Regression Line
17. Which of the following is true of Chow 23. The choice of one tailed or two tailed test
test? depends upon
(A) It is a type of t test.
(A) Null Hypothesis
(B) It is a type of sign test.
(B) Alternative Hypothesis
(C) It is only valid under homoskedasticty
(C) Both
(D) It is only valid under heteroskedastic-
(D) None
ity
24. Refer to the model above. The benchmark
18. Toolbar on the do file that works to run
group in this model is
the command?
(A) the group of educated people
(A) Execute
(B) New (B) the group of uneducated people
(C) Print (C) the group of individuals with a high in-
come
(D) Open
(D) the group of individuals with a low in-
19. The command to create a new directory come
is?
25. Newey-West Standard Errors and Het-
(A) mkdir “working folder address”
eroscedasticity Corrected Standard Errors
(B) global log “D:/stata nama/log” are similar in terms of:
(C) cd “woking folder address”
(A) do nothing
(D) log using “$log/data.dta”
(B) correcting standard errors only
20. Below are the remedies for multicollinear- (C) correcting standard errors and chang-
ity, except: ing the coefficients
(A) Combining cross-sectional and time- (D) correcting standard errors without
series data changing the coefficients
16. C 17. C 18. A 19. A 20. D 21. A 22. B 23. B 24. B 25. D 26. A 26. B 26. D
26. Multiple Answer Question:Econometrics (C) linear in parameters and must be lin-
actively uses ear in variables
(A) Economic theory (D) linear in parameters and may not be
(B) Statistics linear in variables
(C) Physics
(D) Mathematics 33. Given the data structure as follows:N =
50, T = 7. Which of the following is suit-
27. A variable is used to incorporate qual- able method to be used?
NARAYAN CHANGDER
itative information in a regression model. (A) Static panel
(A) dependent (B) Panel Cointegration
(B) continuous
(C) Dynamic panel GMM
(C) binomial
(D) Pooled Mean Group (PMG)
(D) dummy
28. Multiple Answer Question:In the popula- 34. Proportion of variation in the dependent
tion model Y=β 0 +β 1 +u, u refers to variable explained by variation in the in-
(A) Error term dependent variable
(B) Residuals (A) R
(C) Disturbance (B) R2
(D) Innovations (C) residual
29. Independent variable is (D) intercept
(A) Predictor
35. The command to use when you want to
(B) Intercept label a variable value is?
(C) Response
(A) Label define
(D) Residual
(B) Label values
30. The inclusion of an irrelevant variable will: (C) Labelin dong
(A) Increase the variance (D) Tag variable
(B) decrease the t-scores
(C) decrease adjusted r-squared 36. A formula to compute White Test statistics
(D) all above is correct is:
(A) N*R
31. Stochastic variables are:
(A) a. Deterministic values (B) N*R2
(B) Non-random value (C) N*2R
(C) Imply causation (D) N*adjusted R2
(D) Have probability distribution
37. The value of R2 lies between
32. linear regression model is (A) -1 and 0
(A) Linear in explanatory variables but
(B) -1 and 1
may not be linear in parameters
(B) non linear in parameters and must be (C) 0 and 1
linear in variables (D) None of the above
27. D 28. A 28. C 28. D 29. A 30. D 31. D 32. D 33. C 34. B 35. B 36. B
37. C 38. D
38. The main consequence of perfect multi- (B) A dependent variable cannot have
collinearity is: more than 2 values.
(A) OLS is incapable of generating esti- (C) A dependent variable can be binary
mates of the t-statistics (D) A dependent variable cannot have a
(B) OLS is incapable of generating esti- qualitative meaning
mates of the p-value
(C) OLS is incapable of generating esti- 44. Autocorrelation is:
mates of the standard error (A) the correlation of a time series with
(D) OLS is incapable of generating esti- its own past and future values
mates of the regression coefficients (B) related to error term
(C) violates the CLRM
39. is a set of elements taken from a pop-
ulation according to certain rules. (D) associates with time series model
(A) population 45. (There may be more than one correct an-
(B) sample swer)When the errors are correlated with
(C) statistic one or more explanatory variables, this is
(D) element described as
40. Data collected at a point in time is called
(A) Cross-sectional data (C) serial correlation
(B) Time series data (D) autocorrelation
(C) Pooled data (E) multicollinearity
(D) Panel data 46. Testing each coefficient significance in the
41. What does the red color in the do file model could be done by the following ex-
mean? cept:
(A) note marker (A) t-test
(B) syntax that can be understood by (B) p-value
stata (C) F-test
(C) variable or value (D) none of above
(D) non-valued variables (strings, quotes
and variable labels) 47. Type of data structure
(A) Cross-section
42. The file that contains programming notes
(B) Time Series
in Stata is called
(C) Panel data
(A) Logfile
(B) Dofile
(C) Output 48. Under the least square procedure the
(D) Result larger the ei the larger is the
(A) Standard error
43. Which of the following is true of depen-
dent variables? (B) Regression error
(A) A dependent variable can only have a (C) Explained sum of squares
numerical value (D) Squared sum of Residuals
39. B 40. A 41. D 42. B 43. C 44. A 45. B 46. C 47. D 48. D 49. B
49. If there is a possibility of x causes y and y 55. Testing overall significance of a model
causes x, and given N = 50, T = 1, which could be done by:
of the following is the suitable method? (A) Chi-square test
(A) Generalized Method of Moment (B) t-test
(B) Two stage-least square (C) F-test
(C) Ordinary Least Square (D) None of the above
(D) FMOLS
56. In OLS regression, the task is to minimize
NARAYAN CHANGDER
50. Heteroscedasticity is associated with:
(A) Total Sum Squares
(A) Time series data
(B) Regression Sum Squares
(B) Cross-sectional data
(C) Residual Sum Squares
(C) Panel Data
(D) Unexplained Sum Squares
(D) Unbalanced Panel Data
57. Given the data structure as follows:N = 5,
51. Which data type does contain observa- T = 30. Which of the following is suitable
tions in a fixed period of time and from method to be used?
individual units? (A) Static Pane
(A) Panel data (B) Panel Cointegration
(B) Time series data (C) Dynamic panel GMM
(C) Cross sectional data (D) Pooled Mean Group (PMG)
(D) Irregularly spaced data
58. In an econometric model if relevant vari-
52. Observed value minus predicted value of ables are excluded and irrelevant vari-
the response variable ables are included then it is said to be a
(A) Residual
(A) simultaneity bias
(B) Explanatory Variable
(B) specification unbias
(C) Intercept
(C) specification bias
(D) Lurking Variable
(D) none of the above
53. one of the properties of OLS estimators is
59. Toolbar on the do file that works to open
(A) Linear the existing do file?
(B) Unbiased (A) Execute
(C) Minimum Variance (B) New
(D) All of the above (C) Print
(D) Open
54. Consider the model C=β 0 +β 1 Income+β 2 Income2 +u.
Which one is the average marginal effect 60. What is the 4th planet from the sun?
of Income on C? (A) Earth
(A) β 1 +β 2 Income (B) Mars
(B) β 1 +2β 2 Income (C) Pluto
(C) β 1 +β 2 Income 2
(D) Earth
(D) β 1 +β 2 (E) Venus
50. B 51. C 52. A 53. D 54. B 55. C 56. C 56. D 57. B 58. C 59. D 60. B 61. B
61. The probability of rejecting the null hy- 66. (There may be more than one correct an-
pothesis when it is true is called swer)Which of the following is an assump-
(A) Level of confidence tion in regression?
(B) Level of significance
(C) Power of test (C) serial correlation
(D) None of the above (D) autocorrelation
(E) multicollinearity
62. “X can cause Y, and Y can cause X”. Which
of the following is suitable to describe the 67. In regression models, errors are mis-
above statement? takesthe other factors affecting Y (T)the
(A) Correlation explained factorsthe explanatory factors
(A) the explained factors
(B) Bidirectional causality
(B) the explanatory factors
(C) Relationship (C) mistakes
(D) Unidirectional causality (D) the other factors affecting Y
63. (There may be more than one correct 68. Refer to the model above. The inclusion of
answer)Correlation between the explana- another binary variable in this model that
tory variables is described as takes a value of 1 if a person is unedu-
cated, will give rise to the problem of
(A) omitted variable bias
(B) heteroscedasticity (B) self-selection
(C) serial correlation (C) dummy variable trap
(D) autocorrelation (D) heteroskedastcity
(E) multicollinearity 69. The rules of thumb which commonly use to
measure multicollinearity are:
64. The command to change directory is? (A) VIFs and coefficient
(A) mkdir “working folder address” (B) CV and simple correlation coefficient
(B) cd “woking folder address” (C) VIFs and simple correlation coeffi-
(C) global directory “woking folder ad- cient
dress/directory” (D) covariance and correlation
(D) global log “working folder ad- 70. Te alternative hypothesis for Ramsey Re-
dress/log” set test is:
(A) The error term is normally distributed
65. (There may be more than one correct an- (B) The model is correctly specified
swer)In OLS regression, the task is to min-
(C) The model is not correctly specified
imize
(D) There is autocorrelation
(A) Explanatory Sum Squares
71. REGRESSION WAS INTRODUCED BY
(B) Residual Sum Squares
(A) Francis Galton
(C) Total Sum Squares (B) Dalton
(D) Regression Sum Squares (C) Malthus
(E) Unexplained Sum Squares (D) Kendell
62. B 63. E 64. B 65. B 65. E 66. A 67. D 68. C 69. C 70. C 71. A 72. A
72. In a regression model, which of the follow- (C) expected bias analysis
ing will be described using a binary vari- (D) correlation analysis
able?
(A) Whether it rained on a particular day 78. The dependent variable in regression anal-
or it did not ysis is assumed to be
(B) The volume of rainfall during a year (A) known values
(C) The percentage of humidity in air on a (B) constant
particular day
NARAYAN CHANGDER
(C) non Stochastic
(D) The concentration of dust particles in
air (D) stochastic
73. Multiple Answer Question:Econometrics is 79. Regression analysis is concerned with the
based upon the development of statistical study of the dependence of:
methods for (A) Two known variables
(A) estimating economic relationships (B) Explanatory variables on one or more
(B) creating economic phenomena dependent variables
(C) testing economic theories (C) Dependent variables on one or more
(D) evaluating and implementing govern- explanatory variables
ment and business policy. (D) Both explanatory and dependent vari-
ables on other
74. The command to create a macro directory
log is?
80. Omitted variable bias also known as:
(A) mkdir “working folder address”
(A) systematic error
(B) global log “D:/stata nama/log”
(B) specification error (T)
(C) cd “woking folder address”
(C) error term
(D) log using “$log/data.dta”
(D) unbiasedness
75. The command used to delete variables is?
(A) of the 81. Variable data presented in red on the stats
(B) drop is called data
(C) clear (A) String
(D) list (B) Value label
(C) numeric
swer)In regression models, errors are (D) Value variable
(A) mistakes
82. What does the black color in the do file
(B) the other factors affecting Y mean?
(C) the explained factors (A) note marker
(D) the explanatory factors
(B) syntax that can be understood by
77. A method to choose the omitted variable stata
is: (C) variable or value
(A) time series analysis (D) non-valued variables (strings, quotes
(B) omitted variable analysis and variable labels)
73. A 73. C 73. D 74. B 75. B 76. B 77. C 78. D 79. C 80. B 81. A 82. C 83. A
83. Which of the following is a test for auto- (C) hat y y

correlation (D) estimates the error
(A) Durbin Watson
(E) is estimated by the error
(B) park test
(C) Gjesler test 89. Econometrics is a combination of
(D) BPG (A) Economics + mathematics
84. y= bo + b1x or y = a + bx, the regression (B) Economics + statistics
line (C) Economics+Mathematics + statis-
(A) Scatterplot tics
(B) Linear Model (line of best fit) (D) None of the above
(C) Correlation Coefficient
90. Which of the following Gauss-Markov as-
(D) Re-expression or transformation
sumptions is violated by the linear proba-
85. The explanatory variable in regression bility model?
analysis are assumed to be (A) The assumption of constant variance
(A) Non stochastic of the error term.
(B) Constant (B) The assumption of zero conditional
(C) Stochastic mean of the error term
(D) Known values (C) The assumption of no exact linear re-
lationship among independent variables
86. The income of an individual in Budopia de-
pends on his ethnicity and several other (D) The assumption that none of the inde-
factors which can be measured quantita- pendent variables are constants
tively. If there are 5 ethnic groups in Bu-
91. Linear regression model is
dopia, how many dummy variables should
be included in the regression equation for (A) linear in parameters and must be lin-
income determination in Budopia? ear in variables
(A) 1 (B) linear in parameters and may not be
(B) 5 linear in variables
(C) 6 (C) non linear in parameters and must be
(D) 4 linear in variables
(D) linear in explanatory variables but
87. Below are the methods on detecting serial may not be linear in parameters
correlation, except:
(A) durbin h 92. (There may be more than one correct an-
(B) durbin d swer)A good model has high values in
(C) park test which of the following?
(D) BG test (A) R2
(B) Standard Error of Regression
swer) The residual is (C) Standard Error of Betas
(A) y − y (D) t-statistics
(B) y − hat y (E) F statistics
84. B 85. A 86. D 87. C 88. B 88. D 89. C 90. A 91. B 92. A 92. D 92. E 93. D
93. The number in front of the variable (D) SUBSTRACTION

(A) Exponent
96. The operator in state which is usually used
(B) Base when you want to calculate something in
(C) Correlation state is called?
(D) Coefficient (A) Arithmetic
94. A method for finding the equation of a line (B) relational
that minimizes the sum of squared residu- (C) Logic
NARAYAN CHANGDER
als (D) Numerical
(A) Form
(B) Least Squares 97. In correlation analysis we measure the:
(C) Scatterplot (A) Degree of linear association between
two variables
(D) Association
(B) Degree of causation between two
95. TOOL OF ECONOMETRICS variables
(A) REGRESSION (C) Predictability of the two variables
(B) CORRELATION (D) Regression between the two vari-
(C) ADDITION ables
1.5 Mathematical Economics

1. Maximum demand on a power plant is (A) Buy more shares
(A) the greatest of all “short time interval (B) Sell the shares
averaged” demand during the period (C) Do nothing
(B) instantaneous maximum value of kVA (D) Look for other stocks to buy
supplied during a period
4. An increase in quantity demanded
(C) both (a) or (b)
(A) results in a movement downward and
to the right along a fixed demand curve
2. You’re going to buy a new bicycle. What (B) results in a movement upward and to
should be one of your first steps in com- the left along a fixed demand curve.
parison shopping? (C) shifts the demand curve to the left.
(A) Decide what bicycle features you care (D) shifts the demand curve to the right.
most about
5. All of the following explain why humans
(B) Visit the store that sells the least ex-
might “follow the herd” EXCEPT
pensive bicycles
(A) People prefer having opinions that
(C) Locate a coupon for bicycles
are very different from those of others
(D) Sell your old bicycle (B) It can be uncomfortable standing out
3. You buy a stock that has a price of $50 from the crowd
per share. A week later the stock’s price (C) Humans evolved to stick with the herd
drops to $25 per share (it’s lost half its to survive
value). If you are affected by loss aver- (D) Fighting social pressure can be diffi-
sion you would be likely to cult to do
94. B 95. A 96. A 97. A 1. A 2. A 3. B 4. A 5. A

1.5 Mathematical Economics 231
6. Generating capacity connected to the (C) $6.25

bus bars and ready to take load when (D) $4.50
switched on is known as
(A) Hot reserve 11. C=f(y) This indicates the relationship be-
tween what?
(B) COld reserve
(A) Use and income
(C) Spinning reserve
(B) Usage and cost
(D) Firm power
(C) Capital and cost
7. “We should cut taxes in half to increase (D) Income and expenditure
disposable income levels”. This is an ex-
ample of 12. How many characteristics of monopoly
(A) Normative Statement market
(B) Positive Statement (A) 7
(C) None of the above (B) 5
(D) none of above (C) 6
(D) 9
8. Your friend gives you an item. A day later,
they offer to trade you another item of 13. Which of the following best describes
similar value. According to the endow- what a cognitive bias is?
ment effect, most people would keep the (A) A rational decision that is based on re-
item search and facts
(A) They received first (B) The belief that a person should
(B) They were offered second change their opinions when new facts
(C) They could sell for the most arise
(D) They think looks the best (C) The belief that we are right until some-
one provides information that contradicts
9. Pizza is a normal good if our belief
(A) the demand for pizza rises when in- (D) An error in the way we think that can
come rises. influence our decisions
(B) the demand for pizza rises when the
price of pizza falls. 14. Economists make assumptions in order to
(C) the demand curve for pizza slopes
downward. (A) mimic the methodologies employed
(D) the demand curve for pizza shifts to by other scientists.
the right when the price of burritos rises, (B) minimize the number of experiments
assuming pizza and burritos are substi- that yield no useful data.
tutes. (C) minimize the likelihood that some as-
pect of the problem at hand is being over-
10. Jenny sells cupcakes at the community looked.
bake sale for $2.50 each. If it costs her
(D) focus their thinking on the essence of
$1.25 to make one cupcake, how much
the problem at hand.
profit will she make if she sells 5 cup-
cakes? 15. is the amount of money added to the orig-
(A) $5.00 inal amount due to delay of repayment.
(B) $12.50 (A) interest
6. C 7. A 8. A 9. A 10. C 11. A 12. B 13. D 14. D 15. A

