Economics Grand Test: Total Marks 50 Pass Marks 28 0.
25 negative marking
1) APC=MPC is the long Run
(a)Relative income (b) Permanent Income (c) Life Cycle Hypothesis (d) All of these
2) Transitory income effect the consumption in
(a)Long Run (b) Short Run (c) in both Time Period (d) none of these
3) Future Consumption can not be measure accurately
(a)Random walk model (b) Friedman theory (c) Permanent income theory (d) life cycle theory
4) Price level and money demand has ---------Relation.
(a)Negative (b) positive (c) its depend on situation (d) none of these
5) Let, money quantity remain same but velocity of money increase what happen with price
(a)Increase (d) decrease (c) remain same (d) none of these
6) If Required Reserve Ratio increase than Credit Creation ……………..
(a)Decrease (d) increase (c) remain Same (d) none of these
7) Takaful is Islamic name use for
(a)Tax for non-Muslim (b) import Tax (d) Export Tax (c) insurance
8) Which type of cheque more safe?
(a)Order (b) bearer (c) cross (d) none of these
9) Which one is qualitative measure to control money supply?
(a)Change in Margin Requirements (b) Credit Rationing (c) Discount Rate (d) change RR
10) The deposit multiplier always
(a)Greater to one (b) equal to one (c) less than to one (d) none of these
11) Money is …………………..in classical system
(a)Store of value (b) medium of exchange (c) both a and b (d) none
12) If in QTM v=4 then k will be
(a)2 (b) ½ (c) ¼ (d) none
13) If labor is the only input in classical system then MC equals
(a)MPN/W (b) w* MPN (c) W/MPN (d) none
14) If Govt. spending is excess of its taxes then private investor will
(a)Discourage (b) encourage (c) stay neutral (d) none
15) If there is only one commodity in Pakistan having price 0.25 Rs/unit, and quantity of money is 100 Rs.
Real money balance equals
(a)25 (b) 200 (c) 400 (d) 300
16) If the market basket of goods that now cost Rs. 120 only cost Rs. 110 last year the rate of inflation this
year is
(a)9.1% (b) 10% (c) 15% (d) 20%
17) If there is a tax cut in classical system and loss is financed by borrowing there will be effect on
(a)Output and prices (b) output (c) no effect (d) prices will increase
18) Core inflation excludes
(a)Food prices (b) energy products prices (c) both a and b (d) none
19) The unemployment that is occur due to recession in the economy is called
(a)Frictional unemployment (b) structural unemployment (c) cyclical unemployment (d) none
20)Technology is an…………….variable in Solow model
(a)Exogenous (b) endogenous (c) dummy (d) none
21) At steady state of capital growth of capital stock is
(a)Zero (b) more than zero (c) less than zero (d) none
22) Identify the model which is concerned with the golden age equilibrium
(a)Kaldor model (b) Joan Robinson model (c) Keynesian model (d) Domar model
23) If the money wage index were to rise by 50% between 2015 and 2020 and the price index were to rise
by 20% over the same period then the real wage index would rise by
(a)35% (b) 30% (c) 25% (d) 20%
24) If revenue lost by tax cut is financed by selling bonds then prices will
(a)Remains the same (b) increase (c) decrease (d) none
25)The rate of interest and present value of bonds are
(a)Directly related (b) no related (c) indirectly related (d) none
Muhammad Arif
Lecturer in Economics
Govt P-G College Khanewal
313 621 78 37
26) Identify the world’s longest river with the length of
6,521 km.
(a)Amazon (b) Mississippi (c) Nile (d) none of the above
27)The ‘United Arab Emirates’ (U.A.E) Comprises of:
(a) Abu Dhabi (b) Sharjah (c) Fujairah (d) All the above
28)Which Country is called “Land of Milk and Honey”?
