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Economics Mcqs 4423 MCQs [All-Courses]

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Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

All Topics  4423

If the state Bank of Pakistan wished to pursue an expansionary monetary policy it would ?
A increase the minimum reserve asset ratio.
B buy government securities on the open market
C raise interest rates
D sell government securities on the open market
Correct Answer: buy government securities on the open market
By financial crowding out economist mean ?
A credit rationing
B government borrowing drives up interest rates
C Bank of England controls on commercial bank lending
D what the government borrows cannot be used for private investment
Correct Answer: government borrowing drives up interest rates
The idea that the money supply should change to accommodate changes in aggregate demand is associated with the idea of ?
A Margaret Thatcher
B Ronald Reagan
C Milton Friedman
D John Maynard Keynes
Correct Answer: Milton Friedman
The multiple by which total deposits can increase for every pound increase in reserves is the ?
A Money multiplier
B liquidity ratio
C bank’s line of credit
D required reserve ratio
Correct Answer: Money multiplier
The response lag of stabilization policy represents ?
A the time that it takes for policy makers to recognize the existence of boom of bust
B the time needed for parliament to agree to a tax cut.
C the time that is necessary to put the desired policy into effect
D the time that it takes for the economy to adjust to the new conditions after a new policy has been implemented
Correct Answer: the time that it takes for the economy to adjust to the new conditions after a new policy has been implemented
Time lags which often erode effectiveness of monetary and fiscal policy measures represent ?
A delays in the response of the economy is stabilization policy
B the foreign response to price changes
C the change in exports and imports prices
D the change in exchange rates
Correct Answer: delays in the response of the economy is stabilization policy
The negative effect on the economy that occurs when average tax rates increase because taxpayers have moved into higher income brackets during an expansion is ?
A debt burden
B the Laffer curves
C bracket creep
D fiscal drag
Correct Answer: the Laffer curves
Automatic stabilisers act to ____ government expenditures and ____ government revenues during recessions ?
A increase: increase
B decrease; decrease
C increase; decrease
D decrease; increase
Correct Answer: increase; decrease
Fiscal Policy refers to ?
A The government regulation of financial intermediaries
B The spending and taxing policies used by the government to influence the economy
C The actions of the central bank in controlling the money supply
D The government’s attitude to taxation
Correct Answer: The spending and taxing policies used by the government to influence the economy
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