(B) future worth of money 21. Ryan’s Coffee Shop earned $4, 500 in-
(C) engineering economics come last week. Expenses were $4, 900.
(D) interest rate What was Ryan’s profit or loss for the
week?
16. How many characteristics of oligopoly (A) A 9, 400 profit
market (B) B 9, 400 loss
(A) 4 (C) C 400 loss
(B) 9 (D) D 400 profit
NARAYAN CHANGDER
(C) 5
22. Unlike traditional economics, behavioral
(D) 8
economics believes that
17. Suppose televisions are a normal good (A) People behave in a rational way when
and buyers of televisions experience a de- making economic decisions
crease in income. As a result, consumer (B) People do not always behave in a ra-
surplus in the television market tional way when making economic deci-
(A) decreases sions
(B) is unchanged (C) There is no way to predict how people
(C) increases will make economic decisions
(D) may increase, decrease, or remain (D) People will always update their view-
unchanged points based on new information
23. When someone pays for something they
18. Economic models
are doing what with their money?
(A) cannot be useful if they are based on
(A) spending
false assumptions.
(B) saving
(B) were once thought to be useful, but
that is no longer true. (C) earning
(D) none of above
(C) must incorporate all aspects of the
economy if they are to be useful. 24. Which of the following is called as cold re-
(D) can be useful, even if they are not par- serve?
ticularly realistic. (A) Reserve capacity available but not
ready for use
19. how many characteristics of monopolistic
market (B) Reserve capacity available and ready
for use
(A) 2
(C) Generating capacity connected to bus
(B) 5
and ready to take load
(C) 6 (D) Capacity in service in excess of peak
(D) 7 load
20. Investments of time, effort, and money 25. Kim wants to buy the newest video game
that cannot be recovered are system. It is $200. Kim should
(A) Opportunity costs (A) BUY IT!!!
(B) Sunk costs (B) make a savings goal
(C) Relevant costs (C) ask her mom to buy it
(D) Avoidable costs (D) none of above
16. D 17. D 18. D 19. B 20. B 21. C 22. B 23. A 24. A 25. B 26. A
26. The knowledge of diversity factor helps in (C) when the price of a good rises, the
determining supply of the good falls.
(A) plant capacity (D) when the price of a good falls, the
(B) average load quantity supplied of the good rises.
(C) peak load 32. Tommy’s Tires operates in a perfectly com-
(D) kWh generated petitive market. If tires sell for $50 each
and average total cost per tire is $40 at
27. Load factor of a power station is defined
the profit-maximizing output level, then in
as
the long run
(A) maximum demand/average
(A) more firms will enter the market.
(B) average load x maximum demand
(B) some firms will exit from the market.
(C) average load/maximum demand
(C) the equilibrium price per tire will rise.
(D) (average load x maximum demand)
(D) average total costs will fall.
28. Zach charges $12.00 to wash cars and
33. Each of the following statements is an ex-
$6.00 to vacuum the inside. His expenses
ample of confirmation bias EXCEPT
are $2.00 for each car he washes. If he
washes 6 cars but only vacuums out half (A) Interpreting information to support
of them, what will be his profit? your existing beliefs
(A) $90 (B) Seeking information that challenges
your beliefs
(B) $72
(C) Only remembering details that uphold
(C) $60 your beliefs
(D) $78 (D) Ignoring information that challenges
29. How many Characteristics of perfect com- your beliefs
petition market 34. used as a medium of payment, trading pur-
(A) 4 poses and measure wealth.
(B) 9 (A) debit card
(C) 5 (B) cheque
(D) 6 (C) money
30. How many barriers to entry monoply mar- (D) gcash
ket 35. Michael observed he felt the pain of los-
(A) 5 ing a $20 bill more than he felt the joy of
(B) 3 finding it on the sidewalk the week before.
(C) 6 This is a result of
(D) 7 (A) Endowment effect
(B) Loss aversion
31. The law of supply states that, other things
(C) Sunk cost
equal,
(D) Overconfidence
(A) when the price of a good falls, the sup-
ply of the good rises 36. Power plant having maximum demand
(B) when the price of a good rises, the more than the installed rated capacity will
quantity supplied of the good rises. have utilisation factor
27. C 28. D 29. D 30. A 31. B 32. A 33. B 34. C 35. B 36. C 37. A
(A) equal to unity (D) How banks and other financial institu-
(B) less than unity tions treat you and your money
(C) more than unity
41. Where does money come from?
(A) you have to earn it
37. Profit is
(B) giving it away
(A) money left over after paying expenses
(C) spending
(B) making less money than spend on ex-
NARAYAN CHANGDER
penses (D) none of above
(C) money you make for working
42. Factors of production are
(D) none of above
(A) used to produce goods and services
38. You are doing research on a new electric
(B) also called output
car that you are interested in buying. You
only visit the car company’s website and (C) abundant in most economies
an online message board of electric car en- (D) assumed to be owned by firms in the
thusiasts to do your research. This strat- circular-flow diagram
egy may lead to
(A) Herd mentality 43. The usual value of
(B) The endowment effect (A) diversity factor is less than one and
(C) Confirmation bias demand factor is more than one
(D) Loss aversion (B) diversity factor more than one and de-
mand factor is less than is one
39. The distinction between a flow and a stock
is that (C) diversity factor as well as demand fac-
(A) A flow measures monetary values, tor is less than demand
while a stock measures real values, such (D) diversity factor as well as demand
as factory output; factor is more than one.
(B) A flow measures an account on a
monthly basis, while a stock measures it 44. Deals with the study of cashflow, interest,
on an annual basis discounting, depreciation and the value of
(C) A flow measures a quantity over a pe- money corresponding to the time period.
riod of time, while a stock measures a (A) Money
quantity at a specific moment. (B) Engineering Economy
(D) none of above
(C) Invested Money
40. What are social values, as they pertain to (D) Interest Rate
money?
(A) How you, personally, care and think 45. Hindu Numerology was discovered in
about finances which country?
(B) How your family, friends, and commu- (A) America
nity members impact your feelings about
(B) India
money
(C) How companies and advertisements (C) China
make you feel about money (D) England
38. C 39. C 40. B 41. A 42. A 43. B 44. B 45. B 46. D

46. The market demand curve (C) increases

(A) . is found by vertically adding the indi- (D) none of the above
vidual demand curves
51. Which of the following is an indicator of
(B) slopes upward.
total cost?
(C) represents the sum of the prices that
all the buyers are willing to pay for a given (A) C=f(x)
quantity of the good. (B) C= c(x)
(D) represents the sum of the quantities (C) C=f-x
demanded by all the buyers at each price (D) f=c-x
of the good.
52. Sean wants to buy a new backpack for
47. People who experience FOMO may school. Which of the following factors
(A) Save a percentage of their paycheck should he be LEAST concerned about when
each month comparison shopping?
(B) Donate money to a cause they care (A) The PRICE of the backpack
about (B) WHEN the backpack was made
(C) Go into debt to keep up with everyone (C) The QUALITY of the backpack
else (D) REVIEWS left by other consumers
(D) Create and stick to a monthly budget
53. Georgia sold $70.00 worth of crafts at
48. Long run equilibirum perfect competitive the fair. If her expenses totaled $22.35,
(A) in the long run, a monopolist will only what was her profit?
earn supernormal profits (A) $44.55
(B) In the long run, a monopolist will only (B) $42.65
earn normal profit due to the free entry
(C) $22.35
and exit
(D) $70.00
(C) firm will only earn zero economic
profit or normal profit in the long run 54. Load curve is useful in deciding the
(D) All inputs are variables in the long run (A) operating schedule of generating
49. The law of demand states that, other units
things equal, (B) sizes of generating units
(A) an increase in price causes the quan- (C) total installed capacity of the plant
tity demanded to increase. (D) all of the above
(B) an increase in price causes quantity
55. In the circular-flow diagram, in the mar-
demanded to decrease.
kets for
(C) an increase in quantity demanded
(A) goods and services, households and
causes price to increase.
firms are both sellers.
(D) an increase in quantity demanded
causes price to decrease. (B) goods and services, households are
buyers and firms are sellers.
50. In an interconnected system, the diversity (C) the factors of production, households
factor of the whole system are buyers and firms are sellers.
(A) remains unchanged (D) the factors of production, households
(B) decreases and firms are both buyers.
47. C 48. C 49. B 50. C 51. A 52. B 53. B 54. D 55. B 56. A
56. For Firm A, when four units of output are 61. is the reserved generating capacity avail-
produced, the total cost is $175 and the able for service under emergency condi-
average variable cost is $33.75. What tions which is not kept in operation but in
would the average fixed cost be if ten working order
units were produced? (A) Hot reserve
(A) $4 (B) COld reserve
(B) $10
(C) Spinning reserve
(C) $40
NARAYAN CHANGDER
(D) Firm power
(D) $135
62. A system having connected load of 100
57. In economics, decisions are necessary be-
kW, peak load of 80 kW. base load of 20
cause are scarce, while are practi-
kW and average load of 40 kW, will have
cally unlimited.
a load factor of
(A) luxuries; necessities
(A) 0.4
(B) opportunities; costs
(B) 0.5
(C) producers; consumers
(C) 0.6
(D) resources; wants and needs
(D) 0.8
58. When economists say a certain kind of
good is scarce, they mean that 63. In a system if the base load is the same
(A) it takes time or energy to acquire as the maximum demand, the load factor
will be
(B) it is desired by more than one person
(A) 1
(C) it is produced, not naturally occurring
(B) 0
(D) there is limited supply of it
(C) Infinity
59. is the quantity that tells how fast the (D) 1 percent
money is growing. usually in percent in-
terest rate per period 64. In a load curve the highest point repre-
(A) online banking system sents
(B) interest (A) peak demand
(C) online money statistics (B) average demand
(D) interest rate (C) diversified demand
60. Suppose the price of gas decreases from (D) none of the above
$2.45 to $2.25 and, as a result, the quan-
tity of gas demanded increases from 8 to 65. Yvonne spent $42.44 on materials to
12 gallons. Using the midpoint method, make bird houses and $10.75 on advertis-
the price elasticity of demand for gas in ing. She sold 3 bird houses for $35 each.
the given price range is What was her profit?
(A) 2.00 (A) $51.81
(B) 1.55 (B) $61.81
(C) 1.00 (C) $62.56
(D) 4.7 (D) $72.56
57. D 58. D 59. D 60. D 61. B 62. B 63. A 64. A 65. A 66. C
66. Good X and good Y are substitutes. If the 72. Which of the following is the LEAST
price of good Y increases, then the likely to influence a person’s financial de-
(A) demand for good X will decrease. cisions?
(B) quantity demanded of good X will de- (A) What their values are
crease (B) What their family’s needs are
(C) demand for good X will increase. (C) What their budget is
(D) quantity demanded of good X will in- (D) What their friends want
crease.
73. A monopoly firm can sell 150 units of out-
67. Coincidence factor is reciprocal of
put for $10 per unit. Alternatively, it can
(A) average load sell 151 units of output for $9.95 per unit.
(B) demand factor The marginal revenue of the 151st unit of
(C) capacity factor output is
(D) diversity factor (A) $-2.45
68. The circular-flow diagram is a (B) $-0.05
(A) visual model of the economy (C) $2.45
(B) visual model of the relationships (D) $9.95
among money, prices, and businesses
74. The three major flows in a macro economy
(C) model that shows the effects of gov-
are
ernment on the economy
(D) mathematical model of how the econ- (A) Total production, total investment and
omy works total spending
(B) Total production, total income and to-
69. High load factor indicates tal spending
(A) cost of generation per unit power is (C) Total production, total spending and
increased total savings
(B) total plant capacity is utilised for most (D) none of above
of the time
(C) total plant capacity is not properly 75. In the circular flow of income and spending
utilised for most of the time (A) Investment results in a decrease in
(D) none of the above the volume of the income flow
70. Overconfidence bias may lead the majority (B) mports result in an increase in the vol-
of Americans to think that they are ume of the income flow
(A) Above average drivers (C) Savings result in a decrease in the vol-
(B) Average drivers ume of the income flow
(C) Below average drivers (D) none of above
(D) Extremely poor drivers 76. Which of the following represent injec-
71. What is the current rate of unemployment tions into the circular flow of income and
in South Africa? spending?
(A) 25.6% (A) Government spending and imports;
(B) 34.5% (B) Imports and saving.
(C) 40.2% (C) Exports and investment
(D) none of above (D) none of above
67. D 68. A 69. B 70. A 71. B 72. D 73. C 74. B 75. C 76. C
1.6 International Economics

1. The ability to produce something using (C) Trade barriers
fewer resources than other producers is (D) Trade deficit
called having the
(A) Absolute Advantage 6. An example of a Free trade area
(B) Comparative Advantage (A) NAFTA
NARAYAN CHANGDER
(C) Better Advantage (B) EU
(D) Competitive Advantage (C) ASEAN
2. From a macroeconomic point of view, in- (D) CARICOM
creases in are an addition to aggregate
7. When one country can produce a product
demand, while increases in are a sub-
more cheaply than another country can,
traction from aggregate demand.
this is called
(A) rates of return; exchange rates
(A) a tariff.
(B) exchange rates; rates of return
(B) free trade.
(C) exports; imports
(C) comparative advantage.
(D) imports; exports
(D) absolute advantage
3. Which of the following applies to a real-
world socialistic economy? 8. This is a tax on imports that is used to in-
(A) Private ownership of all factors of pro- crease price of foreign products and raise
duction. government revenue. Sometimes we will
still by the foreign product
(B) Government ownership of all factors
of production. (A) tariff
(C) Government ownership of most of the (B) quota
factors of production. (C) subsidy
(D) Lack of central planning. (D) embargo
4. Which of the following is likely to occur 9. free trade agreements among countries in
following the depreciation of the US dollar a region
(A) US Imports will increase (A) quota
(B) US exports will increase (B) trade bloc
(C) Demand for US dollar will decrease (C) trade block
(D) US demand for foreign currencies will
(D) embargo
increase
(E) US goods will become more expensive 10. The lowering or elimination of protective
in foreign markets tariffs and other trade barriers between
two or more nations.
5. The exchange of goods, services, and/or
productive resources among individuals, (A) Free Trade
businesses, and/or governments. (B) Embargos
(A) Trade (C) Trade Barriers
(B) Trade Surplus (D) Foreign Exchange Rate
1. A 2. C 3. B 4. B 5. A 6. A 7. C 8. A 9. B 10. A 11. B
1.6 International Economics 239
11. Each country has a new infant industry to 17. Goods and services that a country pro-
promote. Countries use the infant industry duces and then sells to other countries
argument to (A) exports
(A) control money supply in the economy. (B) imports
(B) protect new industries from the es- (C) comparative advantage
tablishment of foreign competitors. (D) absolute advantage
(C) avoid structural unemployment.
(D) reduce inflation problems. 18. What are taxes a country places on prod-
ucts as they cross its borders?
12. Goods and services one country BUYS (A) Laws
from another country. (B) Quotas
(A) Imports (C) Tariffs
(B) Exports (D) none of above
(C) Trade
19. A limit on the number of cars that can be
(D) National Purchase
brought into the country
13. NAFTA is an agreement between all of the (A) import quota
following countries EXCEPT (B) tariff
(A) United States (C) customs duty
(B) Mexico (D) voluntary export constraint
(C) Great Britain
20. A tax placed on goods imported into a
(D) Canada country
14. This is a tax on imports that is used to in- (A) Quota
crease price of foreign products and raise (B) Tariff
government revenue. (C) Embargo
(A) tariff (D) Subsidy
(B) quota
21. In the classical model of Ricardo, the direc-
(C) subsidy tion of trade is determined by:
(D) embargo (A) absolute advantage
15. A tax on imported goods. (B) comparative advantage
(A) Embargo (C) physical advantage
(B) Subsidy (D) which way the wind blows
(C) Tariff 22. It is correct to say that countries within a
(D) Quota customs union have
(A) Common external barriers
16. An example of a Monetary Union
(B) Common currency and a common cen-
(A) NAFTA tral bank
(B) EU (C) Common policies on product regula-
(C) ASEAN tion.
(D) CARICOM (D) None of the above
12. A 13. C 14. A 15. C 16. B 17. A 18. C 19. A 20. B 21. B 22. A 23. B
23. NAFTA is a trade agreement between (B) The specializing country behaving as
which of the following countries? a monopoly
(A) the United States, Cuba, and Brazil. (C) Smaller production runs resulting in
(B) the United States, Canada, and Mex- lower unit costs.
ico. (D) High wages paid to foreign workers
(C) the United States, Puerto Rico, and
Cuba. 29. Currency depreciation results in
(D) Brazil, Bolivia, Peru, and Columbia.
NARAYAN CHANGDER
(A) Increased exports, increased imports
24. When one country refuses to trade with (B) Decreased exports, decreased im-
another country because of political or in- ports
fringements of human rights it is called: (C) Increased exports, decreased im-
(A) standard of care ports
(B) subsidysubsidy (D) Decreased exports, increased im-
(C) embargo ports
(D) revenue tariff
30. Comparative advantage refers to the idea
25. Karl Marx published which of the follow- that countries should
ing books?
(A) produce the goods they make with the
(A) Das Kapital
highest quality.
(B) General Theory of Communism
(B) produce the goods they can produce
(C) Wealth of Nations the fastest.
(D) Capitalist Manifesto
(C) produce the goods for which the op-
26. Which of the following is a characteristic portunity cost is the lowest relative to
of capitalism? other countries’ costs.
(A) Equality of income. (D) produce the same goods and ex-
(B) Government decision-making is pre- change a little of each while keeping some
ferred to decentralized decision-making. for themselves
(C) Market determination of prices and
quantity. 31. Import means
(D) Government ownership of all capital. (A) Buying goods from another country
(B) Selling goods to another country
27. Who are the main trading partners of the
US? (C) Only making one kind of product
(A) Germany, Great Britain, China, and (D) none of above
France
(B) the Central American countries 32. When Mataeo buys Euros through , he
(C) Canada, Mexico, and China will use his U.S. dollars to pay for them.
(D) the Middle Eastern countries (A) the foreign exchange market
(B) the currency exchange market
28. A main advantage of specialization results
from: (C) a floating exchange market
(A) Economics of large scale production (D) foreign currency market
24. C 25. A 26. C 27. C 28. A 29. C 30. C 31. A 32. A 33. B
33. In 1962, the United States sanctioned (D) determine the price of one country’s
Cuba and prohibited all imports and ex- currency in terms of another country’s
ports to and from Cuba. This is an example currency.
of which trade barrier?
38. Why does the United States need to im-
(A) A sanction implemented as a tariff port products?
(B) A sanction implemented as an em- (A) The US does not import products
bargo (B) Some are easier and cheaper to make
(C) A sanction implemented as a quota in other countries
(D) A sanction implemented as a stan- (C) The US makes all of its own products
dard (D) none of above
34. The Heckscher-Ohlin theory explains com- 39. Which of the following would be a reason
parative advantage as the result of differ- for the United States to place an embargo
ences incountries’: on a particular country?
(A) Economies of large-scale production. (A) Human Rights Violations
(B) Relative abundance of various re- (B) Nuclear programs/projects
sources. (C) Links to Terrorism
(C) Relative costs of labor. (D) All of the above
(D) Research and development expendi- 40. The difference between money paid to,
tures. and received from, other nations in trade
is BEST described as
35. In an effort to bring down the government
(A) balance of trade
of Cuba, the US adopted a policy of refus-
(B) absolute advantage
ing to trade with Cuba. This is called
(C) balance of payments
(A) a tariff
(D) comparative advantage
(B) a negative trade balance
(C) an embargo 41. An increase in the international value of
United States dollar will tend to cause
(D) a trade treaty
(A) United States exports to fall
36. Internal trade is also called as (B) the national income of the United
(A) Home trade States to increase
(B) Domestic trade (C) employment in the manufacturing sec-
tor of the United States to increase
(C) Inter-regional trade
(D) the inflation rate in the United States
(D) All the above to increase
37. An exchange rate is used to (E) the growth rate of the United States
economy to increase
(A) promote the argument supporting
free trade. 42. Goods or services that a country buys
(B) promote the use of subsidies on for- from other nations.
eign goods. (A) Duty
(C) determine the price of one country’s (B) Tariff
imports in terms of another country’s im- (C) Export
ports. (D) Import
34. B 35. C 36. D 37. D 38. B 39. D 40. C 41. A 42. D 43. A
43. Tariffs and Quotas can benefit nations im- 48. Promotes free trade within 10 Southeast
posing them by Asian countries.
(A) Raising revenue (A) NAFTA
(B) increasing variety of goods (B) ASEAN
(C) lowering prices (C) EU
(D) Free Trade
(D) increasing consumption
49. In economics, natural sunlight is classified
NARAYAN CHANGDER
44. Purchasing the right to use a company as a free good. What is the reason for
name or business process in a specific way this?
ex. McDonald’s, Burger King, KFC and
(A) Sunlight is a gift of nature
Pizza Hut * *
(B) Sunlight is a renewable resource
(A) Licensing
(C) There is no opportunity cost of using
(B) Joint venture sunlight
(C) Franchising (D) Unlimited amounts of sunlight can be
(D) Infrastructure consumed.
45. Which statement BEST reflects the differ- 50. What is a quota?
ence between tariffs and quotas? (A) A government order to stop trade.
(A) Tariffs raise prices on exports, while (B) A limit placed on imports.
quotas set limits on imports. (C) A tax placed on imports.
(B) Tariffs raise prices on imports, while (D) none of above
quotas set limits on exports.
51. Higher income levels in the US would re-
(C) Tariffs raise prices on exports, while sult in
quotas set limits on exports.
(A) Increased exports and appreciation
(D) Tariffs raise prices on imports, while of the US Dollar
quotas set limits on imports.
(B) Increased exports and depreciation
of the US dollar
46. International trade MOST OFTEN takes
place because of differences in (C) Increased imports and appreciation
of the US Dollar
(A) absolute advantage
(D) Increased imports and depreciation
(B) trade barriers of the US Dollar
(C) exchange rates
52. Good and services produced at home and
(D) comparative advantage
sold in other countries
47. The measure of the price of one nation’s (A) Imports
currency in terms of another nation’s cur- (B) Exports
rency is a/n (C) Specialization
(A) appreciation (D) Globalization
(B) depreciation 53. Financial Account transactions include
(C) exchange rate items such as
(D) floating exchange rate (A) Imports
44. C 45. D 46. D 47. C 48. B 49. C 50. B 51. D 52. B 53. D 54. A
(B) Exports 59. International trade that occurs with little