(a) Lebanon (b) Japan (c) Canada (d) Turkey
29)Identify the biggest Island:
(a) Greenland (b) Iceland (c) New Zealand (d) Taiwan
30)Identify the Largest ‘Salt-Water Lake’ in the world:
(a) Lake Superior (b) Baikal Lake (c) Caspian Sea (d) Mancher Lake
31) Iraq is new name of
(a)Mesopotamia b)Constantinople (c) Angore (d) None of these
32) Myanmar new name
(a)Burma (b) Congo (c) Sri lanka (d)None of these
33) Which part of body damage from hepatitis virus
(a)Kidney (b) lungs (c) liver (d) spleen
34) Which is the smallest state in area?
(a) Bahrain (b) Maldives (c) Malta (d) Brunei
35) Which part of the world is called “The Land of free people”?
(a) Switzerland (b) Thailand (c) West-Indies (d) U.K
36) The model presented by W. Arthur Lewis in 1950 is known as______________
(a)Subsistence labour b) Marginal Labour (c) Unlimited Supply of Labour (d) The effective supply of
Subsistence labour
37) According the Unbalanced Growth Theory investment should be made in______________
(a)Agricultural sector only (b)All Sectors of the Economy (c) Industry Sector only (d) Selected sectors
38) According to the Rostow stages of growth Model Drive to Maturity is ____________ stage of growth
(a)1st (b)2nd (c) 4th (d)3rd
39) A monopolist where the market demand curve for the product is given by P = 520 – 2Q. This
monopolist has marginal costs that can be expressed as MC = 100 + 2Q and total costs that can be
expressed as TC = 100Q + Q2 + 50. Given the above data, what are this monopolist’s profit-maximizing
price and output if it charges a single price?
(a)360 (b)380 (c) 260 (d) 480
40) If one producer can supply the entire market at a lower per-unit cost than if the same market were
being supplied by more than one firm, it is referred to as a __________.
(a) Full-employment monopoly (b) Monopsony (c) Duopoly (d) Natural monopoly
41) If a government policy or other external force moves a competitive market away from the equilibrium
level of output, it will create inefficiency known as
(a) Economic growth (b) Monopoly profit (c) Price discrimination (d) Deadweight loss
42) Suppose the market for wheat is perfectly competitive. The demand for any one producer’s wheat is
(a) Downward sloping (b) Horizontal (c) Perfectly inelastic (d) Upward sloping
43) The shut-down point is located at
(a) A price of zero (b) The maximum of total revenue (c) The minimum of average variable cost (d) The
minimum of average total cost
44) When the labour market in the United States is strong, unemployment is low, and incomes are rising,
we expect to see
(a) No change in the aggregate demand (AD) curve (b) A downward movement along the AD curve (c) An
upward movement along the AD curve (d) An increase in the AD curve
45) Which of the following would cause a nation’s potential gross domestic product (GDP) to decrease?
(a) A decrease in energy prices (b) An increase in personal income taxes (c) A decrease in high school
graduation students rates (d) An increase in nominal wages
46) The relation between MR and price elasticity (e) is shown by
(a) MR = P (1 - 1/e) (b) MR = e (P - 1/P) (c) MR = P (e - 1/p) (d)MR = e (1 - 1/p)
47) If GNP is 600 cr. and NNP is 500 cr. Then depreciation is:
(a) 100 (b) 75 (c) 50 (d) 25
48) At a positively skewed distribution the relation between M (mean), Md (median) and Mo (mode):
(a) M = Md = Mo (b) M> Md = Mo (c) M < Md < Mo (d) M> Md > Mo
49) We make some kind of error while rejecting a true null hypothesis. When is it true?
(a) Type 1 error (b) Type 2 error (c) Type 3 error (d) None of the above
50) When data are collected at the same point of time for several individuals. The date is called:
(a)Time series data (b) Cross section data (c) Pooled data (d) None of the above
Muhammad Arif
Lecturer in Economics
Govt P-G College Khanewal
313 621 78 37
