Free Macroeconomics MCQs with Answers

• A. Public expenditure per student for higher education is about ten times as high as for primary education
• B. The expansion of primary education redistributes benefits from the rich to the poor
• C. Economists unanimously agree that LDCs should put greater priority on primary education
• D. Boys are sent to schools far more often than girls

Explanation: Economists recognize the importance of primary education, but they do not agree unanimously on every education-priority policy in LDCs.

• A. About 18 percent of the world's deaths are among children less than five years old
• B. More than 98 percent of child deaths were in LDCs
• C. World-wide child mortality rates increased from 1990 to 2002
• D. 19 of the 20 countries with the highest child mortality were in Africa

Explanation: Global child mortality generally declined between 1990 and 2002, although progress was uneven across countries.

• A. 17 million, 7 million
• B. 7 million, 0.7 million
• C. 3 million, 1 million
• D. 0.5 million, 5 million

Explanation: In 2002, stroke and heart disease accounted for roughly 17 million deaths worldwide, while cancer caused about 7 million.

• A. due to a lack of education
• B. a class system in which the elite are contemptuous of manual work
• C. upper-and middle-class westerners
• D. The lack of bargaining power y cheap labor

Explanation: Myrdal argued that social attitudes can suppress productivity when elites look down on manual work and fail to encourage improvements in…

• A. 30 to 40 years, about the same as in 1995
• B. 30 to 40 years, a fall of more than 10 years from 1995
• C. 50 to 60 years, about the same as in 1995
• D. 70 years, an increase from 1995

Explanation: The forecast reflected the severe impact of HIV/AIDS in southern Africa: life expectancy in Botswana and South Africa was expected to fall…

• A. high formal education and training
• B. better health and physical condition of the labor force
• C. Both a and b are correct
• D. None of the above is correct

Explanation: Higher formal education and training improve workers’ skills, while better health raises their physical and mental capacity to work.

• A. mortality-adjusted lifelong
• B. premature living age
• C. life mortality-fertility ratio
• D. disability-adjusted life years

Explanation: A disability-adjusted life year, or DALY, combines years lost because of premature death with years lived with disability.

• A. individuals pay the full cost of their education
• B. government subsidizes schooling
• C. education persons migrate more
• D. capital and unskilled labor are complements

Explanation: The marginal product model treats education as an investment whose cost is borne by the individual, justified by the higher future…

• A. 60 million
• B. 10 million
• C. 3 million
• D. million

Explanation: The estimate was about 3 million African internet users out of roughly 360 million worldwide users in 2000.

• A. when marginal revenue productivity of labor is zero
• B. the same as seasonal unemployment of LDC agricultural
• C. the rigid factor proportions in LDC agriculture and industry
• D. due to capital formation and the level of technology remaining constant.

Explanation: Disguised unemployment exists when some workers add nothing to total output, so their marginal revenue product is zero.

• A. disguised unemployed
• B. cyclical unemployed
• C. seasonally unemployed
• D. voluntarily unemployed

Explanation: Disguised unemployment can include workers pushed into jobs below their skills or previous level of employment, a pattern seen during…

• A. fertility
• B. population quality
• C. mortality
• D. morbidity

Explanation: Education, training and skills improve the abilities and productivity of people, so they are components of population quality or human…

• A. Protestants disapproved of accumulating wealth
• B. Protestants failed to restrict extravagance and conspicuous consumption
• C. Roman Catholicism expressed its asceticism in a secular vocation
• D. capitalism was most advanced in Protestant countries

Explanation: Weber argued that the Protestant ethic, especially its emphasis on disciplined work and saving, helped foster the spirit of capitalism.

• A. Adam Smith
• B. Max Weber
• C. Joseph Schumpeter
• D. William Baumol

Explanation: Max Weber wrote The Protestant Ethic and the Spirit of Capitalism, linking religious values such as disciplined work and saving with the…

• A. depreciation generally improves the trade balance
• B. depreciation generally hurts the trade balance
• C. no strong generalization is possible
• D. depreciation has no effect on the trade balance

Explanation: The effect of depreciation depends on elasticities, import content and the timing of contracts, so it cannot be assigned one universal…

• A. pass through
• B. absorption
• C. adjustment mechanism
• D. currency contract period

Explanation: Pass-through measures how a devaluation or depreciation is reflected in domestic and foreign prices.

• A. sooner
• B. longer
• C. bigger
• D. smaller

Explanation: A shorter pass-through period means prices respond more quickly to the currency change, so the desirable balance-of-trade effects appear…

• A. improves
• B. worsens
• C. is unaffected
• D. falls for a while before increasing

Explanation: When both exports and imports are contracted in pounds, their pound values are fixed during the currency contract period.

• A. should increase the dollar value of exports
• B. should not have any effect on the dollar value of U.S imports
• C. must increase the balance of trade
• D. All of the above

Explanation: With exports priced in foreign currency, dollar depreciation raises their dollar value, while imports contracted in dollars retain the…

• A. import prices to fall by 10 percent
• B. import prices to rise by 10 percent
• C. export prices to rise by 10 percent
• D. export prices to fall by 10 percent

Explanation: Complete pass-through means the exchange-rate change is fully reflected in import prices measured in the domestic currency.