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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

The total quantity of goods and services produced (or supplied) in an economy in a given period is ?
A aggregate investment
B aggregate expenditure
C aggregate demand
D aggregate output
Correct Answer: aggregate output
An outward shift in the demand for money other things being equals should lead to ?
A A lower interest rate but the same quantity of money
B A higher interest rate but the same quantity of money
C A higher quantity of money but lower interest rates
D A higher quantity of money but the same interest rate
Correct Answer: A higher quantity of money but lower interest rates
To reduce the supply of money the government could ?
A Reduce interest rates
B Buy back government bonds
C Sell government bonds
D Encourage banks to lend
Correct Answer: Encourage banks to lend
According to the quantity theory of money an increase in the money supply is most likely to lead to inflation if ?
A The velocity of circulation decrease
B The number of transaction decrease
C There is deflation
D The velocity of circulation and the number of transactions is constant
Correct Answer: The number of transaction decrease
The liquidity trap occurs when the demand for money ?
A Is perfectly interest elastic
B Is perfectly interest inelastic
C Means that an increase in money supply leads to a fall in the interest rate
D Means that an increases in the money supply leads to an increases in the interest rate
Correct Answer: Is perfectly interest elastic
The difference between goes investment and net investment is ?
A Depreciation
B Acceleration
C Declaration
D Capital investment
Correct Answer: Declaration
Investment is a unstable element of aggregate demand because it depends heavily on ?
A Government policy
B Expectations
C National income
D Historic trends
Correct Answer: Government policy
A profit maximising firm will invest up to the level of investment where ?
A The cost of borrowing equals the marginal efficiency of capital
B The cost of borrowing is greater than the marginal efficiency of capital
C The cost of borrowing is less then the marginal efficiency of capital
D The cost of borrowing equals the marginal propensity to consume
Correct Answer: The cost of borrowing is less then the marginal efficiency of capital
The accelerator assumes ?
A The marginal propensity to consume is constant
B The economy is at full employment
C There is a constant relationship between net investment and the rate of change of output
D The multiplier is constant
Correct Answer: There is a constant relationship between net investment and the rate of change of output
An outward shift in the Marginal Efficiency of Capital should ?
A Decrease consumption
B Increase aggregate demand
C Reduce aggregate supply
D Slow economic growth
Correct Answer: Reduce aggregate supply
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