Economics Solved MCQs Test 01 Preparation Online

1. According to Keynes, when the Great Depression started, the government should have ?

2. 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 ?

3. Which of the following groups is most hurt by unexpected inflation ?

4. Disposable Income is equal to ?

5. Which of the following is an automatic stabilizer ?

6. If the government lowers taxes by $10 billion, the Real GDP will rise by ?

7. For which of the following reasons might inflation cause Real GDP to grow slower than it otherwise would ?

8. “Crowding out” means that ?

9. If the nominal interest rate is 5% and the inflation rate is 2%, the real interest rate is ?

10. 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 ?