(C) Transfers & Remittances to no restriction is BEST described as
(D) Purchase and sale of stocks and (A) free trade
bonds (B) protectionism
54. The US bans beef imports from Canada (C) trade barriers
after a Mad Cow Disease outbreak there. (D) trade surplus
This is an example of which type of barrier
to trade? 60. NAFTA BEST represents the controversy
that exists over
(A) Standards
(A) scarcity
(B) Quota
(B) embargoes
(C) Subsidy
(C) debt
(D) Tariff
(D) trade barriers
55. Which of the following is not a benefit of
trade between nations? 61. Suppose the exchange rate between the
(A) More stuff US and Japan changes from $1 USD = 100
Yen to $1 USD = 110 yen because the dol-
(B) Better stuff
lar has increased in value. What would
(C) cheaper stuff happen to the prices of American goods in
(D) similar stuff Japan?
56. Currency depreciation could be caused by (A) They could increase or decrease
(A) Supply Increase or Demand Increase (B) The will remain the same
(B) Supply Increase or Demand Decrease (C) They will decrease
(C) Supply Decrease or Demand De- (D) They will increase
crease
62. According to the law of comparative ad-
(D) Supply Decrease or Demand In- vantage, a country should
crease
(A) Specialize and export goods with the
57. An agreement between two or more com- lowest production cost
panies to share a business project-this (B) Specialize and export goods with the
business is on a limited basis for control lowest opportunity cost
(A) Licensing (C) Specialize and export goods with the
(B) Joint venture lowest average cost
(C) Franchising (D) Specialize and export goods with the
(D) Infrastructure highest opportunity cost
58. To focus on producing one thing or spe- 63. Allows for free trade of many goods
cific product and to improve productivity among United States, Canada, and Mex-
is known as: ico.
(A) Specialization (A) NAFTA
(B) International trade (B) ASEAN
(C) Absolute Advantage (C) EU
(D) Supply and Demand (D) Free Trade
55. D 56. B 57. B 58. A 59. A 60. D 61. D 62. B 63. A 64. B
64. Refers to the unrestricted flow of goods, (B) Industrialized

services, and productive resources be- (C) Industrialized
tween countries.
(D) Developing
(A) Trade
(B) Free Trade 70. The sales and exchange of goods and ser-
vices between a buyer and a seller.
(C) Trade Barriers
(D) Balance of Trade (A) Imports
(B) Exports
NARAYAN CHANGDER
65. An economy with foreign trade is known (C) -
as
(A) a laissez faire economy.
(B) an open economy. 71. The nation’s ability to produce general
(C) a close economy. goods more efficiently than another entity
is referred to as?
(D) a planned economy.
(A) Specialization
66. The term is used to describe what (B) Comparative Advantage
those in one country buy from those in (C) Opportunity Cost
other countries.
(D) Absolute Advantage
(A) exports
(B) imports 72. Which statement explains why the pay of
(C) trade doctors is usually higher than the pay of
nurses?
(D) surplus
(A) Doctors have a higher opportunity
67. Tax placed on imported goods that will cost in qualifying
generate revenue without prohibiting im- (B) Doctors have a more elastic supply
ports than hospital cleaners.
(A) trade deficit (C) Hospital cleaners belong to trade
(B) quota unions with stronger bargaining powers
(C) balance of payments (D) Hospital cleaners have a more inelas-
(D) revenue tariff tic demand than doctors
68. How many areas did the RBI hand over to 73. The US and Canada have been experienc-
NPCI the responsibility of finding solutions ing a conflict over US restrictions on im-
in? ported softwood lumber. Who would be
(A) 2 MOST LIKELY to support the US restric-
tions?
(B) 3
(A) Canadian lumber firms
(C) 4
(B) US new home buyers
(D) 5
(C) US lumber importers
69. If a country has low literacy levels, little (D) US lumber firms
to no technology and focuses on agricul-
ture or mining, that country is considered 74. Which of the following is NOT a trade bar-
to be: rier?
(A) Less-developed (A) an embargo
65. B 66. B 67. D 68. B 69. A 70. C 71. D 72. A 73. D 74. C
(B) a quota 80. International economics is an applied

(C) a free trade agreement branch of economics
(D) a tariff (A) Micro
(B) Macro
75. :Ability to produce a good/service at
a lower O.C. than competitor. (C) Behavioural
(A) Opportunity Cost (D) Financial
(B) Absolute Advantage
81. The difference between import tariffs and
(C) Comparative Advantage quotas is:
(D) none of above (A) tariffs are a tax on locally produced
76. A combination of things that limit the goods but quotas limit the quantity of im-
flow of goods, services, and productive re- ports
sources between countries (B) tariffs are a tax on imports and quo-
(A) Trade barriers tas are a tax on exports
(B) Trade Surplus (C) tariffs are a tax on imports and quo-
tas limit the quantity of imports
(C) Trade deficit
(D) Balance of trade (D) tariffs are a tax on all products but
quotas just limit the quantity of imports
77. A quota is
(A) an official ban on trade. 82. What do you need to produce other goods
and services?
(B) a limit on or a specific number of im-
ports allowed. (A) consumer goods
(C) a law that promotes safety. (B) capital goods
(D) a tax on imports. (C) nondurable goods
(D) Gross Domestic Product (GDP)
78. A country being able to make a product
or service at a lower cost than other coun- 83. What Trade barrier is beneficial to both do-
tries is considered? mestic producers and domestic consumers
(A) Absolute advantage of a good?
(B) Concerning advantage (A) subsidy
(C) Comparative advantage (B) quota
(D) Available advantage (C) embargo
79. Which BEST describes exchange rates? (D) tariff
(A) the difference between the total num-
84. An exchange rate is the number of units
ber of exports minus the number of im-
of:
ports
(B) the price of ones nation’s currency in (A) a nation’s money that is equal to one
terms of another nation’s currency unit of another nation’s money.
(C) an interest rate charged to con- (B) a nation’s output that is equal to one
sumers who take out a loan unit of another nation’s output.
(D) an increase in the price of a market (C) gold backing a nation’s money.
basket over a given time period (D) none of these.
75. C 76. A 77. B 78. A 79. B 80. B 81. C 82. B 83. A 84. A 85. A
85. Mill’s Theory of reciprocal demand was de- 90. A government payment that supports a
veloped with the illustration of two coun- business or market.
tries (A) Tariff
(A) England and Germany (B) Standards
(B) Germany and U.S.A (C) Embargo
(C) U.K and U.S.A (D) Subsidy
(D) none of above 91. the main benefits of free trade include
NARAYAN CHANGDER
(A) peace, better choice, prices and qual-
86. A country’s ability to produce a given
ity
product with greater output per unit of in-
put than another country (B) less imports because they cant pene-
trate strong markets
(A) exports
(C) the sharing of the world s resources
(B) imports
(D) greater benefits for less developed
(C) comparative advantage economies as they can trade more
(D) absolute advantage
92. Limit of the amount of a good that can be
87. is the making, buying, and selling of imported
products within a country (A) Subsidy
(A) International business (B) Quota
(B) Global economy (C) Exports
(C) Domestic business (D) Appreciation
(D) none of above 93. One potential advantage for a country of

encouraging a multinational business to
88. A type of trade restriction that sets a set up is that it will:
physical limit on the quantity of a good (A) always create more jobs than might
that can be imported into a country in a be lost
given period of time.
(B) keep all of the profits made within the
(A) Subsidy country
(B) Quota (C) not compete with the existing national
(C) Embargo businesses
(D) Tariff (D) pay taxes to the government
94. When was NPCI founded?

89. Liberals believe that:
(A) 2008
(A) Relative and absolute gains are
equally important (B) 2006
(C) 2007
(B) Relative gains are more important
than absolute gains (D) 2009
(C) Absolute gains are more important 95. Which of the following is a likely result
than relative gains of a depreciation of the Japanese yen (cur-
(D) Discussion or relative and absolute rency) against other currencies?
gains is unnecessary (A) Japan will export more goods.
86. D 87. C 88. B 89. C 90. D 91. A 92. B 93. D 94. A 95. A 96. A
(B) Japan will import more goods. 101. Climate and terrain are two examples of
(C) Japan will increase protectionism. conditions that influence international
(D) Japan will experience an embargo business.
(A) cultural and social
96. When a country exports more than it im-
(B) geographic
ports, it has a
(C) economic
(A) trade surplus.
(B) trade deficit. (D) political and legal
(C) comparative advantage. 102. Terms of trade is defined as
(D) absolute advantage. (A) a statistic that measures the
97. Goods and services one country SELLS to weighted average of export prices
another country. (B) an index that measures the terms of
(A) Imports trade in a nation
(B) Exports (C) a statistic that measures the
(C) Trade weighted average of export prices divided
by import prices
(D) a statistic that measures the ratio of
98. A country that can produce a good using exports to import
fewer resources than another country has
a(n): 103. Globalisation is best defined as
(A) lower opportunity cost of producing (A) increased international trade as a re-
the good than another country. sult of free movement of goods and capital
(B) absolute advantage. between countries
(C) specialization in the production of the (B) a situation where all of the world uses
good. the same common currency
(D) all of these. (C) the growing trend for companies to
stop making products within their own
99. . A Customer Service Representative is country
a product created by what type of re-
(D) the increase in the world tourist in-
source?
dustry leading to more global travel
(A) Capital
(B) Land 104. The United States EXPORTS
(C) Labor (A) Kangaroos
(D) none of above (B) Airplanes
100. The definition of the exchange rate of a (C) Cocoa Beans
currency is: (D) none of above
(A) the price level in the country
105. In the short-run, tariffs and quotas help
(B) the rate at which imports can be protect
bought from export revenue
(A) domestic jobs
(C) the price of one currency in terms of
how much it buys of another (B) foreign employment
(D) the price of a currency in terms of the (C) price wars
goods that can be bought with it (D) consumer choice
97. B 98. B 99. C 100. C 101. B 102. C 103. A 104. B 105. A 106. B
106. Which of the following defines balance (A) Currency appreciation

of trade? (B) Currency depreciation
(A) The prohibition of free trade (C) Currency devaluation
(B) The difference between amount ex- (D) None of these
ported and amount imported
(C) The need for all countries to partici- 112. An agreement that will eliminate all tar-
pate in trade equally iffs and other trade barriers is an example
(D) The law requiring fair trade among all of a
NARAYAN CHANGDER
countries (A) Free Trade area
107. A strong dollar helps (B) common market
(A) An American traveling to a foreign (C) customs union
country (D) monetary union
(B) Businesses that export goods
113. Those in favor protectionist trade poli-
(C) The foreign exchange rate
cies would MOST likely
(D) Competition among foreign competi-
(A) Support a rediction in tariffs
tors
(E) The strength of the European Union (B) Argue against trade barriers
(C) Argue for trade barriers
108. Which of the following represents a fi-
(D) believe that trade restrictions harm
nancial inflow to the U.S. economy?
consumers.
(A) returns paid on U.S. financial invest-
ments in Switzerland 114. What kind of economic integration ar-
(B) computer chip imports from Israel rangement has common policies on product
(C) oil imports from Canada regulation, and free movement of goods,
services, capital and labour?
(D) foreign aid from the U.S. to Ethiopia
(A) Common markets
109. Completely bans trade with a country, (B) Preferential trading area
usually due to political disputes.
(C) Free trade areas
(A) Tariff
(D) Custom unions
(B) Quota
(C) Embargo 115. The main benefit of free trade between
(D) Subsidy two countries is that
(A) income distribution in each country
110. A subsidy is
will become more equitable
(A) a cash grant or loan from the govern-
(B) employment in each country will in-
ment to support the business.
crease
(B) a law that promotes safety.
(C) migration from one country to the
(C) a tax on imports. other will increase
(D) a specific number of imports allowed.
(D) each country can consume beyond its
111. When domestic currency gain its value in constraints of resources and productivity
relation to a foreign currency in the inter- (E) each country will become more self-
national money market, it is a situation of: sufficient
107. A 108. A 109. C 110. A 111. A 112. A 113. C 114. A 115. D 116. C
116. Who will be hurt by a tariff on medicine 122. What is the increase in the value of a cur-
coming into the US. rency?
(A) US medical companies (A) Exchange rate
(B) US government revenue (B) Recession
(C) Sick people in US (C) Depreciation
(D) none of above (D) Appreciation
117. Placing taxes on imported shoes from 123. Which of the following would most likely
Vietnam is an example of a be included in the negative side of the cur-
(A) Balanced budget rent account balance?
(B) trade barrier (A) money earned by Canadian firms in
(C) trade surplus the U.S.
(D) monetary policy (B) money spent by Canadian tourists in
the U.S.
118. ASEAN is a trade bloc made of southeast- (C) returns paid to U.S. investors in South-
ern nations. east Asia
(A) African (D) European aid sent to the U.S. to fund
(B) Australian the Iraq war
(C) Asian
124. Floating exchange rates are determined
(D) none of above by
119. When a nation imports more than it ex- (A) supply and demand
ports, economists say it has which of the (B) the President of the United States
following? (C) the central bank
(A) A trade surplus (D) the stock of gold reserves
(B) A balance of trade
(C) A trade deficit 125. From April 2021, which new subsidiary
did NPCI create to increase growth espe-
(D) A national difference
cially in the business to consumer segment
120. A person or organization that uses a for small businesses?
product or service is a(n): (A) NPCI International Payments Limited
(A) consumer (NIPL)
(B) economist (B) NPCI Bharat BillPay Limited (NBBL)
(C) loan shark (C) Bharat Bill Payment System (BBPS)
(D) debtor (D) Indian Bank’s Association (IBA)
121. Which of the following trade barriers is 126. To say that net exports are negative is
a block on trade with another country? the same as saying that
(A) Tariff (A) there is a capital account deficit.
(B) Embargo (B) there is a budget deficit.
(C) Quota (C) the exchange rate has depreciated.
(D) Standards (D) there is a current account deficit.
117. B 118. C 119. C 120. A 121. B 122. D 123. A 124. A 125. C 126. D 127. D
128. A
127. Tax placed on imports to increase their (B) Absolute Advantage

