Economics Practice MCQ Page 28

Multiple Choice questions for Economics in the sets of 10 each on one page with questions and answers. All sets are usefull in the preparation of subject tests for employment or admission.
Question: 1701   If a social stimulus causes AD to increase crowding out the private sector spending occurs if
  1. SRAS also increases.
  2. SRAS also decreases.
  3. interest rates rise.
  4. the price level falls.
Question: 1702   Which of the following is an automatic stabilizer?
  1. An increase in defense spending .
  2. An expansion of the money supply during a recession.
  3. A legislated tax increase during a boom.
  4. An increase in the number of people receiving unemployment benefits during a recession.
  5. An increase in taxes due to inflation occurring during recession.
Question: 1703   In a recession ,an automatic stabilize shifts the aggregate
  1. supply curve to the right.
  2. demand curve to the right.
  3. supply curve to the left .
  4. demand curve to the left,.
  5. demand and supply curve to the right.
Question: 1707   In an inflationary gap ,appropriate discretionary fiscal policy might include
  1. increasing tax rates.
  2. increasing government spending.
  3. increasing transfer payments.
  4. allowing taxes to increase with unchanged withe unchanged rates due to higher incomes.
  5. increasing the money supply
Question: 1710   If someone who -earns $30,000 pays $30,000 in taxes, then the marginal tax rate is
  1. 0.30.
  2. 0.15.
  3. 0.10.
  4. 0.03.
  5. impossible to determine from the data given.
Question: 1711   In the previous problem ,the average tax rate is
  1. 0.30.
  2. 0.15.
  3. 0.10.
  4. 0.;03.
  5. impossible to determine from the data given.
Question: 1713   A decrease in both average and marginal tax rate leads to
  1. increases in both price and output.
  2. an increase in prices and a decrease in output.
  3. an increase in output and a decrease in prices.
  4. decreases in both prices and output.
  5. an increase in output and either an increase or a decrease in prices
Question: 1715   Discretionary fiscal policy is subject to
  1. only recognition lags.
  2. only implementation lags.
  3. only effectiveness lags.
  4. both recognition and effectiveness lags.
  5. recognition,implementation and effectiveness lags.
Question: 1716   Keynesian monetary policy has a potential inflationary bias because
  1. the self-correcting mechanism always lower raises prices.
  2. the correcting mechanism always raises prices.
  3. monetary policy is relied upon more to eliminate inflation gaps.
  4. monetary policy is relied upon to the increase in the money supply.
Question: 1717   A major problem is using fiscal policy to the help stabilize the economy is the
  1. uncertain impacts of money-supply changes.
  2. link between interest rates and expected inflation.
  3. absence of a line-item veto.
  4. lag creating and implementing fiscal policy.
Question: 1718   One concerned raised by the government 's building of surpluses in the Social Security fund is
  1. fiscal drag.
  2. excessive consumption spending.
  3. the possibility of a trade deficit.
  4. bracket creep.
Question: 1719   The budget process of the federal government includes all of the following expect
  1. executive formulation review.
  2. line-item executive review.
  3. congressional action.
  4. budget execution and control.

Answers to the questions of Economics on this page

Following list gives the correct choice for the answer of the Economics mcqs.
1701 . C       1702 . D       1703 . B       1707 . A       1710 . E       1711 . C       1713 . E       1715 . C       1716 . B       1717 . D       1718 . A       1719 . B      

MCQ for Practicing Subject Tests

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