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

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

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d is positively sloped

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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

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bdecrease growth

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c increases unemployment

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d decreases inflation

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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

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

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

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dThe sum of the unemployment rate and the inflation rate

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The essential difference between capitalism and socialism is that ?


acapitalism exploits the worker and socialism exploits the property owner

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

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ccapitalism grows through rent seeking and socialism grows through government direction

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

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


amonopolistic business from abroad

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breactionary ruling coalitions

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cweak domestic middle class

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dAll of the above

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View Answer All of the above

OECD stands for ?


aOrganization for Economic Cooperation and Development and Development

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bOil Exporting Countries Development

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cOrganization for Environmental cooperative Department

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d Open Economies Caucus on Development

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For Rosentein Rodan a major indivisibility is in ?


aSupply

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b infrastructure

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cagriculture

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dservices

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View Answer infrastructure

The Vicious circle theory indicates that ?


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

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bas countries grow richer they save less

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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

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d market size is large in LDCs

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Feudalism was undercut by?


a the migration of serfs to the town

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bfactory competition with handicraft and manorial production

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cexpanded transport trade, discovery and new international markets

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d I, II and III only

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View Answer I, II and III only

Adam Smith advocated ?


a laissez faire

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b the invisible hand

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ccompetitive markets

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d I , II and III only

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