Economics MCQ 75

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Economics MCQ 75

75 questions of each 1 marks. This is just a mock test.

60 and above: Excellent
50 to 59: Very good
40 to 49: Fair
Less than 39: Average

Average score of exam takers: 30 - 35

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22. Which is the most lucrative method of deficit financing?

1 point

Accepting concessional loans

Printing money

Issuing treasury bills

Issuing treasury bonds

Clear selection

33. Patanjali company earned a profit of Rs. 500 million and repatriated Rs. 50 million as royalty to its parent company in Mumbai. Such repatriation will affect the Balance of payment by

1 point

Reducing the current account by Rs. 50 million

Reducing the financial account by Rs. 50 million

Reducing the capital account by Rs. 50 million

No effect on balance of payment

Clear selection

2. Which of the following is not true about the Nepalese economy?

1 point

The service sector is the growth driver of Nepalese economy

COVID-19 pandemic caused a meagre downfall in remittance inflow in FY2019/20.

The agriculture sector contributes the least in economic growth in FY2021/22.

Historically, the top 3 imports of Nepal are Diesel, MS Billet, and Petrol.

Clear selection

46. The purchase of goods and services by the German Embassy of Nepal is considered as

1 point

Consumption

Saving

Export

Import

Clear selection

36. Which of the following statement is correct in the language of economics?

1 point

The share of remittance in GDP is about 23 percent.

Remittance contributes about 21 percent in GNP of Nepal.

The share of remittance in GNDI is about 18 percent.

All statements are correct

Clear selection

57. Taylor rule includes the following components

1 point

Real interest rate

Inflation

Output gap

All of above

Clear selection

25. The harmonic mean of -5, -3, 0, 2, 4, .... ∞ is

1 point

∞

1.2

-1.2

Clear selection

51. What is the share of imports from India in the total imports of Nepal?

1 point

50 percent

55 percent

65 percent

70 percent

Clear selection

16. Which service is included in the Tertiary Sector?

1 point

Mining

Communication

Animal Husbandary

Construction

Clear selection

12. According to NLSS-III, what percent of Nepalese are living under poverty?

1 point

25.2 percent

26.4 percent

23.5 percent

28.2 percent

Clear selection

5. The argument that macroeconomic policies fail due to the prevalence of rational expectation is popularly known as *

1 point

Rational Critique

Lucas Critique

Nash Hypothesis

Leontief Paradox

58. According to Taylor rule, what should happen to interest rate, if expected inflation is less than actual inflation?

1 point

Interest rate must decrease

Interest rate must increase

Interest rate is unchanged

None of above

Clear selection

8. Goods that are not used in the production of other goods are called:

1 point

Producer goods

Intermediate goods

Capital goods

Consumption goods

Clear selection

45. The expansion of economic activity over the period is measured by

1 point

Inflation not-adjusted GDP

Inflation adjusted GDP

Inflation not adjusted GNP

All of the given options

Clear selection

17. Which of the following statement is not true?

1 point

The GNP is always greater than GDP in labour exporting countries

The per-capita income of Nepal is greater than Rs. 115000.

Private investment dominates public investment in Nepalese economy.

Foreign employment as well as remittance sharply declined after COVID pandemic.

Clear selection

21. Consider the following statements: (1) As the economy develops, the share of the agriculture sector in the GDP falls. (2) National income represents Gross National Product at market price minus depreciation and indirect tax minus subsidies. Select the correct statement.

1 point

1 only

2 only

1 and 2

None of these

Clear selection

40. Nepal suffered a deficit in Balance of Payment in which fiscal year? *

1 point

2020/21

2021/22

2023/24

2022/23

20. Currency in circulation in an economy primary decreases if

1 point

Country faces balance of payment crisis

Money supply decreases

People hoard money in huge amount

Investment in non-productive sectors

Clear selection

54. What percentage of Nepalese populace are financially literate?

1 point

58.6

60.9

67.6

49.6

Clear selection

30. As an economist, what will be your strategy to promote the export of Nepal to India?

1 point

No change in exchange rate

Revisit exchange rate to INR 100 = NPR 180

Revisit exchange rate to INR 100 = NPR 150

Revisit exchange rate and adopt floating

Clear selection

6. A famous economist who popularized the notion of ineffectiveness of non-discretionary fiscal and monetary policy is

1 point

Robert Lucas, Jr

Milton Friedman

Robert Barro

Thomas Sargent

Clear selection

20. If the GDP of Nepal exceeds GNP, then…

1 point

Nepalese are earning less in abroad than foreigners earning in Nepal

Final production exceeds intermediate production

Foreigners are producing less in Nepal than Nepalese are producing in foreign countries.

Nominal GDP exceeds real GDP

Clear selection

23. Consider the following statements. (1) An efficient economy uses tax revenue to cover recurrent expenditure and spend public debt on capital expenditure. (2) The public debt to GDP ratio of Nepal is above 40 percent in FY2021/22. Select the correct statement.