price in the domestic market (C) Comparative Advantage
(A) dumping (D) none of above
(B) protectionists
133. All of these restrict international trade
EXCEPT
(D) tariff
(A) quotas
128. A trade surplus is generally known as a (B) subsidies
NARAYAN CHANGDER
(A) positive balance of trade. (C) embargoes
(B) negative balance of trade. (D) trade deficits
(C) positive balance of payments.
134. A nation’s ability to produce goods more
(D) negative balance of payments. efficiently than another entity is referred
to as?
129. If the U.S. government uses an expan-
sionary monetary policy to reduce interest (A) Specialization
rates, then it will: (B) Comparative Advantage
(A) lead to higher imports and lower ex- (C) Opportunity Cost
ports. (D) Absolute Advantage
(B) cause the exchange rate for U.S. cur-
rency to depreciate. 135. Gross Domestic Product (GDP) is:
(C) lower levels of consumption and in- (A) The measure of the amount of money
vestment. a country owes to other countries.
(D) cause the exchange rate for U.S. cur- (B) The measure of the difference be-
rency to appreciate. tween what a country sells versus what a
country buys from other countries
130. A country that concentrates on producing (C) The measure of the output of products
and selling one particular product demon- created within a country
strates this concept (D) none of above
(A) specialization
136. Coming into effect in 1994, NAFTA en-
(B) quotas
couraged free trade between the United
(C) absolute advantage of trade States and which two other countries?
(D) cartel (A) canda and cuba
131. This is the most restrictive of the trade (B) japan and china
restrictions a nation can use to close off all (C) Canada and mexico
importation of a product. (D) panama and brazil
(A) tariff
137. The difference between money paid to,
(B) quota
and received from, other nations in trade
(C) subsidy is the
(D) embargo (A) balance of trade
132. :The highest valued alternative that (B) absolute advantage
is given up to engage in activity. (C) balance of payments
(A) Opportunity Cost (D) comparative advantage
129. B 130. A 131. D 132. A 133. D 134. D 135. C 136. C 137. C 138. A
138. Ireland imports bananas from Ghana. 144. Which economic actor would most likely
The bananas would BEST be described as not support free trade?
(A) imports (A) Nike
(B) exports (B) McDonalds
(C) embargos (C) Coastal Lumber Company
(D) trade barriers (D) Coca-Cola
139. A name for money used in economics.
145. In most cases, tariffs and quotas harm
(A) Cash consumers by causing
(B) Scratch (A) higher prices and fewer choices
(C) Moolah
(B) higher unemployment
(D) Currency
(C) surplus and waste
140. What limits the amount of products im- (D) unexpected deflation
ported
(A) Tariff 146. In a command economy, the basic eco-
nomic questions are answered by:
(B) Quota
(C) Embargo (A) individuals and sellers
(D) Trade ceiling (B) the traditional methods
(C) central planners
141. The most likely reason why some gov-
(D) none of these
ernments impose tariffs on imported
goods is: 147. Not trading with nations who create
(A) to reduce the rate of inflation products using child labor is used in the ar-
(B) to increase employment in foreign gument for
countries (A) Domestic Jobs
(C) to reduce the Balance of Payments (B) National Defense
(D) to increase output in their own coun- (C) Human Rights
tries
(D) Environment
142. A US businesses arguing for a trade bar-
rier that would increase their business rev- 148. reduces trade barriers and encour-
enue is MOST LIKELY to lobby for which of ages trade between countries.
the trade barriers? (A) Free-trade zones
(A) tariff (B) Free-trade agreements
(B) monopoly (C) non-tariff alliances
(C) quota (D) Common markets
(D) standards
149. If $1.00 U.S. bought $1.40 Canadian dol-
143. If I am better at all types of production, lars in 2006 and in 2010 it bought $1.00
I have the in all forms of prodcution. Canadian dollar, then;
(A) Comparative Advantage (A) the U.S. dollar appreciated against
(B) Absolute Advantage the Canadian dollar.
(C) Specialization (B) the Canadian dollar weakened
(D) Developed nation against the Canadian dollar.
139. D 140. B 141. D 142. C 143. B 144. C 145. A 146. C 147. C 148. B 149. D
(C) the U.S. dollar strengthened against (C) one unit of it buys less of a foreign cur-
the Canadian dollar. rency than before
(D) the Canadian dollar appreciated (D) the country’s exports will become
against the U.S. dollar. more expensive
150. What is the name of a company that does 155. A country can have an increased surplus
business and has facilities in many coun- in its balance of trade as a result of
tries? (A) an increase in domestic inflation
NARAYAN CHANGDER
(A) World Business (B) declining imports and rising exports
(B) Multinational Corporation (C) higher tariffs imposed by its trading
(C) World Power partners
(D) None of the above (D) an increase in capital inflow
(E) an appreciating currency
151. Safety, environmental, health, or other
technical requirements set by a govern- 156. China is known as:
ment. Imports must meet these require- (A) The red invasion
ments before they are allowed to come (B) The communist threat
into the country.
(C) The world’s factory
(A) Standards
(D) The best economic system
(B) Subsidy
(C) Quota 157. Exports minus imports or how many
(D) Tariffs goods a county exports versus imports
(A) Exports
152. War and unlawful activity are two exam- (B) Subsidy
ples of conditions that influence inter-
(C) Quotas
national business.
(D) Balance of Trade
(A) geographic
(B) economic 158. When one country can produce a product
(C) political and legal at a lower opportunity cost than another
country, this is called
(D) none of above
(A) a tariff.
153. A persistent trade imbalance tends to (B) free trade.
a country’s dollar. (C) comparative advantage.
(A) increase (D) absolute advantage
(B) reduce
(C) raise 159. Top 5 two-way trading partners in 2018
(D) devalue (A) China, Japan, United States, Republic
of Korea, India
154. When an exchange rate of a currency de- (B) United States, China, Japan, Republic
preciates it means that: of Korea, India
(A) one unit of it buys more of a foreign (C) United States, China, India, Japan,
currency than before Republic of Korea
(B) the price level in that country has (D) China, United States, Japan, Republic
fallen of Korea, India
150. B 151. A 152. C 153. D 154. C 155. B 156. C 157. D 158. C 159. A 160. D
160. What are tariffs? 165. The relationship between the value of a
(A) political boundaries between nations country’s exports and the value of its im-
ports.
(B) military blockades of specific coun-
tries (A) Trade Deficit
(B) Trade Surplus
(C) disputes between state governments
over boundaries (C) Balance of Trade
(D) taxes on the import or export of goods (D) Balance of Payments
from a country 166. Which is a benefit of the U.S. dollar
weakening against the Euro?
161. An office building is a product created by
what type of resource? (A) Americans will buy more European
made cars.
(A) Capital
(B) People will buy more European goods
(B) Labor in the U.S.
(C) Land (C) Europeans will travel to the U.S. be-
(D) none of above cause it will be a better bargain.
(D) Americans will travel more to Euro-
162. The current transfer includes the follow- pean destinations.
ing items EXCEPT
(A) gift. 167. One advantage to the business of becom-
ing a multinational is that:
(B) military aid.
(A) it will be able to produce goods closer
(C) financial aid.
to each country’s market
(D) investment (B) it will have fewer factories and oper-
ating bases
163. Country X can manufacture a particu-
lar product better and at a lower cost (C) communication will be easier within
than country Y can.What conclusion can be the business
drawn from this situation? (D) it will tend to produce the same basic
product for markets throughout the world
(A) Country X has solved the problem of
scarcity. 168. The field of international political econ-
(B) Country X should discontinue making omy:
that product. (A) Examines the relationship between
(C) Country Y should try to produce the national and international politics
same product. (B) Examines the relationship between
(D) Country X should sell that product to economics and politics
Country Y. (C) Draws upon disciplines such as his-
tory, political science, economics, and so-
164. A situation in which a nation exports ciology
more goods and services than it imports. (D) All of the above
(A) Balance of Payments
169. terms of trade is calculated by multi-
(B) Trade Surplus
plying the commodity terms of trade index
(C) Trade Deficit by productivity changes in domestic export
(D) Balance of Trade industries
161. A 162. D 163. D 164. B 165. C 166. C 167. A 168. D 169. C

(A) Gross Barter 174. A good that is sent to another country

(B) Double Factoral for sale
(C) Single Factoral (A) export
(D) none of above (B) import
(C) quota
170. If a country has a bowed out (concave to (D) subsidy
the origin) production possibility frontier,
thenproduction is said to be subject to: 175. An agreement that will eliminate trade
NARAYAN CHANGDER
(A) constant opportunity costs. barriers as well as the barriers for the
flow of FOP is an example of a
(B) decreasing opportunity costs.
(A) Free Trade area
(C) first increasing and then decreasing
opportunity costs. (B) Preferential trade area
(D) increasing opportunity costs. (C) customs union
(D) common market
171. What was the name of the roadmap RBI
called? 176. requirements a good must meet before it
can enter the country as an import.
(A) Financial Sector Computing Vision
Document (2005) (A) Free Trade
(B) Financial Sector Science Vision Docu- (B) Standard
ment (2005) (C) Subsidy
(C) Financial Sector Technology Vision (D) National Security
Document (2005)
177. Country A can produce 10 apples or 3
(D) Financial Sector Telecommunications oranges.Country B can produce 12 apples
Vision Document (2005) and 3 oranges.Which country has an abso-
lute advantage?
172. If the Malaysia ringgit (RM) is said to be
depreciated relative to the U.S dollar, then (A) A
the dollar (B) B
(A) will be less expensive to Malaysians. (C) Neither
(B) will appreciate relative to Malaysian (D) Both
ringgit.
178. The Malaysian government buys a new
(C) will depreciate relative to Malaysian Boeing 787 from the U.S. This transaction
ringgit. is recorded as
(D) either will appreciate or depreciate (A) current account
relative to Malaysian ringgit.
(B) financial/capital account
173. Which of the following is the gain to na- (C) official reserves
tions from international trade? (D) none of above
(A) The world output will increase
179. According to the factor endowment
(B) Greater advancement in technology. model of Heckscher and Ohlin, countries
(C) Widened choices to the domestic heavily endowedwith land will:
trade. (A) Devote excessive amounts of re-
(D) All the above. sources to agricultural production.
170. D 171. C 172. B 173. D 174. A 175. D 176. B 177. B 178. A 179. C
(B) Devote insufficient amounts of re- 185. Comparative advantage is determined

sources to agricultural production. by:
(C) Export products that are land- (A) actual differences in labor productiv-
intensive. ity between countries.
(D) Import products that are land- (B) relative differences in labor produc-
intensive. tivity between countries.
180. What is the GDP of the U.S.? (C) both (a) and (b)
(A) 5 Trillion Dollars (D) neither (a) nor (b)
(B) 12 Trillion Dollars
(C) 1 Trillion Dollars 186. Who was know as the father of modern
(D) 18 Trillion Dollars economics and believed in capitalism?
(A) Karl Marx
181. The principal objective of WTO is to:
(A) reduce the level of all tariffs and en- (B) Adam Smith
courage trade (C) Robert Smith
(B) to increase tariffs on all imported (D) Jeffrey Sachs
goods
(C) prevent the trading of services across 187. The value of a nations currency in rela-
nations’ borders. tion to a foreign currency.
(D) encourage countries to establish quo- (A) Equilibrium Rate
tas.
(B) Export Rate
182. Which of the following organizations is (C) Exchange Rate
MOST LIKELY a supporter of free trade?
(D) Import Rate
(A) the United Steelworkers of America
(B) Coca-Cola Corporation 188. refers to a world economy with move-
(C) the Anti-Globalization Coalition ment of products and labor across interna-
(D) US electronics producers tional borders.
(A) Global economy
183. A good is a product that you can see
and touch. (B) Domestic business
(A) spiritual (C) International business
(B) imitation (D) none of above
(C) physical
(D) imaginary 189. Foreign debt is
184. System under which the price of one cur- (A) The measure of the output of prod-
rency remains unchanged in relation to the ucts created within a country
value of another currency (B) The measure of the difference be-
(A) dumping tween what a country sells versus what a
(B) protective tariff country buys from other countries
(C) fixed exchange rate (C) The measure of the amount of money
(D) North American Free Trade Agree- a country owes to other countries.
ment (D) none of above
180. D 181. A 182. B 183. C 184. C 185. B 186. B 187. C 188. A 189. C 190. B
190. One possible disadvantage to businesses (C) Absolute Advantage

of globalisation is that: (D) Positive Net Export
(A) all products will become more expen-
sive 195. Trade allows each country to take advan-
(B) there will be more international com- tage of in the other country.
petition (A) economies of scale
(C) there will be less choice and variety (B) lower opportunity costs
for their consumers
NARAYAN CHANGDER
(C) specialization
(D) they will tend to produce on a small
scale and this will raise costs (D) worker productivity
191. China has a pegged exchange rate which 196. When the Japanese Yen decreases in
means value relative to another currency, it has
(A) it always keeps below US $ and main- (A) Appreciated
tains its advantage in trade (B) Depreciated
(B) it is part fixed and part floating de-
(C) Fixed
pending on world events
(D) Floated
(C) it is pegged to currency in Asia so that
CVhina maintains its dominance (E) Inflated
(D) all of these options
197. Labor, human capital, entrepreneurship,
192. Which of the following is international natural resources, and capital are all ex-
trade? amples of which of the following?
(A) Trade between countries (A) Outputs
(B) Trade between regions (B) Substitutes in Production
(C) Trade between provinces (C) Absolute Advantage
(D) Both (b) and (c) (D) Factors of Production
193. Currently, the foreign exchange rate for
198. A trade agreement between 27 countries
all world currencies is
of with the same currency and open trade
(A) fixed exchange rate, based on the U.S. between those nations.
dollar.
(A) NAFTA
(B) a floating exchange rate, based on the
U.S. dollar. (B) EU
(C) a fixed exchange rate, based on mar- (C) WTO
ket forces of supply and demand. (D) ABC
(D) a floating exchange rate, based on
market forces of supply and demand. 199. Promotes free trade within the 28 Euro-
pean member countries.
194. When a country has the ability to pro-
(A) NAFTA
duce a product at a lower opportunity cost
than another country. (B) ASEAN
(A) Comparative Advantage (C) EU
(B) Favorable Advantage (D) Free Trade
191. A 192. A 193. D 194. A 195. B 196. B 197. D 198. B 199. C 200. A 201. A
200. decrease in value of one currency rela- (A) NAFTA

tive to the other (B) ASEAN
(A) depreciation (C) EU
(B) appreciation (D) none of above
(C) quota
(D) none of above 206. Higher interest rates
(A) Make foreigners decide to buy more
201. Infant industries can be helped in the of a country’s government bonds
world market by giving those industries a (B) Attracts portfolio flows to a country
(A) subsidy (C) Controls inflationary pressures
(B) quota (D) All the above
(C) embargo
(D) tariff 207. A good or service brought in from an-
other country for sale.
202. A protective tariff is intended to protect (A) import
the (B) export
(A) consumer from higher prices on for-
(C) tariff
eign goods.
(D) none of above
(B) consumer from higher priced domes-
tic goods 208. limit the flow of goods, services, and
(C) manufacturers from higher prices on productive resources between countries.
domestic materials used in their products (A) trade surplus
(D) manufacturers from lower priced (B) trade barriers
goods imported into the country. (C) balance of trade
203. The buying and selling of goods and ser- (D) none of above
vices within your own country.
209. This occurs when imports and exports
(A) Commerce
are equal
(B) Business
(A) Happy Countries
(C) Sales
(B) Trade Equality
(D) Domestic Trade
(C) Trade Balance
204. If we export more than we import, we (D) Trade Domination
are said to have a balance of trade. If
we import more we are said to have a 210. Importance of the study of International
dollar economicsSelect the wrong one
(A) favorable, weak (A) Optimum use of resources
(B) unfavorable, weak (B) Growth and development
(C) favorable, strong (C) Greater choice for consumers
(D) unfavorable, strong (D) Currency minting
205. An agreement among the United States, 211. Current account in the Malaysian Balance
Canada and Mexico designed to remove of Payment (BOP) contains
tariff barriers between the three coun- (A) receipts and payments on goods and
tries. services.
202. D 203. D 204. C 205. A 206. D 207. A 208. B 209. C 210. D 211. D
(B) receipts on goods and services. 217. Which trade barrier is implemented
(C) payments on goods and services. when countries have strong political dis-
putes or disagreements? (Example:The
(D) receipts and payments on goods.
United States and Cuba)
212. Which of the following is most likely to (A) Standards
cause an increase in the international value (B) Quota
of the dollar? (C) Embargo
(A) Higher U.S. interest rates (D) Tariff
NARAYAN CHANGDER
(B) lower U.S. government spending
218. The EU is better seen as an example of
(C) higher real interest rates abroad
(D) expansionary monetary policy in the (A) A Economic and monetary union
U.S. (B) Free trade area
213. If Germany imports $12 million worth (C) A Customs Union
of goods and exports $9 million worth of (D) A Complete Economic integration
goods, they would be described as having
a 219. A major cost of free trade from poor na-
tions is that they will
(A) trade barrier
(A) Get cheaper goods
(B) free trade
(B) Get more goods
(C) trade deficit
(C) Get environmental damage
(D) trade surplus (D) Get a greater variety of stuff
214. Export means 220. A tariff can be defined as a:
(A) Buying goods from another country (A) tax on imports.
(B) Selling goods to another country (B) tax on exports.
(C) Only making one kind of product (C) legal limit on imports.
(D) none of above (D) legal limit on exports.
215. The value of one currency for the purpose 221. Which of the following is a country in
of conversion to another which the United States currently has an
embargo?
(A) exchange rate
(A) Germany
(B) monetary rate
(B) Egypt
(C) conversion rate
(C) Sudan
(D) fiscal rate
(D) Nicaragua
216. An agreement that will reduce tariffs and 222. To focus on producing one thing to im-
other trade barriers is an example of a prove productivity is known as:
(A) Free Trade area (A) Specialization
(B) Preferential trade area (B) Absolute Advantage
(C) customs union (C) International Trade
(D) common market (D) Supply & Demand
212. A 213. C 214. B 215. A 216. B 217. C 218. A 219. C 220. A 221. C 222. A
223. A
223. How is an exchange rate determined in 228. If the value of a country’s exports fall
the money market? short of the value of its imports
(A) The forces of supply and demand (A) trade deficit
(B) Government/the Federal Reserve (B) trade surplus
Bank (C) balance of trade
(C) Whatever sellers of goods are willing (D) none of above
to take
(D) Investors decide the value of the cur- 229. A student decides to buy a ticket for
rency they wish to invest a concert instead of buying a new shirt.
What is the opportunity cost of buying the
224. Economist believe which of the following ticket?
are benefits of international trade: (A) the concert
(A) there can be increased consumption (B) the price of the ticket to the concert
for all.
(C) the shirt
(B) global production will be increased.
(D) the time spent purchasing the ticket
(C) world resources will be used more ef-
ficiently. 230. In order to have a positive balance of
(D) all of these are true. trade, a country would need to
(A) import more than it exports
225. If you are going to visit America and
(B) have an equal number of imports and
have $2999 to spend, how much currency
exports
could you obtain? (1AUD = 0.68USD)
(C) export more than it imports
(A) = 1x 0.68
(D) decide not to trade with other coun-
(B) = 1 / 0.68
tries
(C) = 2999 x 0.68
(D) = 2999 / 0.68 231. What are some positives of globaliza-
tion?
226. Assume the exchange rate of US dollars (A) Cheap sneakers and clothes
to Indian Rupees changes from $1=500 ru-
(B) Cheap electronics
pees to $1= 200 rupees. Which group will
be helped by the change? (C) Information is easy to access and it
travels quickly (internet and social media)
(A) US exporters of US goods to India
(B) Indian Manufacturing firms (D) All of the answers are correct
(C) Indian citizens holding Us dollars 232. An argument that supports the use of
(D) US importers of Indian goods trade barriers when a new industry is in
the early stages of development.
227. What do NAFTA, EU, and ASEAN have in
(A) Free Trade
common?
(B) Infant Industries
(A) all 3 groups use the same currency
(C) National Security
(B) they are all interested in promoting
free trade (D) Balance of Trade
(C) the US is a member of all 3 233. refers to the rate at which the goods
(D) each group attempts to enforce trade of one country exchange for the goods of
barriers rigidly another country.
224. D 225. C 226. A 227. B 228. A 229. C 230. C 231. D 232. B 233. A
(A) terms of trade 239. which of the following would decrease

(B) balance of payment the demand for A$ by the British
(C) real cost (A) more UK students go on gap year in
(D) quotas australia
(B) UK buy more australian exports
234. Members do away with duties and other (C) Uk invest in australian mining
trade barriers-they allow companies to in- projects
vest freely in each member’s country *ex.
(D) UK tourists decide to stay in Majorca
NARAYAN CHANGDER
EU (European Union)
rather than go all tge way to australia
(A) Free-trade zones
(B) Free-trade agreements 240. Which of the following is not part of the
(C) non-tariff alliances arguments about trade protection?
(D) Common markets (A) The national security
(B) A souree of the government revenue
235. the price of one country’s currency ex- (C) The potential for corruption
press in terms of another country’s cur-
(D) The protection of domestic jobs
rency
(A) currency 241. An increase in the value of a currency
(B) exchange rate (A) apprecation
(C) capstone (B) depreciation
(D) none of above (C) quota
(D) subsidy
236. What is the purpose of NAFTA?
(A) To increase trade between the coun- 242. Measure the price of one nation’s cur-
tries of North America rency in terms of another nation’s currency
(B) To help Canada become a more inde- (A) appreciation
pendent nation (B) depreciation
(C) To eliminate the environmental issues (C) exchange rate
between the nations involved (D) balance of trade
(D) none of above
243. The definition of TRADE is
237. The ability to produce a product most ef- (A) Importing goods
ficiently given all the other products that (B) to buy or sell goods or services
could be produced.
(C) Exporting goods
(A) Absolute Advantage
(D) none of above
(B) Comparative Advantage
(C) Positive Advantage 244. Given the same amount of resources, if
(D) Negative Advantage a country can produce more of particular
commodities compared to another country,
238. Which of the following is not included in that country is said to have
the current account balance? (A) productive advantage.
(A) Net income. (B) an absolute advantage.
(B) Current transfer. (C) a comparative advantage.
(C) Financial account. (D) ratio of export price index to import
(D) Balance of goods and services price index.
234. D 235. B 236. A 237. B 238. A 239. D 240. C 241. A 242. C 243. B 244. B
245. A
245. Exchange rate fluctuations will cause (C) Hume

