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UMT - 30 Economics MCQs

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Question;1) WHICH ONE OF THE FOLLOWING HELPS PRESERVE INCENTIVES TO DEVELOP NEW TECHNOLOGIES?A) TARIFFSB) INCOME TAXESC) PATENTSD) QUANTITY RESTRICTIONS ON IMPORTS2) THE RIGHT TO OPENLY SUPPORT AND TO ELECT LEADERS IN A DEMOCRATIC WAY IS KNOWN ASA) POLITICAL FREEDOMB) EXTERNAL FREEDOMC) ECONOMIC FREEDOMD) CONSTITUTIONAL FREEDOM3) WHEN THERE IS ECONOMIC GROWTH IS A COUNTRY, THE DISTRIBUTION OF OUTPUT AND INCOMEA) WILL ALWAYS BECOME LESS EQUALB) WILL BE UNAFFECTEDC) WILL ALWAYS BECOME MORE EQUALD) CAN CHANGE IN ANY NUMBER OF WAYS4) WHEN PRESENT, THE THREAT OF NATIONALIZATION INHIBITS ECONOMIC GROWTHA) TRUEB) FALSE5) THE SPEED AT WHICH THE PRODUCTION POSSIBILITIES CURVE SHIFTS OUTWARD INDICATESA) THE PROCESS OF RESEARCH AND DEVELOPMENTB) THE RATE OF ECONOMIC GROWTHC) THE LEVEL OF LABOR FORCE PARTICIPATIOND) THE RATE OF UNEMPLOYMENT6) WHICH OF THE FOLLOWING WOULD TYPICALLY BE CONSIDERED A COST OF ECONOMIC GROWTH?A) DECREASED LEVELS OF HEALTHB) URBAN CONGESTIONC) INCREASED ILLETERACYD) INCREASED POVERTY7) OTHER FACTORS HELD CONSTANT, A RISE IN THE PRICE LEVEL IN JAPAN THAT EXCEEDS THE RISE IN THE PRICE LEVEL IN OTHER COUNTRIES WILL MOST LIKELY RESULT INA) DECREASE IN THE SUPPLY OF THE JAPANESE YENB) AN INCREASE IN THE SUPPLY OF JAPANESE GOODSC) A DEPRECIATE OF THE DOLLARD) A DECLINE IN THE LEVEL OF JAPANESE EXPORTS12) IF THE INFLATION RATE IN JAPAN IS HIGHER THAN THE INFLATION RATE IN THE UNITED STATESA) THERE WILL BE NO CHANGE IN U.S. IMPORTS FROM JAPANB) THERE WILL BE A DECREASE IN U.S. IMPORTS FROM JAPANC) THERE WILL BE AN INCREASE IN U.S. IMPORTS FROM JAPAND) THERE WILL BE AN INCREASE IN JAPANESE EXPORTS TO THE UNITED STATES8) AN INCREASE IN THE SUPPLY OF A CURRENCY ON THE FOREIGN EXCHANGE MARKET WILL LEAD TO ITS DEPRECIATION, WHICH WILL MAKE ITS EXPORTS RELATIVELY AFFORDABLE IN OTHER COUNTRIESA) TRUEB) FALSE9) AN INCREASE IN THE U.S. DEMAND FOR JAPANESE YEN CAUSESA) AN INCREASE IN THE DOLLAR-PRICE OF YENB) AN INCREASE IN THE DEMAND FOR U.S. GOODSC) AN INCREASE IN THE YEN-PRICE OF DOLLARSD) A DECREASE IN THE SUPPLY OF YEN10) WHEN A JAPANESE PERSON BUYS SOFTWARE FROM AN AMERICAN PRODUCER, THERE IS A(N)A) DECREASE IN THE SUPPLY OF YEN IN THE FOREIGN EXCHANGEB) INCREASE IN THE DEMAND FOR YEN IN THE FOREIGN EXCHANGED) DECREASE IN THE DEMAND FOR YEN IN THE FOREIGN EXCHANGEC) INCREASE IN THE SUPPLY OF YEN IN THE FOREIGN EXCHANGE11) THE EFFECT OF A GIFT GIVEN TO A U.S. CITIZEN FROM A FOREIGNER IS TOA) INCREASE THE BALANCE OF PAYMENTSB) HAVE NO EFFECT ON THE BALANCE OF PAYMENTS IF THE GIFT WAS MADE BY A FOREIGN COUNTRYC) DECREASE THE BALANCE OF PAYMENTSD) HAVE NO EFFECT ON THE BALANCE OF PAYMENTS IF THE GIFT WAS MADE IN THE