Economics Practice MCQ Page 40

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: 3609   Monetarists believe in controlling inflation through
  1. incomes policies
  2. restraint in fiscal policy
  3. slow money growth
  4. wage/price controls
  5. combination of the above methods
Question: 3611   Compared to monetarists, Keynesians are more concerned about
  1. the effects of rapid inflation
  2. high interest rates
  3. the inefficiencies of wage/price guidelines
  4. recessions resulting from monetary contraction
  5. long run growth in the economy
Question: 3612   Advocates of zero inflation believe that such a policy would
  1. reduce unproductive investments
  2. raise nominal interest rates
  3. reducing long term gains on invested capital
  4. reduce people's ability to keep track of relative price change
Question: 3614   Many supply side economists belive that the money supply should be governed by
  1. the Federal Open Market committee
  2. the Congress
  3. the president
  4. the President and Congress
  5. the stock of gold
Question: 3615   In the long run, after a once and for all change in the money supply
  1. only the price level will increase
  2. real GDP will be higher than the natural level
  3. only the real interest rate will increase
  4. the value of the real money supply will fall
Question: 3616   Aggregate expenditures would rise due to an increase in all of the following except
  1. consumption
  2. investment
  3. government spending
  4. export
  5. imports
Question: 3618   Supply side inflation causes the
  1. AD curve to shift right and up
  2. AD curve to shift left and down
  3. SRAS curve to shift up to the left
  4. SRAS curve to shift down to the right
Question: 3619   The aggregate expenditure curve
  1. is the same as the aggregate demand curve
  2. relates total desired expenditures to income
  3. relates total actual expenditures to income
  4. cannot take account of foreign transaction
  5. has both the properties described in a and b
Question: 3621   The 45- degree line in the income/expenditure model shows points at which
  1. income and expenditure are equal
  2. the economy is at full employment
  3. the MPC is equal to
  4. the MPC is equal to 0.5.
  5. both a and b occur
Question: 3624   Which of the following is not an equivalent statement of Keynesian equilibrium in the model without government?
  1. aggregate expenditures equal output
  2. unintended investment is zero
  3. Unintended investment equals saving
  4. desired investment equal saving
  5. consumption equals income minus desired investment
Question: 3626   The aggregate demand curve in the Keynesian model is
  1. vertical because of unemployment
  2. horizontal because of unemployment
  3. downward sloping because as any good becomes more expensive, people buy less of it
  4. downward sloping because as prices rise, real wealth falls, reducing consumption
  5. downward sloping because households spend less when inflation is high
Question: 3629   An increase in the marginal propensity to consume causes the expenditure multiplier to
  1. decrease
  2. stay the same
  3. increase
  4. increase by the same amount
  5. change unpredictably