(A) an increase in the domestic price (D) J M Keynes
which leads to inflation.
251. An example of a Common Market
(B) a decrease in the international price
which lead to employment. (A) NAFTA
(C) imported goods and services to face (B) EU
heavy profit. (C) ANZAC
(D) none of the above. (D) CARICOM
246. Goods and services that one country 252. What are some negatives of globaliza-
buys from other countries tion?
(A) exports (A) Workers are exploited in sweatshops
(B) imports (B) Pollution and deforestation
(C) comparative advantage (C) Low wages for factory workers in
(D) absolute advantage Asia and Africa
(D) All of the answers are correct
247. If a country trades with other countries
because it has more than it needs of a cer- 253. Underdeveloped nations tend to trade
tain product, the trade reason is: what type of goods
(A) Surplus (A) Low skill products
(B) Increased competition (B) High tech goods
(C) Specialization (C) finished products
(D) Political/Historical (D) High skill products
248. The European Union has encouraged all 254. If the Mexican Peso depreciates in rela-
of the following EXCEPT tion to the Chinese Yuan, how is Mexico
(A) common currency-Euro affected?
(B) free trade between European coun- (A) Mexico has less purchasing power in
tries Chinese currency
(C) positive relationships among leaders (B) Mexico benefits from increased pur-
(D) common enemies chasing power
(C) Mexico would have more Chinese in-
249. A trade agreement between 27 coun- vestors
tries, using the same currency and allows (D) They would be invaded by China
open trade between those nations.
(A) NAFTA 255. Japan has a 100% tariff on Corvette im-
(B) EU ports. If a Corvette costs $80, 000.00
in the United States, how much would a
(C) WTO
Japanese person pay for it? Would this in-
(D) ABC crease or decrease U.S. exports to Japan?
250. First Economist who introduced basic (A) $80, 000.00 decrease
idea of International Economics (B) $80, 000.00 increase
(A) Adam Smith (C) $160, 000.00 decrease
(B) David Ricardo (D) $160, 000.00 increase
246. B 247. A 248. D 249. B 250. C 251. D 252. D 253. A 254. A 255. C 256. C
256. A situation in which a country specializes 262. Declining costs per unit of output results
in the production of a good or service at from international trade especially if:
which it is relatively more efficient?
(A) International trade affords producers
(A) Absolute advantage monopoly power.
(B) Concerning advantage
(B) National governments levy import tar-
(C) Comparative advantage iffs and quotas.
(D) Available advantage
(C) Producing goods entails increasing
NARAYAN CHANGDER
257. Japan claims that the snow in Japan is costs.
different from other places. Because of (D) economies of scale exist for produc-
this, their laws prevent skis from being im- ers.
ported into the country unless they meet
specific standards. This is called a
263. What is a potential benefit of free
(A) tariff trade?
(B) quota
(A) More employment in sunrise indus-
(C) standard-based trade barrier
tries
(D) non-trade-related restriction
(B) Specialization in commodity produc-
258. The most serious type of trade barrier. tion
(A) Quota (C) Less unemployment in sunset indus-
(B) Excise Tax tries
(C) Tariff
(D) Access to goods that are not pro-
(D) Embargo duced in the domestic market
259. A restriction on the quantity of a good
that can be imported into a country is a(n): 264. When an exchange rate of a currency de-
preciate s, the following will be likely to
(A) tariff.
happen:
(B) quota.
(C) embargo. (A) import prices will fall and export
prices will rise
(D) restricted exchange rate.
(B) export sales will fall and import pur-
260. A benefit, profit, or value of something chases will increase
that must be given up to acquire or achieve
something else. (C) export prices will fall and import
prices will rise
(A) Opportunity Cost
(B) Comparative Advantage (D) prices of all products will not change
(C) Specialization
(D) Production 265. A resource that can’t be replaced in a
short period of time
261. Comparative advantage is central to: (A) Scarcity
(A) Liberalism
(B) Renewable Resource
(B) Economic nationalism
(C) Critical thought (C) Nonrenewable Resource
(D) Feminism (D) Economics
257. C 258. D 259. B 260. A 261. A 262. D 263. D 264. C 265. C 266. C
266. Free international trade’ means that: (C) balance of payments

(A) goods can be transported between (D) protectionists
countries free of charge for ever
271. Religion and language are two examples
(B) all countries use the same currency of conditions that influence interna-
so it does not cost anything to convert cur- tional business.
rencies
(A) economic
(C) there are no tariffs or quotas to limit (B) political and legal
trade between countries
(C) geographic
(D) businesses can produce in any coun- (D) cultural and social
try without any legal controls
272. Limits the quantity of a good imported
267. Which group benefits when the US dollar into a country.
depreciates against other currencies? (A) Tariff
(A) US citizens buying foreign goods and (B) Quota
services (C) Embargo
(B) US citizens traveling in foreign coun- (D) Subsidy
tries
(C) foreign governments with US Trea- 273. A regional trade organization made up of
sury Bonds European nations
(D) foreign citizens vacationing in the US (A) NAFTA
(B) EU
268. An import quota is meant to (blank) the (C) ASEAN
number of a particular good brought into (D) CARICOM
the country.
(A) affect 274. How a country manages its resources is
an example of its condition, which in-
(B) benefit
fluences international business.
(C) restrict (A) cultural and social
(D) increase (B) economic
269. For scholars intent on consolidating the (C) geographic
field of IPE the main task is to: (D) political and legal
(A) Integrate cultural studies ap- 275. The price of one nation’s currency in
proaches terms of another nation’s currency is called
(B) Build upon agreed theoretical ap- (A) foreign exchange
proaches and problems (B) exchange rate
(C) Challenge existing theoretical and (C) foreign exchange rate
epistemological approaches (D) currency converter
(D) Discover new topics to explore
276. Goods and services brought in from other
270. People who favor trade barriers to pro- countries
tect domestic industries from imported (A) supply
products (B) exports
(A) trade deficit (C) imports
(B) quota (D) tariff
267. D 268. C 269. B 270. D 271. D 272. B 273. B 274. B 275. C 276. C 277. A
277. A traditional economy: 282. This occurs when the supply is low and
(A) answers the What, How and For the demand is high
Whom questions the way they have al- (A) Natural Resource
ways been answered (B) Scarcity
(B) answers the What, How and For (C) Economics
Whom questions by central authority (D) Demand
(C) answers the What, How and For
Whom questions using prices determined 283. NAFTA is an agreement among the U.S.,
NARAYAN CHANGDER
by the interaction of supply and demand Canada, and Mexico primarily intended to
promote
(D) none of above
(A) environmental protection
278. A trade agreement between Canada, (B) military defense
Mexico, and the US (C) human rights
(A) NAFTA (D) free trade
(B) EU
284. Government payments to a local supplier
(C) WTO to reduce the supplier costs. This helps lo-
(D) ABC cal businesses survive because it is getting
direct aid from the government
279. Nations that are the target of embargoes (A) Balance of trade
are forced to deal with which of the follow-
(B) protectionism
ing?
(C) exchange rate
(A) falling prices
(D) subsidy
(B) lower tariffs
(C) increased scarcity 285. What is a decrease in the value of a cur-
(D) more foreign competition rency?
(A) Appreciation
280. An association of 12 member nations (B) Depreciation
of southeast Asia to promote economic (C) Inflation
growth, free trade and economic collabo-
(D) Absolute advantage
ration between member nations.
(A) ASEAN 286. A country that lacks ability to logistically
(B) EU transport imports & exports would be con-
cerned with which component of the inter-
(C) NAFTA
national business environment?
(D) none of above (A) Geography
281. Which is an example of a quota? (B) Culture
(A) The U.S. stops trade with China. (C) Economy
(B) The U.S. limits the amount of foreign (D) Infrastructure
cars brought into our country. 287. Specialization is
(C) The U.S. pays a high tax on BMW cars (A) dependence on others to get products
brought into the country. you do not produce and needing to pur-
(D) none of above chase items from them.
278. A 279. C 280. A 281. B 282. B 283. D 284. D 285. B 286. D 287. D
(B) items purchased from other coun- (A) Surplus in the financial account (for-
tries. merly called capital account)
(C) items sold to other countries. (B) surplus in the trade balance
(D) producing specific goods and less (C) surplus in the balance of payments
goods faster, cheaper and better than oth- (D) deficit in the financial ac-
ers can. count(formerly called capital account)
(E) deficit in the balance of payments
288. When a country imports more than it ex-
ports, it has a 293. the value of its exports minus the value
(A) trade surplus. of its imports for measurable during a spe-
(B) trade deficit. cific time
(C) comparative advantage. (A) balance of imports
(D) absolute advantage. (B) balance of exports
(C) balance of trade
289. When a nation imports more than they (D) none of above
export, that nation has a
(A) Free trade agreement 294. US President Donald Trump’s ‘America
First’ policy is an example of:
(B) Trade surplus
(A) Liberalism
(C) Trade deficit
(B) Economic nationalism
(D) Trade free economic system
(C) Neo-Marxism
290. What is MOST LIKELY to happen to US (D) Neo-liberalism
imports and exports if the US dollar be-
295. International organization that settles
comes stronger relative to other curren-
trade disputes and organizes trade nego-
cies?
tiations
(A) imports will decrease, exports will in-
(A) United Nations (UN)
crease
(B) European Union (EU)
(B) both imports and exports will in-
crease (C) World Trade Organization (WTO)
(C) both imports and exports will de- (D) North America Free Trade Agreement
crease (NAFTA)
(D) imports will increase, exports will de- 296. is any activities needed to create,
crease ship, and sell products across national bor-
ders
291. What is an official ban on trade or other
(A) Global economy
commercial activity with a particular coun-
try? (B) International business
(C) Domestic business
(A) Tariff
(D) none of above
(B) Product standard
(C) Embargo 297. Which of the following strategies in-
(D) Quota volves increasing the supply of a prod-
uct so much that its prices drops severely,
292. If a country has a deficit in its current forcing similar products out of the mar-
account, there will be a ket?
288. B 289. C 290. D 291. C 292. A 293. C 294. B 295. C 296. B 297. B
(A) specialization 303. INTERNATIONAL TRADE is

(B) dumping (A) the exchange of goods, and services
(C) setting quotas across international borders or territories
(D) trade restrictions (B) the exchange of capital, goods, and
298. The United States IMPORTS services
(A) Corn (C) the exchange of capital, goods, and
(B) Airplanes services across international borders or
NARAYAN CHANGDER
territories
(C) Toys
(D) none of above (D) the exchange of goods across interna-
tional borders or territories
299. In 2014, India was in the top of the coun-
tries with the percentage of account 304. A limit to the number of imports that may
holders. enter a country
(A) lowest
(A) tariff
(B) highest
(B) embargo
(C) modest
(D) largest (C) demand
(D) quota
300. Why would a country impose a tariff or
quota on imported goods?
305. External trade is also called
(A) to raise the price of imported goods
and encourage people to buy local (A) Foreign trade
(B) to raise the price of imported goods (B) International trade
to help other countries make more money (C) Both
(C) to be mean!
(D) none of above
(D) none of above
301. If a nation limits the import of goods 306. Developed nations have all of the follow-
such as clothing, using various trade re- ing except
strictions, who will benefit? (A) better education
(A) Domestic Consumers of clothing (B) high levels of technology
(B) Domestic producers of clothing
(C) better health
(C) Foreign Producers of clothing
(D) department stores who sell clothing (D) higher populations
302. a reason why some countries use fixed 307. . If a country has a highly educated
exchange rates-often set at low values is population, advanced technology, and fo-
so cuses on international business and foreign
(A) exports are encouarged and imports trade, that country is considered to be:
made more expensive (A) Less-developed
(B) to improve their budget surplus
(B) Developing
(C) to allow investment in capital infras-
tructure (C) Industrialized
(D) all of these options (D) none of above
298. C 299. A 300. A 301. B 302. A 303. C 304. D 305. C 306. D 307. C 308. B
308. In recent years more golf courses, which 313. What is the difference between the
use large quantities of water, have opened value of imports and the value of exports
in China. What is the opportunity cost of (A) Balance of trade
this? (B) Trade differential
(A) cost of water (C) Trade deficit
(B) loss of farmland (D) Trade surplus
(C) sales of golf equipment
314. Sports teams having their logo on mem-
(D) wages of golf course staff orabilia is considered?
(A) Licensing
309. An export can be defined as any product
that is: (B) Joint venture
(C) Franchising
(A) made from goods bought from an-
other country (D) Infrastructure
(B) sold to another country 315. Refers to free trade agreements among
(C) bought from another country countries in a region (ex:EU, ASEAN, and
NAFTA).
(D) made in another country
(A) Free Trade
310. A useful material found in the environ- (B) Trade
ment (C) Balance of Trade
(A) Natural Resource (D) Trading Bloc
(B) Scarcity 316. :Ability to produce more of a good or
(C) Renewable Resource service than a competitor with the same
(D) Economics resource.
311. A farmer decides to grow potatoes in- (B) Absolute Advantage
stead of wheat. What is the opportunity (C) Comparative Advantage
cost of growing the potatoes?
(D) none of above
(A) the output of wheat
(B) the price of seed potatoes 317. Globalisation means
(A) no trade restriction in the entire globe
(C) the profit from growing potatoes
(B) trade between India and USA
(D) the time spent preparing the potato
(C) Multinational Company
field
(D) Foreign Aid
312. What happens when a nation’s currency
318. The difference between the money a
depreciates?
country pays to, and receives from, other
(A) Its products become more expensive nations when it engages in international
to other nations trade
(B) Its products become cheaper to other (A) free traders
nations and exports may increases (B) protectionists
(C) Nothing (C) balance of payments
(D) It halts all trade (D) tariff
309. B 310. A 311. A 312. B 313. A 314. A 315. D 316. B 317. A 318. C 319. A
319. An argument that seeks to protect work- 324. Services are provided to you by other
ers of a country from becoming unem-
ployed due to competition from products (A) countries
made by workers in developing countries (B) companies
who usually work for much lower wages (C) employees
and benefits.
(D) people
(A) Domestic Employment
325. When determining comparative advan-
(B) National Security
NARAYAN CHANGDER
tage one must determine
(C) Trading Bloc (A) Opportunity cost
(D) Balance of Trade (B) Specialization
(C) Absolute Advantage
320. established by the interacion of the
market forces of demand for and supply of (D) Embargos
the currency 326. Top 5 countries to which Australia sends
(A) Fixed Exchange Rate it’s exports:
(B) Flexible Exchange Rate (A) China, Japan, Republic of Korea, USA,
India
(C) floating exchange rate
(B) China, Japan, New Zealand, USA, In-
(D) none of above dia
321. A strong dollar leads to (C) China, Japan, Republic of Korea, Sin-
gapore, India
(A) cheaper imports.
(D) China, Japan, USA, Republic of Korea,
(B) more expensive imports. India
(C) no change in international prices.
327. If a country has a linear (downward slop-
(D) cheaper exports. ing) production possibilities frontier, then
production issaid to be subject to:
322. Goods a country brings into the country,
(A) constant opportunity costs.
produced by other countries.
(B) decreasing opportunity costs.
(A) Import
(C) first increasing and then decreasing
(B) Exports opportunity costs.
(C) Quota (D) increasing opportunity costs.
(D) Embargo 328. FDI stands for
323. An import quota is a (A) Foreign domestic Investment
(B) Foreign Direct Income
(A) tax on import quantities above the le-
gal limit. (C) Foreign Dispute Evaluation
(D) Foreign Direct Investment
(B) way to increase tariff revenues for
the exporting country. 329. If nations limit trade in clothing who will
(C) legal limit on the amount of a good benefit?
that can be imported into a country. (A) Domestic consumers of clothing
(D) legal incentive for members of WTO (B) Foreign Producers of Clothing
to increase their exports of a good or ser- (C) Domestic producers of clothing
vice. (D) Depart stores who sell clothing
320. B 321. A 322. A 323. C 324. D 325. A 326. A 327. A 328. D 329. C 330. B
330. Comparing the value of one currency vs. 335. What is described as a policy in which
another is called there is no government regulation and
(A) Trade Value countries may trade as they please?
(A) Free trade
(B) Exchange Rate
(B) Balance of trade
(C) Trade Balance
(C) Imports
(D) Monetary Dominance (D) Exports
331. What is the theme song for international 336. The use of trade barriers to protect a na-
trade? tion’s industries from foreign competition
(A) Randy Newman, “You Got a Friend In (A) Balance of trade
Me” (B) NAFTA
(B) The Rembrandts, “I’ll Be There For (C) Quotas
You” (D) Protectionism
(C) Biz Markie, “Just a Friend”
337. Which situation correctly describes a
(D) Dionne Warwick, Elton John, Gladys trade deficit?
Knight & Stevie Wonder, “That’s What (A) tariffs are higher than income taxes
Friends Are For”
(B) exports are greater than imports
332. If the value of a country’s imports ex- (C) tax revenue is higher than govern-
ceeds the value of its exports. ment spending
(D) imports are greater than exports
(A) Balance of trade
(B) Trade Surplus 338. Which of the following groups gains
when the US dollar appreciates?
(C) Trade deficit
(A) Foreigners who want to buy American
(D) Trade barriers products
(B) American companies who export
333. The factor endowment model of interna-
goods
tional trade was developed by
(C) Americans traveling in foreign coun-
(A) Adam Smith
tries
(B) David Ricardo (D) Foreign visitors to the USA
(C) John Stuart Mill
339. What is a tariff?
(D) Eli Heckscher and Bertil Ohlin
(A) A government order to stop trade
334. Which of the following would be MOST (B) A limit placed on imports
supportive of British tariffs? (C) A tax placed on imports
(A) a US company hoping to export goods (D) none of above
to Great Britain. 340. What type of exchange rate system do
(B) a British company hoping to export most countries operate under?
goods to other countries. (A) Flexible
(C) British consumers. (B) Floating
(D) British manufacturers who sell their (C) Fictitious
products domestically. (D) Fixed
331. D 332. C 333. D 334. D 335. A 336. D 337. D 338. C 339. C 340. B 341. D
341. Public goods are things that: (C) have a more efficient production pos-
(A) Can be enjoyed by more than one per- sibilities curve.
son without any reduction in the good (D) be operating outside the production
(B) People cannot be excluded from their possibilities curve.
consumption
(C) Are unlikely to be provided by individ- 347. The Panamanian balboa (currency) al-
ual rational actors ways exchanges at a rate of 1 balboa =
1 US dollar. The balboa has a(n)
NARAYAN CHANGDER
(A) floating exchange rate
342. Transactions that bring money into a
(B) appreciating exchange rate
country are BEST described as
(A) Credit (C) depreciating exchange rate
(B) Debit (D) fixed exchange rate
(C) Trade Barriers
348. An import standard is
(D) Tariffs
(A) tax on import quantities above the le-
343. The exchange of goods and services by gal limit.
sale or barter driven by the need for re-
(B) rules about the quality of products be-
sources.
ing imported into a country
(A) Fair Trade
(C) legal limit on the amount of a good
(B) Globalization that can be imported into a country.
(C) Trade
(D) a complete ban on imports/exports
(D) Standard of Living from a particular country
344. This trade barrier limits the number of
products that can be brought into a coun- 349. A command economy:
try. (A) answers the What, How and For
(A) Tariff Whom questions the way they have al-
ways been answered
(B) Quota
(C) Embargo (B) answers the What, How and For
Whom questions by central authority
(D) Subsidy
345. Rules used to try to limit trade with Whom questions using prices determined
other countries by the interaction of supply and demand
(A) embargo (D) none of above
(B) tariff
(C) trade barriers 350. The ability to produce more of a given
(D) quota product using a given amount of a re-
source.
346. When one country can produce a prod- (A) Absolute Advantage
uct with a lower opportunity cost than an-
other country it is said to (B) Comparative Advantage
(A) have an absolute advantage. (C) Positive Advantage
(B) have a comparative advantage. (D) Negative Advantage
342. A 343. C 344. B 345. C 346. B 347. D 348. B 349. B 350. A 351. A
351. The president has promised trade barri- 356. A standard is