UNITED STATES12) THE SUPPLY OF DOLLARS IN FOREIGN EXCHANGE MARKETS IS A) DETERMINED BY THE AMERICAN DEMAND FOR FOREIGN GOODSB) DETERMINED BY THE FEDERAL RESERVE BOARDC) A FUNCTION OF THE INTERNATIONAL BANKING SYSTEMD) DETERMINED BY THE DEMAND FOR AMERICAN GOODS13) WHICH OF THE FOLLOWING IS FALSE?A) ONE TOOL THE FED CAN USE TO CHANGE THE MONEY SUPPLY IS TO ALTER THE RESERVE REQUIREMENTB) IF THE FED FOLLOWS A MONETARY RULE, THE MONEY SUPPLY WILL NEVER INCREASEC) WHEN THE FED INJECTS MORE RESERVES INTO THE BANKING SYSTEM, THE MONEY SUPPLY WILL INCREASED) IF THE FED WANTS TO MAINTAIN INTEREST RATES AT A GIVEN LEVEL, IT WILL HAVE TO ALLOW THE RATE OF MONEY SUPPLY GROWTH TO VARY14) THE SHORT-RUN EFFECT OF AN INCREASE IN THE SUPPLY OF MONEY ISA) AN INCREASE IN THE PRICE LEVEL, A DECREASE IN REAL NATIONAL INCOME, BUT AN INCREASE IN NOMINAL NATIONAL INCOMEB) AN INCREASE IN BOTH REAL NATIONAL INCOME AND THE PRICE LEVELC) AN INCREASE IN REAL NATIONAL INCOME BUT NOT IN THE PRICE LEVELD) AN INCREASE IN THE PRICE LEVEL BUT NOT IN REAL NATIONAL INCOME15) THE FED?S OPEN MARKET COMMITTEE ENGAGES IN CONTRATIONARY MONETARY POLICY BYA) SELLING BONDSB) LOWERING INTEREST RATESC) BUYING BONDSD) CREATING EXCESS RESERVES16) TO THE EXTENT THAT THERE ARE TIME LAGS PRESENT IN THE IMPLEMENTATION OF MONETARY POLICY, ITS EFFECTIVENESS IS LESSENED.A) TRUEB) FALSE17) OPEN MARKET OPERATIONS ALTER THE LEVEL OF RESERVES IN THE BANKING SYSTEMA) TRUEB) FALSE18) IN THE FED INCREASES THE DISCOUNT RATE,A) BANKS WILL FACE A HIGHER COST OF BORROWING AND WILL PASS SOME OF THIS COST ONTO CUSTOMERS IN TERMS OF HIGHER INTEREST RATESB) IT WILL THEN DECREASE REQUIRED RESERVE RATIO TO OFFSET ANY POSSIBLE CONTRACTIONARY EFFECTC) IT WILL THEN INCREASE THE REQUIRED RESERVE RATIO AS WELLD) IT WILL BE EASIER FOR BANKS TO SECURE THE RESERVES NEEDED TO SUPPORT A HIGHER VOLUME OF COMMERCIAL LOANS19) THE DIRECT EFFECT OF AN INCREASE IN THE MONEY SUPPLY IS THATA) PEOPLE WILL SPEND THE EXTRA MONEY, CAUSING THE AGGREGATE DEMAND CURVE TO SHIFT TO THE RIGHT AND RESULTING IN A BOOST TO ECONOMIC ACTIVITYB) PEOPLE WILL SPEND THE EXTRA MONEY, CAUSING THE AGGREGATE DEMAND CURVE TO SHIFT TO THE LEFT AND RESULTING IN RECESSIONC) PEOPLE WILL SAVE THE MONEY, CAUSING AN INCREASE IN BANK DEPOSITS WITH THE RESULT THAT INTEREST RATES WILL INCREASED) PEOPLE WILL SAVE MORE MONEY, CAUSING A DECREASE IN ECONOMIC ACTIVITY AND A FALL IN PRICES20) ECONOMISTS WHO GENERALLY BELIEVE THAT ANY EXCESSIVE GROWTH IN THE MONEY SUPPLY WILL DO LITTLE MORE THAN CAUSE INFLATION ARE CALLEDA) MONETARISTSB) KEYNESIANSC) SUPPLY SIDERSD) CLASSICALS21) IF THE PREVAILING RATE OF INTEREST IN THE ECONOMY WERE TO RISE, WHAT EFFECT WOULD THIS HAVE ON THE MARKET PRICE OF EXISTING BONDS?A) THE MARKET PRICE IS NOT RELATED TO THE PREVAILING RATE OF INTERESTB) THE