Economics Practice MCQ Page 33

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: 1836   The real interest rate measures the
  1. anticipated rate of inflation.
  2. opportunity cost of spending verses saving.
  3. sum of the nominal interest rate and anticipated inflation.
  4. amount of cash you must actually pay when is borrowed.
Question: 1837   The demand for money(LP curve) shifts in response to changes in the
  1. opportunity cost of holding money.
  2. nominal interest rate.
  3. price of money.
  4. real GDP.
Question: 1838   A monetary system relying upon paper certificates redeemable in gold held by the government could be system of
  1. commodity money.
  2. flat money .
  3. paper money.
  4. bank money.
Question: 1839   According to Say's law
  1. demand creates its own supply.
  2. supply creates its own demand.
  3. the interest rate keeps investment and saving equal.
  4. both b and c are true.
  5. all of the above are true.
Question: 1840   Actual total saving equals actual investment
  1. only at the equilibrium price level .
  2. only at the equilibrium interest rate.
  3. whenever Say's law holds.
  4. always.
  5. when either (b)or (c)
Question: 1841   Classical economists was voluntary.
  1. Say's law held .
  2. prices were flexible.
  3. all unemployment was voluntary.
  4. velocity was independent of the money supply.
  5. the money supply determined output.
Question: 1844   According to the classical quantity theory ,if the money supply in the economy in the previous problem decreased $400 billion,
  1. velocity would increase to 6.
  2. velocity would decrease to 3.6.
  3. real output would decrease to $1,00 billion.
  4. the price level decrease to 96.
  5. velocity,real would ,and the price level would all change.
Question: 1846   In a hyperinflation ,velocity would be very
  1. low because money is scare.
  2. high because money is not valuable.
  3. high because money is losing its value rapidly.
  4. low because no one wants to hold money.
  5. unstable,because people would behave erratically
Question: 1848   If the public discovers that it can get along with less money for a given level of expenditures,then (assuming the money supply and real output are constant)
  1. velocity and the price the level would increase .
  2. velocity and the price level would decrease .
  3. velocity and the price level would decrease .
  4. velocity would increase and the price level would increase.
  5. neither velocity nor the price level would change.
Question: 1849   In the classical quantity theory ,the main connection from the money supply to real output is
  1. through interest rates.
  2. through the price level.
  3. through aggregate demand .
  4. through velocity .
  5. nonexistent.
Question: 1850   In a recession ,classical economists advocated
  1. expansion of the money supply.
  2. contraction of the money supply.
  3. expansion of the government spending .
  4. contraction of government spending .
  5. doing nothing.
Question: 1851   The equation of exchange is written
  1. MQ = PV.
  2. MP = QV.
  3. MV = PQ.
  4. MQ = GDP..
  5. MP = GDP0.