ers against China and a lot of people are (A) a cash grant or loan from the govern-
worried that China might retaliate and en- ment to support the business.
act the same trade barriers? This sounds
like the beginnings of a (B) a tax on imports.
(A) Trade war (C) an official ban on trade.
(B) A misallocation of recources (D) a requirement that promotes safety
(C) The national security on all products.
(D) The national of domestic jobs
357. The president Trump has enacted tariff
352. is a tax that a government places on barriers China against China and a lot of
certain imported products people worried that China might retaliate
(A) Tariff and enact the same tariff barriers? This
(B) Embargo event involving:
(C) Quota (A) Trade war
(D) Deal (B) A misallocation of recources
353. A formal agreement between 2 or more (C) The national security
regional countries that removes tariffs be- (D) The national of domestic jobs
tween those countries but keeps them for
other countries 358. Goods a country sells to other countries.
(A) free trade (A) Import
(B) trade block (B) Export
(C) exchange block
(C) Quota
(D) regional block
(D) Subsidy
354. Government payments transferred ex-
porting companies allowing the companies 359. The purchase of United States govern-
to compete with other nations at the inter- ment bonds by Japanese investors will be
national market price without having to in- included in Japan’s
cur the costs associated with selling at the (A) current account
lower price.
(B) financial account
(A) Tariff
(B) Embargo (C) trade deficit
(C) Standard (D) foreign direct investment
(D) Subsidy (E) imports
355. What does it mean when an economist 360. Country:Output per Labor HourA BProd-
says a currency is stronger? uct X 3 9Product Y 4 2Country A has an
(A) It can be exchanged for more of a absolute advantage in
lesser foreign currency
(A) Product X
(B) It can be converted to prices in any
currency (B) Product Y
(C) There a few things it could buy (C) Neither X nor Y
(D) It will buy fewer foreign goods (D) Both X and Y
352. A 353. B 354. D 355. A 356. D 357. A 358. B 359. B 360. B

361. Which headline below is an example of 366. An increase in the value of one currency
using standards as a trade barrier? in terms of another currency is a/n
(A) Limit of 1 million tons of sugar to be (A) appreciation
imported (B) depreciation
(B) US producers of wheat get big payday (C) fixed exchange rate
from congress (D) floating exchange rate
(C) Mexican imports completely abol-
367. Political economy involves:
ished
NARAYAN CHANGDER
(A) The integration of politics and eco-
(D) Only professionally cleaned oranges nomic
allowed in US
(B) The application of economic methods
to political problems
362. Those in favor of protectionist trade poli-
cies would most likely (C) The application of Marxist methods
(A) Believe that restrictions harm con-
sumers 368. President Trump has enacted tariffs
(B) Argue in support of free trade against China and a lot of people worried
(C) Support a massive reduction in tariffs that China might retaliate and enact tar-
iffs against the U.S. What is this event
(D) Cite the need to preserve domestic in- called?
dustries and jobs
(A) A trade war
363. Which among the following is/are an (B) A misallocation of recources
example/s of International economics (C) A national security issue
theory? a) Balance of receipt theo- (D) A loss of domestic jobs
ryb) Malthusian theoryc) Heckscher-Ohlin
theoryd)Peacock-Wisemen theory 369. A country concerned about lack of skilled
workers to complete jobs in emerging ca-
(A) Balance of receipt theory
reers would have potential business part-
(B) Malthusian theory ners concerned with which component?
(C) Heckscher-Ohlin theory (A) Geography
(D) Peacock-Wisemen theory (B) Culture
(C) Economy
364. A barrier is meant to (D) Infrastructure
(A) encourage the flow of trade
370. People who favor few or no trade restric-
(B) block or slow down trade tions
(C) make people obey the government (A) free traders
(D) none of above (B) protectionists
365. A ban on trade with a particular country.
(D) tariff
(A) Subsidy
(B) Embargo 371. These are typically found in airports &
seaports and do not follow the regular
(C) Tariff trade customs and are considered duty-
(D) Quota free
361. D 362. D 363. C 364. B 365. B 366. A 367. D 368. A 369. C 370. A 371. A
(A) Free-trade zones (A) International Economics

(B) Free-trade agreements (B) Business Economics
(C) non-tariff alliances (C) Gender economics
(D) Common markets
372. If Great Britain has a comparative advan-
tage over France in the production of cars, 377. An export is
which of the following is true? (A) items purchased from other coun-
(A) Britain and France should not trade tries.
(B) Britain should export cars to France (B) dependence on others to get products
(C) Neither Britain nor France will gain you do not produce and needing to pur-
from trade chase items from them.
(D) France should export cars to Britain (C) items sold to other countries. Goods
exit the USA.
373. Absolute advantage is determined by:
(D) producing certain goods very well and
(A) actual differences in labor productiv- for a reduced cost.
ity between countries.
(B) relative differences in labor produc- 378. An individual, firm, or country using the
tivity between countries. fewest inputs to produce the same amount
(C) both (a) and (b) of output or the individual, firm, or coun-
(D) neither (a) nor (b) try producing the largest number of units
of output given the same productive re-
374. A primary reason why nations conduct sources.
international trade is because: (A) Comparative advantage
(A) Some nations prefer to produce one
(B) Infant industries
thing while others produce another
(C) Absolute advantage
(B) Resources are not equally distributed
to all trading nations (D) Balance of trade
(C) Trade enhances opportunities to accu-
mulate profits 379. A means of preventing a foreign product
of service from freely entering a nation’s
(D) Interest rates are not identical in all
territory.
trading nations
(A) Trade War
375. The value of a country’s exports minus
(B) Trade Off
the value of its imports during a specific
time. (C) Trade Association
(A) Balance of trade (D) Trade Barrier
(B) Trade Surplus
380. Which party does NPCI cooperate with?
(C) Import
(D) Export (A) Discover Financial Services
(B) Japan Credit Bureau
376. Study on economic interdependence
between countries and its effects on (C) China UnionPay International
economies is known as (D) All of the above.
372. B 373. A 374. B 375. A 376. A 377. C 378. C 379. D 380. D 381. C
381. How would inexpensive lumber from 386. What determines the value of a cur-
Canada affect the U.S. market for new rency?
homes? (A) Federal Reserve Board
(A) Prices of new homes would increase. (B) Congress
(B) Credit available for new homes would
(C) The Market-Supply and Demand
increase
(C) Prices of new homes would decrease (D) Council of Economics Advisers
(D) Transaction costs for new homes
NARAYAN CHANGDER
387. If the value of a country’s exports ex-
would decrease. ceeds the value of its imports.
382. A government order stopping trade with (A) Balance of trade
another country (B) Trade Surplus
(A) tariff (C) Trade deficit
(B) embargo
(D) Trade barriers
(C) quota
(D) none of above 388. If the USA exports $100 million of goods
and imports $150 million, what does the
383. Occurs when the value of exports ex- USA have?
ceeds the value of imports
(A) a trade deficit
(A) dumping
(B) a trade surplus
(B) protective tariff
(C) trade surplus (C) a budget deficit
(D) fixed exchange rate (D) a budget surplus
384. In country A, it takes 10 labor hours to 389. When determining comparative advan-
produce cloth and 20 labor hours to pro- tage, one must determine by looking
duce grain. In country B, it takes 20 labor at what I can produce after specialization.
hours to produce cloth and 10 labor hours (A) Opportunity cost
to produce grain. Which country should
(B) Specialization
produce grain?
(A) A. (C) Absolute Advantage
(B) Both A and B should produce grain. (D) Embargos
(C) B.
390. The purpose of a tariff, when used for
(D) No country should produce grain. protectionism, is to
385. According to the classical theory of inter- (A) limit the number of foreign goods im-
national trade: ported into the country.
(A) Only countries with low wages will ex- (B) make an imported good more expen-
port sive than its domestically produced coun-
(B) Only countries with high wages will terpart.
import (C) raise revenues to pay subsidies to do-
(C) Countries with high wages will have mestic producers.
higher prices (D) stall importation while perishable
(D) All the above are false items rot.
382. B 383. C 384. C 385. D 386. C 387. B 388. A 389. A 390. B 391. C
391. Suppose that there is a balance of trade 396. Which of the following economic factors
in both the US and Canada. Then, the is MOST LIKELY to support free trade?
US dollar appreciates against the Canadian (A) the United Steelworkers of America
dollar. What would the likely outcome
(B) Coca-Cola Corporation
be?
(C) the Anti-Globalization Coalition
(A) A trade deficit in both countries
(D) US electronics producers
(B) A trade surplus in Canada
(C) A trade surplus in the US 397. A company that would like to build a
(D) A trade deficit in Canada golf course that could be played year
round would need to consider which com-
392. International Economics is a eco- ponent of the international business envi-
nomics ronment?
(A) Positive
(A) Geography
(B) Normative
(B) Culture
(C) Public
(C) Economy
(D) Traditional
(D) Infrastructure
393. When would two countries decide not to
trade? 398. The value of all monetary transactions
(A) When one country has the absolute between a country’s economy and the rest
advantage in producing a product of the world.
(B) When one country has the compara- (A) Balance of Trade
tive advantage in producing a product (B) Trade Deficit
(C) When each country’s opportunity (C) Balance of Payments
costs are exactly the same (D) Trade Surplus
(D) When each country’s resources are
exactly the same 399. France introduced import quotas in
(A) 1931
394. If the US $ were to appreciate in relation
(B) 1934
to the Euro, what effect would this have?
(A) European consumers would have (C) 1831
more purchasing power in US (D) 1835
(B) US consumers can buy more Euro-
400. Following a decrease in exports, what
pean goods and services for fewer $$
fiscal policy action would restore the econ-
(C) US consumers can buy more English omy to equilibrium?
goods and services for fewer $$
(A) An increase in the income tax rate
(D) European tourists to the US will
spend more $$ (B) An increase in government transfer
payments
395. Exchange of goods and services among (C) A reduction in government budget
the nations of the world deficit
(A) comparative advantage (D) An open-market purchase of bonds by
(B) absolute advantage the central bank
(C) international trade (E) An open-market sale of bonds by the
(D) imports central bank
392. B 393. C 394. B 395. C 396. B 397. A 398. C 399. A 400. B

401. The classical trade theories of Smith and (B) Not as important as class conflict
Ricardo predict that (C) A plus or positive sum game
(A) Countries will completely specialize in (D) A zero-sum game
the production of export goods.
407. The account which records a nation’s for-
(B) Considerable trade will occur be-
eign economic transactions is called the:
tween countries with different levels of
technology (A) Trade Account.
(C) Small countries could obtain all of the (B) T account.
NARAYAN CHANGDER
gains from trade when trading with large (C) Exchange Market.
countries (D) Balance of Payments.
(D) All of the above. 408. which of the following would decrease
402. Selling products abroad for less than it the demand for A$ by the Japanese
cost to produce them at home (A) a fall in their unemployment
(A) dumping (B) increased Japanese exports of steel
and cars
(B) protectionists
(C) decreased Japanese imports of iron
ore
(D) tariff
(D) a free trade agreement between
403. The ability of one person or nation to pro- Japan and Australia
duce more of a good than another person 409. Someone who strongly opposes a trade
or nation barrier like quotas and tariffs would MOST
(A) Comparative Advantage LIKELY argue that the barrier
(B) Absolute advantage (A) would lead to lower government in-
(C) exports volvement in the economy
(D) protectionism (B) would completely eliminate imported
goods
404. Which of the following would benefit the
(C) might cause more unemployment in
most from protectionist policy?
domestic industries
(A) big firms.
(D) will lead to higher prices and fewer
(B) domestic industry. imported goods
(C) importers.
410. A situation in which a nation imports
(D) unemployed.
more goods and services than it exports.
405. Stopping the export and import of a prod- (A) Balance of Trade
uct is known as? (B) Balance of Payments
(A) Tariff (C) Trade Surplus
(B) Embargo (D) Trade Deficit
(C) Quota
411. An embargo is
(D) Deal
(A) a tax on imports.
406. An economic nationalist believes that re- (B) a cash grant or loan from the govern-
lations between states are: ment to support the business.
(A) Not as important as relations be- (C) an official ban on trade.
tween firms (D) a specific number of imports allowed.
401. D 402. A 403. B 404. B 405. B 406. D 407. D 408. C 409. D 410. D 411. C
412. All of the following restrict international 417. Consumer surplus in a market for a good
trade EXCEPT exists because:
(A) quotas (A) Some producers charge different
(B) subsidies prices for the good in different markets
(C) embargoes (B) Producers don’t have the ability to set
their own price
(D) trade deficits
(C) When the price of goods decrease,
413. In 2010, $1.00 U.S. bought 8.24 Chi- most consumers buy more
nese yuan and in 2012 it bought 6.64 (D) Some consumers are willing to pay
Chinese yuan. How many U.S. dollars more than the equilibrium price
could 1 Chinese yuan purchase in 2010 and
2012? 418. Which term is defined as a tax on im-
(A) 2010:.12 U.S. dollars; 2012:.15 U.S. ported goods?
dollars (A) embargo
(B) 2010:1.2 U.S. dollars; 2012:1.5 U.S. (B) quota
dollars (C) subsidy
(C) 2010:.82 U.S. dollars; 2012:.66 U.S. (D) tariff
dollars
(D) 2010:.15 U.S. dollars; 2012:.11 U.S. 419. A tax on imports
dollars (A) tariff
(B) import tax
414. The payments that the government gives
to certain industries to provide financial (C) supply
help are known as a(n) (D) embargo
(A) embargo
420. To plan for his business trip to Denmark,
(B) quota Tony needs to know how many Danish kro-
(C) tariff nes his US dollars are worth. Tony needs
(D) subsidy to be aware of
(A) the exchange rate.
415. A resource that Earth or people can re-
(B) any currency embargoes.
place is
(C) international tariffs.
(A) Economics
(D) whether or not the US dollar currently
(B) Renewable Resource
enjoys a comparative advantage in trade.
(C) Nonrenewable Resource
(D) Scarcity 421. Setting a limit on the quantity of a prod-
uct that may be imported or exported
416. All of the following are terms used to de- within a given period to regulate interna-
scribe limitations on trade except? tional trade is called?
(A) Trade Barriers (A) Tariff
(B) Sanctions (B) Embargo
(C) Trade restrictions (C) Quota
(D) EU (D) Deal
412. D 413. A 414. D 415. B 416. D 417. D 418. D 419. A 420. A 421. C 422. B
422. An individual, firm, or country has the (C) British investors who have invested
lowest opportunity cost for producing the money in Australia.
good or service. (D) exchange students with a British
(A) Absolute advantage scholarship studying in Canada
(B) Comparative advantage
428. People who favor trade barriers that
(C) Opportunity Cost protect domestic industries
(D) Balance of trade (A) dumping
NARAYAN CHANGDER
423. Free trade means (B) protectionists
(A) the countries use the same currency (C) balance of payments
(B) No trade barriers (D) tariff
(C) there is a quota on some goods 429. Assume the United States can use a
(D) trade is quick and easy given amount of its resources to produce
either 20 airplanes or 8 automobiles and
424. A trade agreement between Canada, Japan can employ the same amount of its
Mexico, and the US, , has been a source resources to produce either 20 airplanes or
of contention among many including our 10 automobiles. The U.S should specialize
President. in
(A) NAFTA (A) automobiles.
(B) EU (B) airplanes.
(C) WTO (C) both goods.
(D) ABC (D) neither of the goods.
425. An increase in the value of a currency is 430. One possible opportunity for a business
as a consequence of globalisation is:
(A) subsidy (A) able to sell products successfully in
(B) quota all foreign markets without changing the
(C) appreciation products
(D) depreciation (B) able to increase prices as there will
be less competition
426. If a country can produce a certain good
(C) more likely to be able to create a
at a lower opportunity cost than another
monopoly
country is has the
(D) able to buy a wider range of imported
(A) absolute advantage
materials and products
(B) competition
(C) specialization 431. A recession tends to make a
(D) comparative advantage (A) trade surplus smaller
(B) trade deficit smaller
427. A stronger British pound is beneficial for:
(C) trade deficit larger
(A) U.S. exchange students studying in
(D) both a and b above
Britain with a U.S. scholarship.
(B) British firms selling goods and ser- 432. What is the impact of a quota on im-
vices in Canada. ported goods?
423. B 424. A 425. C 426. D 427. D 428. B 429. B 430. D 431. B 432. C
(A) Government tariff revenues will in- 437. The benefit or advantage of an economy
crease to be able to produce a commodity at a
(B) Prices will decrease lesser opportunity cost than other entities
is referred to as
(C) Employment will increase
(D) There will be efficiency gains
(B) Absolute Advantage
433. Limit on the quantity of a product that (C) Comparative Advantage
may be imported (D) Growth
(A) protectionists 438. An argument that cites the importance of
(B) quota maintaining industries critical to the coun-
(C) trade deficit try even when the industry cannot effi-
ciently compete at the international level.
(D) balance of payments
(A) Domestic Employment
434. The comparative advantage model of Ri- (B) Infant Industries
cardo was based on (C) Free Trade
(A) intra-industry specialization and (D) National Security
trade
439. Only producing certain goods instead of
(B) inter-industry specialization and everything you need is known as
trade
(A) importing
(C) demand conditions underlying spe- (B) specialization
cialization and trade
(C) balance of trade
(D) income conditions underlying special- (D) absolute advantage
ization and trade
440. One potential disadvantage for a country
435. Liberals argue that international cooper- of encouraging a multinational business to
ation: set up is that:
(A) Can be facilitated by international or- (A) jobs might be lost in existing national
ganisations businesses
(B) Requires a hegemonic state (B) tax revenue to the government will
(C) Primarily benefits the strongest fall
states (C) these companies never export any
products from the countries they operate
(D) Is impossible because of anarchy
in
436. Which of the following will cause the ex- (D) costs of production are likely to be
change rate of a currency to go up? high and this will raise prices
(A) An increase in the demand for im- 441. Choose all of the following that are fac-
ports. tors causing globalisation:
(B) A decrease in the supply of exports. (A) Changes in technology
(C) Speculation that the exchange rate (B) Changes in government policies re-
will fall. ducing protectionism
(D) An increase in investment flows into (C) Increased cultural understanding
the country (D) Growth in MNCs
433. B 434. B 435. A 436. D 437. C 438. D 439. B 440. A 441. A 441. B 441. D
442. C
442. a problem with a fixed exchange rate is 447. A definition of a multinational business
that if it is set too low is one that:
(A) it will slow exports (A) has a foreign sounding name
(B) it will reduce imports (B) imports goods from one country and
(C) it will increase the level of debt a gov- exports them to another one
ernment must pay back (C) exports goods to many different coun-
(D) it will force up interest rates tries
NARAYAN CHANGDER
(D) has factories or operations in more
443. Tariffs are different from assigned im- than one country
port quotas in that tariffs will
(A) restrict imports 448. A market economy:
(B) increase the price of imported goods (A) answers the What, How and For
Whom questions the way they have al-
(C) benefit domestic consumers of im-
ways been answered
ported goods
(B) answers the What, How and For
(D) hurt domestic producers of goods fac-
Whom questions by central authority
ing import competition
(E) generate additional revenue for the
Whom questions using prices determined
domestic government
by the interaction of supply and demand
444. Agreement that will eliminate all tariffs (D) none of above
and other trade barriers between Canada,
Mexico, and the US 449. A Flexible exchange rate is also called as
(A) NAFTA
(A) floating
(B) EU
(B) flying
(C) ASEAN
(C) flexing
(D) CARICOM
(D) none of above
445. The next best alternative.
(A) Opportunity Cost 450. The main justification for an embargo on
foreign goods is to
(B) Trade Surplus
(A) Punish a nation
(C) Trade deficit
(B) raise revenue
(D) Comparative advantage
(C) Increase consumption or the good
446. If a country has improving educational (D) none of above
systems, increasing technology and ex-
panding industries, that country is consid- 451. Which economic system uses the “invisi-
ered to be: ble hand theory”?
(A) Developing (A) a traditional economy
(B) Less-developed (B) a command economy
(C) Industrialized (C) a market economy
(D) none of above (D) a communist economy
443. E 444. A 445. A 446. A 447. D 448. C 449. A 450. A 451. C 452. B 453. B
452. In 1962, the United States prohibited all 458. Which of the following is usually an ef-
imports and exports to and from Cuba. fect of an embargo?
(A) Tariff (A) Prices fall because consumers have
(B) Embargo more options.
(C) Quota (B) Prices rise because consumers have
(D) none of above fewer options.
(C) Countries benefit because open trade
453. Which organization promotes and en-
is encouraged.
forces trade laws
(A) International Monetary Fund (D) Smaller countries give in to the de-
mands of larger countries.
(B) World Trade Organization
(C) European Union 459. Silk is a product created by what type of
(D) NAFTA resource?
454. What is the impact of an increase of tar- (A) Land