MARKET PRICE WOULD ALSO RISEC) THE MARKET PRICE FALLS WHEN THE REAL INTEREST RATE IS NEGATIVED) THE MARKET PRICE WOULD FALL22) TO INCREASE AGGREGATE DEMAND, THE FED WOULD A) SELL BONDS B) DECREASE THE MONEY SUPPLYC) INCREASE INTEREST RATESD) INCREASE THE MONEY SUPPLY23) KEYNESIAN THEORY ARGUES THAT A) DECREASE IN THE MONEY SUPPLY LEAD TO INCREASE IN THE INTEREST RATE WHICH INCREASES INVESTMENT WHICH INCREASES THE LEVEL OF REAL GDPB) INCREASE IN THE MONEY SUPPLY LEAD TO DECREASES IN THE INTEREST RATE WHICH INCREASES INVESTMENT WHICH INCREASES THE LEVEL OF REAL GDPC) INCREASES IN THE MONEY SUPPLY LEAD TO DECREASES IN THE INTEREST RATE WHICH DECREASES INVESTMENT WHICH DECREASES THE LEVEL OF REAL GDPD) INCREASES IN THE MONEY SUPPLY CAUSE CONSUMERS TO SPEND MORE WHICH REDUCES THE UNEMPLOYMENT RATE AND THEREFORE INCREASES REAL GDP24) A DIFFERENCE BETWEEN A QUOTA AND A TARIFF IS THAT A) A TARIFF GENERATES A GREATER REDUCTION IN EXPORTSB) A TARIFF GENERATES A HIGHER PRICE THAN A QUOTA DOESC) THE GOVERNMENT COLLECTS REVENUES FROM A TARIFF, WHICH DOES NOT HAPPEN WITH A QUOTAD) A QUOTA INCREASES PROFITS OF DOMESTIC PRODUCERS, WHICH DOES NOT HAPPEN WITH A TARIFF25) IN THE UNITED STATES TODAY, IMPORTS ARE OVERA) 22 PERCENT OF GDPB) 26 PERCENT OF GDPC) 14 PERCENT OF GDPD) 18 PERCENT OF GDP26) WHICH OF THE FOLLOWING IS NOT A BENEFIT OF INTERNATIONAL TRADE?A) IT RESULTS IN A TRANSMISSION OF IDEASB) IT INCREASES OVERALL OUTPUTC) IT RESULTS IN THE TRANSMISSION OF NEW PROCESSESD) IT PROMOTES SELF SUFFICIENCY27) SUPPOSE AN INDUSTRY RECEIVES PROTECTION FROM THE GOVERNMENT IN THE FORM OF TARIFFS. A NUMBER OF YEARS LATER, IT IS OBSERVED THAT THE QUANTITY SUPPLIED BY DOMESTIC FIRMS HAD DECREASED AND THAT THE DOMESTIC PRICE WAS SUBTANTIALLY GREATER THAN THE WORLD PRICE. WE COULD CONCLUDE THATA) REMOVAL OF THE TARIFF WOULD ACTUALLY CAUASE DOMESTIC OUTPUT TO INCREASE AND PRICE TO FALLB) THE TARIFF HAD BEEN IMPOSED TO COUNTERACT DUMPING AND HAD BEEN SUCCESSFULC) REMOVAL OF THE TARIFF WOULD CAUSE DOMESTIC OUTPUT TO FALL EVEN FURTHERD) THE TARIFF HAD BEEN IMPOSED TO PROTECT AN INFANT INDUSTRY AND THAT THE INDUSTRY STILL NEEDED PROTECTION28) THE EFFECT OF A TARIFF IS TO SHIFT THE DEMAND CURVE FOR A GOOD TO THE RIGHT A) TRUEB) FALSE29) WHICH ONE OF THE FOLLOWING IS FALSE?A) AS IMPORTS INTO A COUNTRY INCREASE, ITS UNEMPLOYMENT RATE WILL INCREASEB) A NATION PAYS FOR ITS IMPORTS THROUGH ITS EXPORTSC) TRADE ALLOWS EACH COUNTRY TO SPECIALIZE IN PRODUCING THOSE GOODS FOR WHICH IT ENJOYS A COMPARATIVE ADVANTAGED) BOTH TARIFFS AND QUOTAS REDUCE THE VOLUME OF TRADE30) THE INDUSTRIES RECEIVING THE MOST IMPORT PROTECTIONS HAVE EXPERIENCED THE BIGGEST INCREASE IN EMPLOYMENTA) TRUEB) FALSE

 

Paper#56827 | Written in 18-Jul-2015

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