Economics MCQs

Page No. 169

The Phrase “twin deficits” refers to ?


aA country’s trade deficit and its government budget deficit


bThe fact that if a country has a trade deficit, its trading partners must also have trade deficits


cthe equality of a country’s saving deficit and its investment deficit


d a country’s trade deficit and its net capital outflow deficit



An increase in the Pakistan’s government budget deficit ?


a Increase Pakistan’s net exports and decrease Pakistan’s net capital outflow


bdecreases Pakistan’s net exports and Pakistan’s net Capital outflow the Pakistan’s same amount


cIncrease Pakistan’s net exports and Pakistan’s net capital outflow the same amount


ddecreases Pakistan’s net exports and increase Pakistan’s net capital outflow



Which of the following statement regarding the loanable funds market is true ?


aA decrease in the government budget deficit increase the real interest rate


bAn increase in the government budget deficit shifts the supply of loanable funds to the right


c An increase in private saving shifts the supply of loanable funds to the left


d An increase in the government budget deficit shifts the supply of loanable funds to the left



Which of the following statements regarding the loanable funds market is not true ?


aA decrease in a country’s net capital outflow shifts the demand for loanable funds to the left


bAn increase in domestic investment shifts the demand for loanable funds to the right


cAn increase in a country’s net capital outflow shifts the supply of loanable funds to the left


dAn increase in a country’s net capital outflow raises its real interest rate



In the 1980s economists studying the source of growth observed no positive relationship between information and communications technology (ICT) investments and productivity This is known as ?


aSolow residual


b productivity paradox


ctechnological followership


d Stieglitz discrepancies



Market price adjusted to consider differences between social cost-benefit and private cost-benefit calculations are ?


aprice distortions


b consumer surplus


c shadow prices


dexchange rates


View Answer shadow prices

An example of external diseconomies is ?


ascholarship for technical education


bR&D in robotics


ca new drug to cure AIDS


denvironmental pollution



Vaccinating people for measles, rubella, polio and cholera to substantially increase net social benefits by improving the health and productivity of the population is an example of ?


aeconomies of scale


bexternal economies


cnegative externality


d net present value


View Answer external economies

Which of the following is True is LDCs ?


aLabor is often underemployed, having a low alternative cost


bIt is cheaper to hire labor in LDC because its productivity is relatively higher than in DCs


cAdapting existing Western technology to LDC conditions requires little creativity


d Labor is usually considered the scarce factor



Which of the following is not True ?


a In 1990 the world had 98 mainline phones and 2 mobile phones per 1,000 people: in 2001 169 mainline and 153 mobiles per 1000


bMobile phones do not require the massive infrastructure investment that mainline telephone require


cIn 2001 the World information technology expenditures were about 1/20 of 1% of world gross investment


dIn 2001 internet users per 1000 people in middle income countries were greater than high income countries



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