Economics Solved MCQs Test 01 Preparation Online

Test Instructions

Economics Solved MCQs Test 01 Preparation Online

1. Assume that Potential Real GDP equals $10,000. National Income is therefore $10,000. Of this, consumers will pay $2,000 in taxes, save $1,000, and spend $7,000 on consumer goods. Business Investment spending is $2000. In order to avoid recessions and inflation (to have equilibrium), the government should have a ?
A.
B.
C.
D.

2. “Crowding out” means that ?
A.
B.
C.
D.

3. For which of the following reasons might inflation cause Real GDP to grow slower than it otherwise would ?
A.
B.
C.
D.

4. If the nominal interest rate is 5% and the inflation rate is 2%, the real interest rate is ?
A.
B.
C.
D.

5. Which of the following is an automatic stabilizer ?
A.
B.
C.
D.

6. Disposable Income is equal to ?
A.
B.
C.
D.

7. Which of the following groups is most hurt by unexpected inflation ?
A.
B.
C.
D.

8. If the government lowers taxes by $10 billion, the Real GDP will rise by ?
A.
B.
C.
D.

9. Assume that there are only two goods: A and B In the base year, Quantity Price

A 10 $1

B 10 $4

In the current year, Quantity Price

A 20 $ 5

B 25 $20

The Consumer Price Index (CPI) for the current year is ?
A.
B.
C.
D.

10. According to Keynes, when the Great Depression started, the government should have ?
A.
B.
C.
D.


 

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