Economics Practice MCQ Page 41
Multiple Choice questions for Economics in the sets of 10 each on one page with questions and answers. All sets are useful in the preparation of subject tests for employment or admission.
Question: 3626 The aggregate demand curve in the Keynesian model is
- vertical because of unemployment
- horizontal because of unemployment
- downward sloping because as any good becomes more expensive, people buy less of it
- downward sloping because as prices rise, real wealth falls, reducing consumption
- downward sloping because households spend less when inflation is high
Question: 3629 An increase in the marginal propensity to consume causes the expenditure multiplier to
- decrease
- stay the same
- increase
- increase by the same amount
- change unpredictably
Question: 3630 If twenty cents out of each additional dollar of income is saved then the simple expenditure multiplier is
- one
- two
- one fifth
- five
- twenty
Question: 3632 An increase in the foreign price level with the nominal exchange rate unchanged causes
- imports and exports to increase
- imports and exports to decrease
- no change in imports or exports
- imports to increase and exports to decrease
- exports to increase and imports to decrease
Question: 3633 Which of the following is an increase in autonomous expenditures?
- an increase in government spending
- an increase in taxes
- an increase in the marginal propensity to consume
- an increase in the marginal propensity to save
- an increase in imports
Question: 3635 In the income/expenditure model, an increase in investment expenditures causes output to
- increase by less than the change in investment
- increase by the same amount as the change in investment
- increase by more than the change in investment
- decrease by less than the change in investment
- decrease by more than the change in investment
Question: 3636 If the marginal propensity to consume is 0.75 then, holding interest rates constant, a $1 billion increase i taxes will cause the Keynesian equilibrium level of output to
- increase by $4 billion
- increase by $3 billion
- decrease by $1 billion
- decrease by $3 billion
- decrease by $4 billion
Question: 3637 If investment increase, then the equilibrium amount of saving
- decreases
- stay s the same
- increases by less than investment increases
- increases by the same amount as investment
- increases by more than investment increases
Question: 3638 According to the autonomous expenditure multiplier in the income/expenditure model, an increase in government spending increases output by
- more than an equal increase in investment
- the same amount as an equal increase in investment
- less than an equal increase in investment
- less than an equal reduction in taxes
- the same amount as an equal reduction in taxes
Question: 3639 According to say's law
- demand creates it sown supply
- supply creates its own demand
- the interest rate keeps investment and saving equal
- both b and c are true
- all of the above are true
Question: 3641 Actual total saving equal actual investment
- only at the equilibrium price level
- only at the equilibrium interest rate
- whenever Say's law holds
- always
- when either b or c is true
Question: 3643 According to the classical quantity theory, if the money supply in the economy in the previous problem decreased to $400 billion
- velocity would increase to 6
- velocity would decrease to 3.6
- real output would decrease to $1.600 billion
- the price level would decrease to 96
- velocity real output and the price level would all change
Answers to the questions of Economics on this page
Following list gives the correct choice for the answer of the Economics mcqs.
3626 . D
3629 . C
3630 . D
3632 . E
3633 . A
3635 . C
3636 . D
3637 . D
3638 . B
3639 . D
3641 . D
3643 . D
Select Page Number
MCQ for Practicing Subject Tests