1 point

1 only

2 only

1 and 2

None of above

Clear selection

24. Which of the following statement regarding Nepal's foreign trade is correct as of now?

1 point

China is the largest export parter of Nepal.

Nepal's balance of payment is in deficit since last three years.

Remittances flows are larger than imports

Import and export increased

Clear selection

21. Nepal owes the largest amount of debt to

1 point

IDA/World Bank

ADB

IMF

IBRD/World Bank

Clear selection

15. For a four sector or open economy the condition for equilibrium is:

1 point

Savings + taxes + Imports = Investment + govt, expenditure + exports

Total Leakages = Total Injections

Aggregate output = Aggregate Expenditure

All of these

Clear selection

47. The national account in Nepal is calculated following

2 points

System of National Account 1993

System of National Account 1984

System of National Account 1968

System of National Account 2008

Clear selection

15. The Philips curve confirms the traditional behavior in the short-run but violates the traditional behavior in the long-run is explained following

1 point

Permanent Income Hypothesis

Rational Expectation Hypothesis

Keynesian Hypothesis

Adaptive Expectation Hypothesis

Clear selection

50. The royalty earned by Wai Wai noodles is included in _________ component of national income.

1 point

Net income

Net transfers

Capital account

Current account

Clear selection

22. Which of the following country is the only country to graduate from LDC to middle income country without meeting the income criteria?

1 point

Bangladesh

Laos

Bhutan

Nepal

Clear selection

7. Which of the following is correct?

1 point

None of the options.

If national income rises, per capita income must also rise.

If population rises, per capita income must fall.

If national income rises, welfare of the people must rise.

Clear selection

55. Tragedy of common is associated to

1 point

Club good

Public good

Common good

Private good

Clear selection

18. An increase in remittance will _______ in the first round.

1 point

Increase GDP

Increase foreign reserves but does not affect GDP

Reduces GDP

Reduces GDP but increases GNP

Clear selection

10. Which of the following makes GDP an inappropriate index of welfare?

1 point

All of these

Composition and distribution of GDP

Internationalities

Non-monetary transactions

Clear selection

11. Which of the following is not included in national income?

1 point

Factor income

Rent

Transfer income

Operating surplus

Clear selection

48. The increase in aggregate demand in an economy leads to an increase in the price level in an economy. This statement defines

1 point

Cost push inflation

Suppressed inflation

Demand pull inflation

Mild inflation

Clear selection

13. Increase in Stock of Capital is known as:

1 point

Capital loss

Capital profit

Capital formation

None of these

Clear selection

27. If gross domestic saving is 18 percent of GDP, gross national saving is 46 percent of GDP, gross fixed capital formation is 28 percent of GDP, and change in the stock is 24 percent of GDP, then what will be the resource gap?

1 point

-8

-6

-10

Clear selection

53. According to NRB, what is the percent of multiple borrowing in microfinance financial institutions?

1 point

Clear selection

19. The discount rate that equals the discounted present value of future income streams to its cost of capital is called

1 point

Accounting Rate of Return

Internal rate of capital

Marginal efficiency of investment

Marginal efficiency of capital

Clear selection

14. Which one of the following is included in ‘Stock’?

1 point

Quantity of Money

Wealth

Quantity of wheat stored in warehouse

All of above

Clear selection

38. If the consumption to GDP ratio is 81.9 percent, then an increase in saving by Rs. 1 million will *

1 point

Expand economy by Rs. 5.52 million.

Contract economy by Rs. 5.52 million.

have no impact on economy.

None of above

37. Which of the following economic problem first arises as the government raises debt from the market? *

1 point

Inflation

Deflation

Crowding out

Saving

39. Which of the following statement is not true? *

1 point

Inflation in Nepal hovers around 6 percent as of FY2021/22.

COVID crisis has no impact on Nepalese price dynamics as revealed by NRB statistics.

The inflationary pressure formed in Indian market is carried to Nepalese market due to pegged exchange rate.

The inflationary pressure build up in Indian market is the major determinant of inflation in Nepal.

12. Which of the following is not an intermediate good?

1 point

Gold

Sand and Bricks

Service of doctor

Wheat

Clear selection

13. What is the population of Nepal as of Census 2078?

1 point

29192480

29192450

29195300

29192000

Clear selection

35. Which is not the factor of production?

1 point

Stock

Capital

Labour

Land

Clear selection

42. Many economists, including the World Bank and the IMF, predicted that amid the COVID crisis remittance inflow to Nepal in FY2019/20 is likely to fall by at least 15 percent, but in reality, remittance fell by less than a percent. What might be the most probable reason(s) for such peculiarity?

1 point

COVID crisis was proven very fruitful for Nepalese banking sector

The closure of international borders to prevent the spread the contamination decreased the illicit financial flows.

The cash transfers in destination countries suddenly surged the remittance inflow to Nepal.