iffs on imported goods for domestic pro- (B) Labor
ducers (C) Capital
(A) Government revenues will increase (D) none of above
(B) Prices will decrease
(C) Imports will fall 460. What is India’s financial motto?
(D) Domestic firms will produce more (A) 360◦ Finance.
455. exchange rate is not fixed by the (B) Money talks, cash screams.
monetary authorities. (C) Cash is king, digital is divine.
(A) Fixed (D) Think big, cash bigger.
(B) Flexible
(C) quotas 461. Which of the following is NOT an argu-
ment in favor of protectionism?
(D) tariffs
(A) Protectionism shields infant indus-
456. A depreciating U.S. dollar is because tries from competition
it is worth in terms of other currencies. (B) Protectionism safeguards workers’
(A) strengthening; more jobs
(B) weakening; less (C) Protectionism promotes industries
(C) a problem for exporters; less that are essential to national security
(D) beneficial to importers; more (D) Protectionism makes domestic firms
457. A company is worried that about ex- more competitive in the long run
change rate would need to consider which
462. Tariffs and quotas can benefit nations im-
component of the international business
posing them by:
environment?
(A) Geography (A) Raising revenue
(B) Culture (B) Increasing the variety of goods
(C) Economy (C) Lowering prices
(D) Infrastructure (D) Increasing consumption
454. D 455. B 456. B 457. C 458. B 459. A 460. C 461. D 462. A 463. B
463. Who signed NAFTA into law? 469. Suppose the exchange rate between the
(A) George W. Bush United States and Japan changes from $1
(B) Bill Clinton = 100 yen to $1 = 110 yen. What would
happen to the prices of American goods in
(C) Barack Obama Japan?
(D) Ronald Reagan
(A) increase or decrease
464. A country’s ability to produce a prod- (B) decrease
uct relatively more efficiently than another (C) remain the same
NARAYAN CHANGDER
country
(D) increase
(A) comparative advantage
(B) absolute advantage 470. The first economist who introduced the
(C) exports basic idea of International Economics
(D) international trade (A) Adam Smith
(B) David Ricardo
465. Goods or services that a country sells to
(C) Hume
other nations
(A) Duty (D) J.M Keynes
(B) Tariff 471. What does a protective tariff seek to
(C) Export protect?
(D) Import (A) Protectionists
466. What is currency appreciation (B) Free Trade
(A) Value of currency decreases (C) Revenue
(B) Value of currency increases (D) Domestic Industries
(C) Import more than you export 472. Having a comparative advantage in a
(D) Export more than your import good means that a country can produce the
good
467. A tariff raises the price of foreign goods
while a subsidy (A) at a lower opportunity cost compared
to another country
(A) lowers the price of foreign goods
(B) comparatively faster than any other
(B) lowers the price of domestic goods
country
(C) raises the price of domestic goods
(C) better than every other country in the
(D) raises the price of foreign goods world
468. An import is (D) cheaper than most countries
(A) producing certain goods very well and
473. How will AfCFTA help member coun-
for a reduced cost.
tries?
(B) items sold to other countries.
(A) It will reduce trade.
(C) dependence on others to get products
you do not produce and needing to pur- (B) It will create a common currency.
chase items from them. (C) It will help countries protect domestic
(D) items purchased from other coun- industry.
tries. Goods come into the USA. (D) It will decrease tariffs.
464. A 465. C 466. B 467. B 468. D 469. D 470. C 471. D 472. A 473. D 474. B
1.7 Public Economics 283
474. A company is worried that about the 475. If I am better at all types of production
norms and customs of a country would or I can simply produce more than you, I
need to consider which component of the have the in all forms of production.
international business environment? (A) Comparative advantage
(A) Geography
(B) Specialization
(B) Culture
(C) Economy (C) Absolute advantage
(D) Infrastructure (D) developed nation
1.7 Public Economics

1. Individuals who take the risk of producing 6. What is the problem with public goods?
a product for a profit are (A) Lacks rivalry
(A) Consumers (B) Lacks a excludability
(B) Producers (C) Lacks consumer and producer surplus
(C) Chief Executive Officer (CEO) (D) None of the above
(D) Entrepreneurs
7. Goods and services provided at free or re-
2. Money that is set aside for a specific pur- duced prices like medicaid, medicare, HUD
pose, such as defense spending, is called housing, food stamps, etc
(A) appropriations (A) Cash transfers
(B) transfer payments (B) In-Kind Benefits
(C) grants-in-aid (C) welfare
(D) discretionary spending (D) social security
3. Which is not a GST slab in India at 8. A good that is rival but non-excludable will
present? be a:
(A) 5% (A) Private good
(B) 25% (B) club good
(C) 12% (C) Common good
(D) 18% (D) Public good
4. Public goods scale is optimal when 9. The part of the economy that is owned by
(A) MRT=MRS1-MRS2 individuals and is operated for their per-
(B) MRT=MRS1xMMRS2 sonal benefit is known as
(C) MST= MRS2/MRS1 (A) Private Sector
(D) MRT=MRS1+MRS2 (B) Public Sector
(C) Profit
5. Which of the following is NOT an example
of a public good? (D) Individual Decision Making
(A) Fireworks display 10. Unlike high-income countries, low-income
(B) National Defense countries rely most on their
(C) Public transportation (A) human resources.
(D) Lighthouse (B) produced capital.
475. C 1. D 2. A 3. B 4. D 5. C 6. B 7. B 8. C 9. A 10. C
(C) natural capital. 16. Which type of goods would be over pro-
(D) intangible capital. duced if left to market forces?
(A) Public Goods
11. The goal of government welfare programs (B) Goods with positive consumption ex-
is to ternality
(A) maintain a poverty threshold that (C) Goods with negative consumption ex-
matches the median income. ternality
(B) eliminate the dependence of people (D) private goods
NARAYAN CHANGDER
on the welfare system.
(C) eliminate the income gap between the 17. See a friend’s account story on Instagram
richest Americans and the poorest. (A) Public goods
(D) raise the standard of living of certain (B) Common goods
less-fortunate members of society. (C) Club goods
(D) Private goods
12. The recent rise of the Chinese economy is
associated with (E) Inferior goods
(A) the adoption of rigid centralized plan- 18. Money that is given to states to cover ex-
ning. penses like roads, education, and health-
(B) the elimination of economic systems. care is
(C) the adoption of economic policies (A) appropriations
widespread in the former Soviet Union. (B) grants-in-aid
(D) a switch to free-market policies. (C) discretionary spending
(D) mandatory spending
13. What is the free rider problem?
(A) scarcity even when you pay for a good 19. Goods that lack a price tend to result in a
(B) Reaping all the benefits without con- market failure. The market failure can be
tributing attributed to a lack of:
(C) Common goods that don’t have a price (A) Rivalry
(D) none of the above (B) Equity
(C) Excludability
14. A good that is non-rival but excludable is (D) None of the above
considered a:
(A) Private Good 20. Common goods are:
(B) Club Good (A) Non rival, excludable
(C) Public Good (B) Non rival, non excludable
(D) Common Good (C) rival, excludable
(D) rival, non excludable
15. Which one of the following is not an ex-
ample for direct tax? 21. In some cases, states and the federal gov-
ernment make direct payments to the poor
(A) Personal Income Tax
such as welfare, social security, unemploy-
(B) Corporate tax ment benefits and worker’s compensation.
(C) Goods andServices Tax (GST) These are called.
(D) Land tax (A) Cash transfers
11. D 12. D 13. B 14. B 15. C 16. C 17. C 18. B 19. C 20. D 21. A
(B) In-Kind Benefits (D) Rivalry dan non-excludable

(C) charity (E) Paid and Limited quantity
(D) socialism
28. A transfer payment is one in which the
22. Government programs that provide peo- government
ple with services as long as they qualify (A) directly purchases goods and ser-
are referred to as vices
(A) mandatory spending (B) provides states or local governments
(B) entitlements with money for things like education, in-
(C) discretionary spending frastructure, etc.
(D) appropriations (C) loans given to foreign countries for a
variety of reasons
23. Which one of the following is not a non- (D) money given to people that do not pro-
tax revenue of Govt? vide goods or services, such as Social Se-
(A) grant curity checks
(B) Fines and penalties
29. How many principles of project evaluation
(C) Surcharge according to CBA method?
(D) Profit (A) 2
24. An example of a public good is (B) 3
(A) Firefighters (C) 4
(B) police officers (D) 5
(C) parks
30. Which of the following is a Central Govt
(D) all of thee above Tax?
25. The private sector is primarily controlled (A) Land Tax
by (B) * Property tax
(A) public decision makers (C) * Personal Income Tax
(B) public and individual decision makers (D) Professional Tax
(C) individual choice
31. A percentage of money taken from individ-
(D) government uals or businesses is referred to as
26. Large stocks of fish in the great lakes rep- (A) property tax
resent (B) excise tax
(A) nonrenewable natural capital. (C) income tax
(B) renewable natural capital. (D) sales tax
(C) intangible capital.
32. A shared good and service for which
(D) produced capit
would be impractical to make consumers
27. Which of the following are characteristics pay individually and to exclude nonpayers.
of public goods? (A) Externality
(A) Rivalry dan excludable (B) Public sector
(B) Non-rivalry dan excludable (C) Public good
(C) Non-rivalry dan non-excludable (D) Private sector
22. B 23. C 24. C 25. C 26. B 27. C 28. D 29. A 30. C 31. C 32. C 33. C
33. Most governments are likely to pay for (C) money base
public goods and services through- (D) money stream
(A) donations from wealthy politicians
39. Sustainable development and the protec-
(B) donations from abroad
tion of public health require
(C) revenue from sales and income taxes
(A) the generation of electricity from fos-
(D) borrowings from abroad sil fuels.
34. Which one of the following tax is collected (B) governments to recognize personal
NARAYAN CHANGDER
by Local Self Governments? liberties as the highest priority.
(A) Professional Tax (C) the independence of private landown-
(B) Corporate tax ers to develop individual policies.
(C) GST (D) public policies that protect the envi-
ronment.
(D) Stamp duty
40. A market is expected to have no distortion
35. The part of the economy that involves the
at all. What is this market called?
transactions of individuals and businesses.
(A) Night market
(A) Public sector
(B) Morning market
(B) Externality
(C) goods market
(C) Private sector
(D) Public good (D) Efficient market
(E) Free market
36. Goods and Services Tax (GST) wasintro-
duced in India on 41. The fiscal year for the US government runs
(A) 21st July 2017 (A) January-December
(B) 1st June 2017 (B) February-January
(C) 1st July 2017 (C) October-September
(D) 21st may 2018 (D) July-June
37. The World Trade Organization 42. Which following answer is

(A) mainly regulates the use of global en- (A) Needs a common measurement unit
vironmental resources. (B) Analysis of a project should not in-
(B) guards human rights and the environ- clude a comparison
mental resources of the world. (C) It is important to avoid double count-
(C) is widely recognized as the leader of ing benefits and costs
global trade regulation. (D) The benefits are often judged by mar-
(D) has steadily lost the power to regu- ket choice
late international trade.
43. Which of the following is a method of pro-
38. Revenue is the money that the govern- viding public goods and services?
ment brings in for use on government ex- (A) The State only provides finance and
penditures. The term used to define the the State does not organize public provi-
source of revenue is sion goods and services
(A) tax base (B) The private sector is not financed and
(B) revenue base the private sector must organize itself
34. A 35. C 36. C 37. D 38. A 39. D 40. D 41. C 42. B 43. C
(C) The state and the private sector work 49. From an ecological economist’s perspec-
together to finance and provide public tive, without sustainability, as economies
goods and services grow,
(D) none of above (A) gross national product grows too.
44. The United States government provides (B) natural resources are renewed.
the following services EXCEPT- (C) the natural world is depleted.
(A) interstate highways (D) natural ecosystems are replenished.
(B) satellite radio
50. Costs to producers of producing one more
(C) postal service
unit of a good
(D) national defense
(A) Market Failure
45. A tax that takes a higher percentage of (B) Externality
money from higher incomes is what type (C) Marginal Private Costs
of tax?
(D) Marginal Social Costs
(A) sales tax
(B) progressive tax 51. The installation costs of a new computer
(C) proportional tax room is classified as
(D) regressive tax (A) Revenue Expenditure
(B) Income Expenditue
46. We would expect that in a community
with mounting air and water pollution (C) Capital Expenditure
problems, the (D) Reserve Expenditure
(A) economy of the region would decline.
52. The government pays for public goods and
(B) unemployment rates would drop.
services through-
(C) population would increase.
(A) donations from wealthy politicians
(D) health care would become less impor-
tant. (B) donations from foreign nations
(C) revenue from sales and income taxes
47. Which of the following is an example of a
(D) revenue from the lottery
private good?
(A) School WiFi 53. Government mostly provide the following
(B) Park bench services EXCEPT-
(C) Netflix (A) education
(D) Apples (B) entertainment
48. What is one reason that local law enforce- (C) healthcare
ment is considered a public good? (D) infrastructure
(A) Everyone in the community benefits
54. A public good is1 rival2 nonrival3 exclud-
from it.
able4 nonexcludable
(B) Nobody in the community has to pay
for it. (A) 1 and 3
(C) Private firms make a profit from pro- (B) 1 and 4
ducing it. (C) 2 and 3
(D) Individual citizens pay directly for it. (D) 2 and 4
44. B 45. B 46. A 47. D 48. A 49. C 50. C 51. C 52. C 53. B 54. D 55. B
55. What is the tragedy of the commons? (C) ensure access to natural resources
(A) Finite resources of a private good for industry.
(B) Finite resources, zero excludability (D) measure the impact of industrial
wastes on the environment.
(C) Unlimited resources, zero excludabil-
ity 61. Which are the GSTs collected by Central
(D) Never heard of it Govt?
(A) CGST alone
56. When the government spends more
NARAYAN CHANGDER
(B) SGST alone
money than it receives in revenue, it is
referred to as (C) CGST and SGST
(A) debt (D) CGST and IGST
(B) deficit 62. The part of the economy that involves the
(C) national debt transactions of the government.
(D) banrupt (A) Private sector
(B) Free rider
57. Free riders are examples of
(C) Public sector
(A) public sector (D) Externality
(B) public good
(C) Externality 63. The national demand for public goods eas-
ily because every locality wants to be
(D) Market Failure
allocated more or earlier budget than other
58. How many purposes does CBA have in places.
measuring efficiency of public expendi- (A) correct and distorted
ture? (B) misleading and increase
(A) 1 (C) misleading and distorted
(B) 2 (D) increase rapidly
(C) 3 64. Natural capital includes ecosystem capital
(D) 4 plus
(A) natural forms of energy, such as so-
59. An Economic side effect of a good or ser-
lar, wind, and flowing water.
vice that generates benefits or costs to
someone other than the person deciding (B) nonrenewable resources such as fos-
how much to produce or consume. sil fuels.
(A) Public good (C) money available to invest in growing
industry.
(B) Free rider
(D) all of the products of photosynthesis
(C) Externalities in the biosphere.
(D) Private sector
65. Someone who would not choose to pay for
60. Environmental public policy is intended to a certain good or service, but who would
(A) promote the harvesting of natural re- get the benefits of it anyway if it were
sources. provided as a public good.
(B) improve human welfare and protect (A) Market failure
the natural world. (B) Externality
56. B 57. D 58. B 59. C 60. B 61. D 62. C 63. C 64. B 65. D
1.8 Money and Banking 289
(C) Public good 70. Is a situation in which the market, on its

