All Free Economics MCQs with Answers

• A. Real GDP per capita
• B. Real GDP
• C. Real GDP population
• D. Real GDP plus depreciation

Explanation: Real GDP per capita divides inflation-adjusted output by population, so it approximates the average quantity of goods and services…

• A. Gross National Product adjusted for inflation
• B. Gross Domestic Product adjusted for inflation
• C. Gross Domestic Product plus net property income from abroad
• D. Gross National Product minus depreciation

Explanation: Net National Product is obtained by subtracting depreciation, or capital consumption, from Gross National Product: NNP = GNP −…

• A. investment
• B. net exports
• C. government purchases
• D. consumption
• E. none of these answers

Explanation: A newly built home is a newly produced capital asset, so its purchase is recorded as residential investment.

• A. Consumption in increase by Rs40,000 and net export decreases by Rs40,000
• B. Net exports increase by Rs40,000
• C. There is no impact because this transaction does not involve domestic production
• D. Investment increased by Rs40,000 and net exports increases by Rs40,000

Explanation: The imported BMW raises consumption by Rs40,000 but also raises imports, reducing net exports by Rs40,000.

• A. intermediate production exceeds final production
• B. foreigners are producing more in the Pakistan then Pakistanis are producing in foreign countries
• C. real GNP exceeds nominal GNP
• D. real GDP exceeds nominal GDP

Explanation: GDP counts production within Pakistan, while GNP counts production by Pakistani-owned factors, wherever they operate.

• A. the value of taking a day off from work
• B. consulting services
• C. intermediate sales
• D. illegal drug sales
• E. housework

Explanation: Consulting services are market services produced during the period and are included in GDP.

• A. must have fallen
• B. must have risen
• C. must have stayed the same
• D. may have risen fallen, or stayed the same because there is not enough information to determine what happened to real output

Explanation: Nominal GDP reflects both quantities and prices, so a rise in it does not reveal what happened to real output.

• A. GNP
• B. NNP
• C. Depreciation
• D. Real GDP

Explanation: GDP measures production within a country's borders, while net property income from abroad adjusts this to income received by its…

• A. I and III only
• B. II and III only
• C. I, II and III only
• D. I, II , III only IV

Explanation: A booming export sector can appreciate the currency, weaken other export and import-substitution sectors, and bid up factor and input…

• A. Russia
• B. Saudi Arabia
• C. Iraq
• D. Venezuela

Explanation: Saudi Arabia has roughly one-quarter of proven global oil reserves, very low production costs, and major influence over OPEC output and…

• A. also known as index of Sustainable Economic Welfare per capita
• B. GDP plus resource depletion and environmental cost
• C. resource depletion and environmental cost divided by GDP per capita
• D. increasing from 1976 to 2000

Explanation: The Genuine Progress Indicator developed from the Index of Sustainable Economic Welfare and adjusts consumption for inequality…

• A. Trade deficit
• B. Blind river disease
• C. Dutch disease
• D. Economic turmoil

Explanation: Dutch disease occurs when a resource-export boom appreciates the domestic currency, making manufactured exports less competitive and…

• A. the tragedy of commons
• B. sustainable development
• C. net primary productivity (NPP)
• D. the impossibility theorem

Explanation: Sustainable development combines present economic progress with protection of the ability of future generations to meet their needs.

• A. The total number of children born in a country in given year a divided by labor force
• B. The number of children born to the average woman during her reproductive years.
• C. The number of births in a country divided by total population in a given year.
• D. The number of woman age 15-45 in a country divided by total population

Explanation: TFR estimates the average number of children a woman would have over her reproductive lifetime under current age-specific fertility rates.

• A. population self-sufficiency and constant economic growth
• B. low fertility and mortality
• C. a laissez-faire population policy
• D. a constant returns to scale production function

Explanation: Julian Simon rejected coercive population controls and argued that population growth can stimulate innovation and resource creation…

• A. The World Bank
• B. Thomas Robert Malthus
• C. Julian Simon
• D. Abraham Lincoin

Explanation: Thomas Robert Malthus published An Essay on the Principle of Population, first appearing in 1798.

• A. increasing at an increasing rate
• B. decreasing
• C. zero
• D. 100%

Explanation: A stationary population has zero net growth, meaning births plus immigration equal deaths plus emigration.

• A. labor force participation rate
• B. per capita population ratio
• C. dependency ratio
• D. None of these

Explanation: The dependency ratio compares people usually outside the working-age group, conventionally under 15 and 65 or older, with the working-age…

• A. a decline in fertility
• B. The demographic transition from stage 3 to stage 2
• C. increases in the ratio of labor to capital
• D. an increase in the dependency ratio

Explanation: Urbanization, education, modernization and access to family planning generally reduce the desired number of births and therefore lower…

• A. 40%
• B. 10%
• C. 80%
• D. 0.10%

Explanation: China and India together had roughly 2.4 billion people around 2000, compared with a world population of about 6.1 billion, or close to…