Economics MCQs

Page No. 385

If, in the long run, people adjust their price expectations so that all prices and incomes move proportionately to an increase in the price level then the long-run Phillips curve ?


a is vertical


bis negatively sloped


chas a slope that is determined by how fast people adjust their price expectations


d is positively sloped


View Answer is vertical

The Phillips curve is an extension of the model of aggregate supply and aggregate demand because, in the short run, an increase in aggregate demand increase price and ?


adecreases unemployment


bdecrease growth


c increases unemployment


d decreases inflation



The misery index Which some commentators suggest measures the health of the economy, is ?


a The sum of the growth rate of output and the inflation rate


b. The sum of the natural rate of unemployment and the actual rate of unemployment


cThe sum of the inflation rate and the central bank’s refinancing rate


dThe sum of the unemployment rate and the inflation rate



The essential difference between capitalism and socialism is that ?


acapitalism exploits the worker and socialism exploits the property owner


bcapitalism relies on the market to make economic decisions and socialism uses central planning


ccapitalism grows through rent seeking and socialism grows through government direction


d capitalism relies on consumer satisfaction to dictate choices and socialism relies on producer satisfaction



What is Baran’s explanation for underdevelopment in Asia, Africa, and Latin America ?


amonopolistic business from abroad


breactionary ruling coalitions


cweak domestic middle class


dAll of the above


View Answer All of the above

OECD stands for ?


aOrganization for Economic Cooperation and Development and Development


bOil Exporting Countries Development


cOrganization for Environmental cooperative Department


d Open Economies Caucus on Development



For Rosentein Rodan a major indivisibility is in ?


aSupply


b infrastructure


cagriculture


dservices


View Answer infrastructure

The Vicious circle theory indicates that ?


a a country is poor because it has lower productivity but high savings


bas countries grow richer they save less


c poverty perpetuates itself in mutually reinforcing circles on supply and demand sides. poverty perpetuates itself in mutually reinforcing circles on supply and demand sides


d market size is large in LDCs



Feudalism was undercut by?


a the migration of serfs to the town


bfactory competition with handicraft and manorial production


cexpanded transport trade, discovery and new international markets


d I, II and III only


View Answer I, II and III only

Adam Smith advocated ?


a laissez faire


b the invisible hand


ccompetitive markets


d I , II and III only



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