(D) Free rider own, does not distribute resources effi-
ciently.
66. Which of the following explains why a city
(A) Public good
fireworks display on the Fourth of July is
provided as a public good? (B) Private sector
(A) Fireworks displays usually take place (C) Externality
in a public area. (D) Market Failure
(B) Fireworks are a scarce resource.
71. How many steps does the public expendi-
(C) Nonpayers cannot be prevented from
ture management process include?
seeing the fireworks.
(D) Each consumer pays a fee to see the (A) 7
fireworks. (B) 6
(C) 5
67. Which is not an effect of public expendi-
ture (D) 4
(A) Foreign trade effect 72. The concept of sustainability requires that
(B) Encourage or inhibit an economic ac-
(A) economic growth does not exceed the
tivity
renewal of natural capital.
(C) Solve market failures
(B) all sources of energy used in an econ-
(D) Impact on the supply-demand rela-
omy must come from the sun.
tionship
(C) global economic systems are based
68. A government might subsidies education on the harvesting of natural products.
because the subsidy (D) economies use equal portions of land,
(A) Reduces production cost and there- labor, and capital.
fore encourages consumption
(B) Means the firm receives money to 73. Which of the following is not a reason for
spend on what it wants increasing Public expenditure.
(C) Benefits may be lower than its costs (A) Increase in the defence expenditure
(D) Might correct government failure (B) Imposing new tax
69. Which one of the follwing is a feature of (C) Welfare activities
indirect tax? (D) Urbanisation
(A) Expenditure on tax collection is more
74. Some decisions to produce goods and ser-
(B) Paid by the person on whom itis im- vices generate unintended costs, called
posed
(A) positive externalities
(C) Tax payer undertakes theburden of
the tax. (B) Negative private sector
(D) The tax is included in the pricepaid by (C) Negative externalities
the consumer (D) Positive private sector
1.8 Money and Banking
66. C 67. A 68. A 69. D 70. D 71. B 72. A 73. B 74. C

1. Money whose value is based on the type 7. What type of policy does the Fed use to
of material from which it is made is called counteract a contraction?
(A) FIAT (A) fiscal policy
(B) Representative money (B) tight money policy
(C) Commodity money (C) easy money policy
(D) near money (D) policy lags
2. In 1913, Congress created “the Fed” re- 8. The item must physically last and will not
NARAYAN CHANGDER
sponsible for wear out too quickly to be useful as money
(A) managing the budget (A) Durable
(B) Acceptable
(B) regulating banks
(C) Divisible
(C) establishing trade agreements
(D) Scarce
(D) none of above
9. Two units of the same type of money must
3. Carl wants a new computer. He goes to 6 be the same in terms of what they will
different stores on the weekend compar- buy.
ing prices. Carl is using money as
(A) Durability
(A) a store of value. (B) Limited Supply
(B) a medium of exchange. (C) Portability
(C) commodity money. (D) Uniformity
(D) a unit of account.
10. A banking system that keeps only a small
4. Expenses that can or go up or down each portion of deposits on hand and lends out
month the rest.
(A) Merry-go-round Expenses (A) Fractional Reserve Banking
(B) Fixed Expenses (B) Federal Reserve System
(C) Shifty Expenses (C) Federal Deposit Insurance Corpora-
tion
(D) Variable Expenses
(D) Credit Union
5. Which one is the Bank of the Public?
11. Which of the following will increase
(A) Commercial Bank money supply?
(B) Central Bank (A) Fall in repo rate
(C) Both (a) and (b) (B) Purchase of securities in open market
(D) None of the above (C) Decrease in cash reserve ratio
6. Money is functioning as a standard of (D) All of these
value when you 12. What is the value of money multiplier
(A) Use it to compare two houses that are when initial deposits are |500 crores and
different prices. LRR is 10 percent?
(B) Buy jeans at the mall. (A) 0.1
(C) Buy a rare baseball card that you ex- (B) 0.2
pect will increase in value. (C) 10
(D) Trade a cup of sugar for two eggs. (D) 20
1. C 2. B 3. D 4. D 5. A 6. A 7. C 8. A 9. D 10. A 11. D 12. C 13. A

13. An agreement to purchase or sell stocks (C) outstanding checks

for a specified price until a date in the fu- (D) bank statements
ture is reached
(A) Options 19. The buying and selling of government
(B) Default bonds in financial markets is
(C) Mutual Fund (A) Monetary Policy
(D) Diversification (B) Responsibilities of the FED
(C) Golden Standard
14. What is the annual percentage rate (APR)
(D) Open Market Operations
(A) annual rate (including fees) paid for
borrowed money 20. Government-issued coins and paper notes
(B) interest on a mortgage that may be used to exchange goods and
(C) a bank fee services; essentially, the physical repre-
sentation of money
(A) Currency
15. If the reserve requirement is 20%, the ex- (B) Representative Money
istence of $100 worth of excess reserves
(C) Fiat Money
in the banking system can lead to a maxi-
mum expansion of the money supply equal (D) Commodity Money
to
21. Which of the following is NOT a function
(A) $200 money serves in the economy?
(B) $500 (A) medium of exchange
(C) $750 (B) store of value
(D) $1000 (C) standard of value
16. The term used to describe the ease and (D) value added commodity
speed with which you can convert savings
or an investment to cash is: 22. In India there are four alternative mea-
sures of money supply:M1, M2, M3, and
(A) Convertibility
M4 of these M1=
(B) Principal
(A) Currency with people
(C) Liquidity
(B) Currency with people+ Demand de-
(D) Rate of return posdit
17. Each of the following FED actions will con- (C) Currency with people+ Demand de-
tract the money supply except posdit+ Other deposit with RBI
(A) raise the reserve ratio (D) none of these
(B) raise the discount rate
23. A collection of funds from many individ-
(C) raise the Federal Funds rate uals and invested in stocks, bonds, and
(D) buy bonds other assets
18. Which of the following refers to checks (A) Mutual Fund
that have been written but not cashed? (B) Stock
(A) cancelled check (C) Stock Split
(B) demand deposits (D) Diversification
14. A 15. B 16. C 17. D 18. C 19. D 20. A 21. D 22. C 23. A 24. A
24. When one share is divided into half or 30. Which of the following is not a tool of fis-
more (because the price has increased and cal policy?
deterred investors) (A) Taxing
(A) Stock Split (B) Spending
(B) Return (C) Interest Rates
(C) Principal (D) All of these options are tools of fiscal
(D) Interest policy.
NARAYAN CHANGDER
25. The sale of an investment for less than its 31. A U.S. government agency that provides
purchase price insurance on customer’s deposits in a bank
(A) Options account.
(B) Capital Gain (A) Federal Reserve System
(C) Maturity (B) Credit Union
(D) Capital Loss (C) Federal Deposit Insurance Corpora-
tion
26. As his aunt’s only beneficiary, he came (D) Fractional Reserve Banking
a fortune on her death.
(A) upon 32. Money that has value because the govern-
ment has ordered that it is an acceptable
(B) across
means to pay debts
(C) into (A) Currency
(D) up against (B) Representative Money
27. The current chairperson of the Federal Re- (C) Fiat Money
serve is: (D) Commodity Money
(A) Jerome Powell
33. is the ratio of deposits which bank
(B) Alan Greenspan keep with the central bank
(C) Ben Bernanke (A) CRR
(D) Janet Yellen (B) SLR
28. The currency created by the central bank (C) Bank rate
is a part of (D) Reverse repo rate
(A) High powered money
34. A demand deposit account subject to with-
(B) Money drawal of funds electronically or by check
(C) Bank money (A) Savings account
(D) Money supply (B) Mortgage
29. To trade goods or services without the use (C) Loan
of money is (D) Checking account
(A) Bartering
35. Which of the following is a commonly ac-
(B) Trading cepted definition of money?
(C) Economy (A) Any good which is commonly uiesd as
(D) Debt a store of value
25. D 26. C 27. A 28. A 29. A 30. C 31. C 32. C 33. A 34. D 35. D
(B) Any good which is exchanged foe gold 41. When you pay for a new CD with a debit
at a fixed rate. card, you are using the electronic form of
(C) Any good which is acceptable to a a payment by (ya’ll probably never even
bank bought a physical CD. These days it is all
(D) Any good which is commonly ac- streamed)
cepted as medium of exchange (A) money order.
(B) credit card.
36. Term deposits are those
(C) personal check.
(A) against which no cheque can be is-
(D) cashier’s check.
sued
(B) against which no interest is paid to 42. Purchasing power remains constant.
the depositor (A) scarcity
(C) which are fixed deposits (B) acceptability
(D) Both (a) and (c) (C) stability
(D) portability
37. When the Fed sells bonds, their action
(A) increases the money supply. 43. A woman borrows money to buy a house.
(B) decreases the money supply. If she does not repay the money the bank
(C) increases excess reserves in the loaned her, the bank will take the house.
banking system. What is the house?
(D) reduces interest rates. (A) interest
(B) collateral
38. Which of the following statements is (C) budget
true/
(D) financial institution
(A) Money is a medium of exchange
(B) Money is a unit of account 44. What is a business owned and managed
(C) Money serves as a store of value by a single person called?
(D) all of the above (A) conglomerate
(B) general partnership
39. A demand deposit is better than a time (C) limited partnership
deposit in serving the function of
(D) sole proprietorship
money.(1) medium of exchange(2) unit of
account(3) store of value 45. The Demand for Money is made up of
(A) (1) only (A) M1
(B) (1) and (2) only (B) Savings Bonds and Securities
(C) (2) and (3) only (C) Real GDP
(D) (1), (2) and (3) (D) Transactions Demand + Assets De-
mand
40. A bank is an institution
(A) owned by merchants. 46. The ability to easily convert financial as-
(B) that collects taxes for the govern- sets into cash without loss in value.
ment. (A) Inflation
(C) for receiving, keeping, and lending (B) Annuity
money. (C) Liquidity
(D) that regulates interstate commerce. (D) Onions
36. D 37. B 38. D 39. A 40. C 41. C 42. C 43. B 44. D 45. D 46. C 47. A
47. Money secured by the equity in a con- 52. Which of the following are banking ser-
sumer’s home. vices
(A) HELOC (A) Issuing credit cards
(B) ARM (B) Issuing loans
(C) FDIC (C) storing money
(D) Mortgage (D) all of the above
48. What do many people consider to be the 53. The Federal Reserve is in charge of what?
NARAYAN CHANGDER
chief advantage of sole proprietorship? (A) Distributing info about the economy
(A) The owner has unlimited liability. (B) conducting the nations monetary pol-
icy
(B) The owner keeps all the profits.
(C) supervise and regulate banks
(C) The owner has unlimited start-up
funds.
(D) The owner does not have to obey la- 54. An inventor needs a huge amount of
bor laws. money to start a business but does not
want to give up control of how the product
49. She gives each of her children fifty pence will be made. What business organization
a week money. is he likely to choose?
(A) pocket (A) sole proprietorship
(B) free (B) general partnership
(C) ready (C) limited partnership
(D) spare (D) limited liability partnership
50. Investing in a money market mutual fund 55. An important financial institution that as-
in a certificate of deposit because unlike sists in the initial sale of securities in the
CDs, money market funds primary market is the
(A) are not insured by the FDIC (A) Investment Bank
(B) are not protected by the Securities (B) Commercial Bank
and Exchange Commission (C) Stock Exchange
(C) do not earn a fixed interest rate (D) none of above
(D) must be held for a preset amount of 56. commercial banks collect and (1)
time cheques on behalf of their (2)
(A) clear, (2) owners
51. If the money supply stays constant but
the demand for money decreases, the (B) lend, (2) country
equilibrium interest rate and quantity of (C) clear, (2) clients
money will change in which of the fol- (D) count, (2) creditor
lowing ways? Interest Rate/Quantity of
57. The use of a mobile (cell) phone to make
Money
payments is an example of which function
(A) Increase/decrease ofmoney?
(B) Increase/not change (A) a medium of exchange
(C) Decrease/decrease (B) a standard of deferred payment
(D) Decrease/increase (C) a store of wealth
(E) Decrease/not change (D) a unit of account
48. B 49. A 50. A 51. E 52. D 53. D 54. C 55. A 56. C 57. A 58. B
58. What is the value of multiplier if LRR is 64. Money that has value because the Govern-
10% ment declared that it is money.
(A) 20 (A) Fiat Money
(B) 10 (B) Commodity Money
(C) 5 (C) Currency
(D) 50 (D) Coins
65. All of the following are components of the

59. The ease with which assets can be con-
money supply in the United States EXCEPT
verted into cash
(A) paper money
(A) Liquidity
(B) checkable deposits
(B) Return
(C) gold bullion
(C) Futures (D) demand deposits
(D) Options
66. main responsibility of the Federal Reserve
60. Dollars and cents System
(A) Currency (A) establish monetary policy
(B) Money (B) print money
(C) Certificate of Deposit (C) engrave coins
(D) Money Market (D) gain power
67. They were left a lot of money in their

61. Our money supply is aunt’s
(A) hard to disperse (A) will
(B) hard to regulate (B) testtament
(C) easy to control (C) heritage
(D) none of above (D) inheritance
62. Decisions regarding purchases and sales of 68. The risk of ending up with the equivalent
government securities by the Fed are made of a never-ending loan is one of the disad-
by the: vantages of using
(A) Federal Funds Committee. (A) debit cards.
(B) Discount Committee. (B) credit cards.
(C) Federal Open Market Committee. (C) savings accounts.
(D) checking accounts
(D) FDIC.
69. the money supply increases, what hap-
63. What is the Federal Reserve? pens in the money market? (Assuming
(A) Agency responsible for international money demand is downward sloping)
trade (A) The nominal interest rate rises
(B) Central credit union (B) The nominal interest rate falls
(C) Agency responsible for collecting (C) Transaction demand for money falls
taxes (D) The nominal interest rate does not
(D) Central bank of the U.S. change
59. A 60. A 61. C 62. C 63. D 64. A 65. C 66. A 67. A 68. B 69. B 70. C
70. What is the Cash Reserve Ratio (CRR)? (B) Diversification

(A) the fraction of the deposits that com- (C) Stock Split
mercial banks lend to the customers (D) Principal
(B) the fraction of the deposits that RBI
must keep with commercial banks 76. Why would investors buy a junk bond?
(C) the fraction of the deposits that com- (A) They want to invest in a particular
mercial banks must keep with RBI company although it may not pay off.
(D) none of above (B) They want a steady source of income
NARAYAN CHANGDER
with low risk.
71. This is a formula that the FED uses to cal- (C) Junk bonds have a higher rating than
culate the amount of total deposits each municipal bonds.
bank has to have accounted for.
(D) Junk bonds pay a potentially higher
(A) Responsibilities of FED
level of interest than other bonds.
(B) Fiat Money
(C) Reserve Requirement 77. The quantity of investment demanded
(D) Gold Standard most likely increases when
(A) real GDP increases
72. If the reserve requirement is 20%, and a (B) the cost of acquiring and maintaining
customer deposits $100, what is the max. capital equipment rises
change in the money supply once all money
has been loaned out? (C) the real rate of interest rates de-
creases
(A) $500
(D) taxes on business investment rise
(B) $100
(C) $400 78. Money multiplier is
(D) $0 (A) 1/ CRR
(E) $450 (B) 1/ SLR
73. Money must be scarce. (C) 1/ LRR
(A) Limited Supply (D) NONE OF THESE
(B) Medium of Exchange 79. If a $20 bill is still worth $20 in 10 years,
(C) Store of Value which function of money is being used?
(D) Fiat Money (A) Medium of Exchange
(B) Store of Value
74. A commercial bank sells $10k in securities.
The reserve requirement is 10%. How (C) Unit of Account
much of the money can the bank lend? (D) Acceptable
(A) $10, 000
80. The function of money that provides a
(B) $9, 000 means for comparing the values of goods
(C) $1, 000 and services.
(D) $0 (A) Unit of Account
75. A listing of financial assets owned by an (B) Store of Value
individual (C) Medium of Exchange
(A) Portfolio (D) Acceptability
71. C 72. C 73. A 74. A 75. A 76. D 77. C 78. C 79. B 80. A 81. C
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Answer key at end of each page Answer key at end of each page Answer key at end of each page
The excellent aid for better rank. The excellent aid for better rank. The excellent aid for better rank.
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DESIGNED FOR SURE SUCCESS

It is my deepest gratitude and warmest

To my mother JOYTSNA CHANGDER

who has been a constant source of Knowledge and in-

The aim of this publication is to sup-

1.1 Micro Economics

31. Which economic prblm involves selection (B) Identical Products

(A) Market 70. Which of the following are true in

129. According to the , quantity demanded (B) change in quantity demanded

139. SSEMI 3 a:If the price of an item in- (A) Supply

152. C 153. C 154. A 155. B 156. D 157. B 158. A 159. D 160. B

160. VOCABULARY:A maximum legal price (C) product market

189. If a new, huge oil reservoir was found

(B) Productivity (B) How to produce

214. The branch of economics that studies

216. B 217. B 218. C 219. C 220. C 221. C 222. C 223. A 224. B

266. The branch of economics that studies (B) Desires

277. Sending one of your workers back to (A) Business news

352. A market in which profit opportunities (A) the substitution effect

363. Name a country that has a command (C) Mighty sword

418. It is comes from Greek word mikros, (C) Theory of Relativity

(B) Longevity 489. Lucas fixes his friend’s sink. He is pro-

504. Does an increase in Fixed Costs affect a

506. Scarcity is a problem: (C) Resumption of steady productivity

602. During the planning period highest (A) corporation

(C) utilities 668. Which of the following is true about a

680. The demand curve shows (B) $100

702. Which of the following would be a 707. What is economic choice?

(B) Traditional (A) Average total cost will increase

809. B 810. D 811. B 812. B 813. D 814. D 815. D 816. C 817. A

(B) Variable Costs 822. The opportunity cost of 100 kg of rice

(B) Seasonal (A) A person

1.2 Macro Economics

(D) a decline in MPC can cause GDP to (C) lower taxes

(A) supply increase 95. If the government increases spending but

111. This group is responsible for implement- (B) K, R

134. In the gross domestic product, the 139. In MV the M represent

156. is a way to illustrate how a regular (B) Someone on maternity/paternity

209. The rate of unemployment is 214. A lifeguard is hired on at Pensacola

243. C 244. D 245. D 246. A 247. C 248. D 249. C 250. B 251. B

252. C 253. D 254. B 255. A 256. B 257. D 258. A 259. D 260. A

273. A 274. D 275. A 276. B 277. B 278. B 279. C 280. D 281. A

313. A 314. B 315. A 316. D 317. D 318. A 319. B 320. A 321. A

406. According to cash balance Approach if M

454. GDP is the total value of goods and ser-

(C) more socialist (B) decrease government spending and

(B) Market structure (C) the effects of reduction of wages on

609. The study of the nation’s economy as a

611. United States of Fredo’s Consumption

(A) sell bonds 650. A country is said to be experiencing in-

709. Which of the following is NOT a valid ex- (C) 3

736. High levels of GDP per capita indicate

752. How does a government-funded con- 757. GDP stands for

774. Money (B) business fluctuations

797. B 798. C 799. A 800. A 801. C 802. C 803. C 804. D 805. A

(B) Structural Unemployment (B) classical policy

840. B 841. B 842. D 843. A 844. B 845. D 1. C 2. B 3. B

4. What’s the rounding rule for the estimate (B) 1 and 6

4. C 5. D 6. A 7. A 8. A 9. A 10. D 11. D 12. D 13. A 14. B 15. C

15. Which question is best suited for a statis- (C) I-III-IV-II

16. D 17. A 18. A 19. C 20. C 21. C 22. A 23. D 24. C

35. REVIEW:When a graph is symmetrical, (C) 7