ECO401 Final Term MCQs Updated by VU Topper RM

Q1. Vu-Topper RM (1 marks)

Naima has just finished school and is waiting to report to his new job at the beginning of the month. Naima is considered to be: A. Frictionally unemployed. B. Employed. C. Structurally unemployed. D. Cyclically unemployed.

Q2. Vu-Topper RM (1 marks)

" Index-linking" is very common in A. USA

B. Australia

C. Latin America D. South A

Q3. Vu-Topper RM (1 marks)

Percentage GDP gap is equal to: A. (Potential GDP – Actual GDP)/Actual GDP B. (Potential GDP – Actual GDP)/Potential GDP

C. (Actual GDP - Potential GDP)/Potential GDP

D. (Actual GDP - Potential GDP)

Q4. Vu-Topper RM (1 marks)

In 1971, Pakistan linked its currency, rupee to: A. Pound Sterling

B. USA Dollar

C. Japanese yen D. Kuwait Dinar

Q5. Vu-Topper RM (1 marks)

In 1920, Germany suffered from: A. Pure inflation B. Inflation C. Deflation

D. Hyperinflation

Q6. Vu-Topper RM (1 marks)

According to Keynes,unemployment arises due to deficiency of A. Aggregate supply

B. Aggregate demand

C. None of above D. Both

Q7. Vu-Topper RM (1 marks)

What will happen if exchange rate decreases from $1 = Pak Rs. 85 to $1 = Pak Rs. 65?

1. It will reduce imports of Pakistan.
2. Its imports and exports will remain unchanged.
3. It will increase exports of Pakistan.
4. It will decrease exports of Pakist

Correct answer: It will increase exports of Pakistan.

Q8. Vu-Topper RM (1 marks)

The percentage annual increase in average price level is: A. The rate of deflation B. The rate of employment C. The rate of unemployment

D. The rate of inflation

Q9. Vu-Topper RM (1 marks)

The most commonly used index to calculate the inflation is: A. Wholesale Price Index (WPI) B. GDP Deflator C. Producer Price Index (PPI)

D. Consumer Price Index (CPI)

Q10. Vu-Topper RM (1 marks)

Measures the value of output during a given year using the prices prevailing during that year is: A. Real GDP B. Nominal effective exchange rate

C. Nominal GDP

D. Real exchange rate

Q11. Vu-Topper RM (1 marks)

Falling inflation means that price level is rising at a(n): A. Fluctuating rate. B. Increasing rate. C. Decreasing rate. D. Constant Rate.

Q12. Vu-Topper RM (1 marks)

When interest rate goes up, the level of Investment will: A. Decrease. B. Increase. C. Remain unchanged. D. First increase, then start decreasing.

Q13. Vu-Topper RM (1 marks)

A government ....... its currency by actively buying it and selling foreign currencies through the foreign exchange market. A. Depreciate

B. Appreciate

C. Devalues D. Revalues

Q14. Vu-Topper RM (1 marks)

The principle that states that a change in investment causes a magnified change in income is termed as the: