Economics Practice MCQ Page 14

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: 1452   One recent to the higher airline fares for business travelers was to
  1. derive rather than fly across the country .
  2. relocate business operations to major cities.
  3. increase the use of telefax and teleconferencing.
  4. have most businesses buy their own planes so employees could fly for free.
Question: 1454   Many is defined as
  1. currency and coin.
  2. anything valuable.
  3. anything that can be exchanged.
  4. anything widely accepted in exchange for other goods.
  5. any financial assets issued by the government.
Question: 1455   An increase in the amount of saving by households would probably result from
  1. a decline in interest rates.
  2. inflation.
  3. a decrease in roundabout production .
  4. a rise in market interest rates.
  5. decreased desire for future consumption.
Question: 1456   Which of the following is probably a public good?
  1. Parcel delivery service.
  2. Clean streets.
  3. Airline tickets.
  4. Taxi service.
  5. Electricity.
Question: 1458   The payments received by the owners of capital are called.
  1. pure rents.
  2. rent.
  3. quasi rents.
  4. interest .
  5. profits.
Question: 1473   A company 's computer system would depreciate more quickly in an economic sense as a result of
  1. hiring less labor to work with the computer.
  2. a revolutionary innovation in computer hardware.
  3. a change in tax laws allowing greater depreciation expenses.
  4. an increase in the price of computers.
  5. a reduction in the demand for the company's product.
Question: 1474   Holding everything else constant,the stock of capital would grow slowly if there was
  1. increased borrowing by the government .
  2. a lower equilibrium real interest rate.
  3. an increased supply of loanable funds.
  4. an increase in the marginal physical product of capital.
  5. an increase in the expected rate of inflation.
Question: 1475   If the interest rate is 8 percent ,then a loan of $400 will earn interest each year in the amount of
  1. $8.
  2. $40.
  3. $32.
  4. $50.
  5. $5,000.
Question: 1477   If the interest rate is 8 percent ,then the present value of a perpetual stream of payment of $1,000 each is
  1. $8,000.
  2. $12,000.
  3. $10,000.
  4. $1,000.
  5. infinite.
Question: 1478   The reason why professional football players should not strike is
  1. their opportunity costs are relatively low.
  2. no one can replace them.
  3. they do not earn economic rent as football players.
  4. the federal antitrust laws prohibit unions in sports.
Question: 1479   If the market interest rate rises from 10 percent to 12 percent,then the market price of a bond that pays 10 percent of its face value of $1,000 each year forever will
  1. fall from $1,000 to $833.
  2. increase from $1,000 to $1,200.
  3. remain at $1,000.
  4. fall from $1,200 to $1,000.
  5. increase from $833 to $1,000.
Question: 1480   Which of the statement about junk bonds is correct?
  1. Their default rate is approximately 30 percent.
  2. They pay,on average ,more than an investor could earn in the stock market.
  3. They paid for the" merger-mania "of the 1980s.
  4. The higher return is due to higher risk .