All of above

2. Which of the following is the best example of third degree price discrimination?
*

1 point

None of the options

Chinese companies are accused of dumping their products in market of developing Asian countries.

Real company acknowleding that their products are going to expire soon announces to start a campaign of buy 3 and get 2 free.

Bus companies are fade away with low passenger and have decided to provide discount of 10 percent for a group of 10 people.

19. What is the value of the Gross investment when the net investment is Rs. 10 million and depreciation charges are Rs. 1 million?

1 point

Rs. 11 million

Rs. 9 million

Rs. 10 million

Rs. 15 million

Clear selection

3. A growing economy is one whose

1 point

GNP is rising at current price

GNP is constant at constant price

GNP is rising at constant price

None of the above

Clear selection

49. Which of the following is not true regarding public debt?

1 point

Printing money is one of the instruments of public debt.

Treasury bills is the most used instrument to raise internal debt.

Foreign debt is less than internal debt as of FY2021/22.

Japan has provided the highest amount of external debt to Nepal.

Clear selection

52. Which method is applied to calculate human development index?

1 point

Arithmetic average

Geometric average

Harmonic average

Simple average

Clear selection

44. GDP of developing countries may not reflect the true size of the economy. Why?

1 point

GDP does not account for domestic labour.

GDP only accounts formal economic activity.

GDP does not considers environmental hazards.

All of above

Clear selection

1. The garment worth Rs. 2,00,000 exported to the US will __________the GDP of Nepal by___________.

1 point

increase, Rs. 200,000

decrease, Rs. 200,000

no change

None of above

Clear selection

5. Which of the following is not true about final goods?

1 point

Final gods satisfy wants of ultimate consumers and producers.

Final goods have direct demand as they satisfy the wants directly.

Final goods are subject to further transformation in the process of production.

Final goods are neither used up as raw-material nor for resale in the same year.

Clear selection

4. Price Spec Flow Mechanism is related to

1 point

Foreign Direct Investment

Trade imbalance

Tourism flow

Consumer Price Index

Clear selection

9. Real GDP is considered as an index of:

1 point

Price level in the economy

None

Welfare of the people

Profit maximization

Clear selection

25. Which is not the component of the high-powered money?

1 point

Loan to employees

Net lending to government

Foreign assets holding

Loan to public enterprises

Clear selection

3. Which of the following statement is not true?

1 point

Marginal cost curve always represents the supply curve

Total cost is the non-decreasing function of output

Fixed cost curve is parallel to output axis

Marginal cost curve is not the mirror image of Marginal revenue cost

Clear selection

32. Consider the following: GDP = Rs. 3767 billion, Net income = Rs. 43 billion, Net transfers = Rs. 1008 billion. The difference between GNDI and GDP will be

1 point

Rs. 1052 billion

Rs. 1050 billion

Rs. 1051 billion

Rs. 1053 billion

Clear selection

29. Which of the following statement regarding the exchange rate is not false?

1 point

The sporadic rise in public debt will depreciate the domestic currency.

Exchange rate depletes with increase in exports of goods and services

Nepal adopts crawling peg with Indian currency.

The exchange rate with Nepal and the US is free floating.

Clear selection

26. If an economy grows at 8 percent per annum and the population grows at 1 percent per annum, then the per-capita income of a country triples in ____ years.

1 point

Clear selection

31. Macroeconomics defines investment as

1 point

Change in capital replacement

Change in rate of capital growth

Change in capital stock

Change in capital depreciation

Clear selection

6. Which out of the following is not included in the estimation of National Income?

1 point

Subsidized Lunch

Free Medical facilities

Old-age Pension

Construction of a house

Clear selection

9. Which of the following curve is also popularly known as envelope curve?

1 point

Long run average cost curve

Short run average cost curve

Average Fixed cost curve

Long run total cost curve

Clear selection

43. Which is not part of the Human Development Index?

1 point

Education Index

Income Index

Gross Happiness Index

Life Expectancy Index

Clear selection

60. Gravity model is associated with

1 point

Institutional economics

International economics

Labour economics

Historical economics

Clear selection

56. Laffer curve is related to

1 point

Taxation

Pollution

Economic growth

Consumption

Clear selection

4. If the factor cost is greater than the market price, it means that

1 point

Indirect taxes < subsidies

Indirect taxes > subsidies

Indirect taxes = subsidies

Direct tax > subsidies

Clear selection

34. Which of the following statement is not false?

1 point

The GNDI of China is less than its GDP.

The US economy is primarily driven by the manufacturing sector.

India is the second largest recipent of remittance in the world.

Japan's debt to GDP ratio is more than 200 percent.

Clear selection

28. The real GDP of a country is affected by

1 point

Change in price of base year's preceeding year

Change in general price level of goods

Change in real interest rate

Change in government spending

Clear selection

41. Government collects Rs. 10 billion from taxes in 2022/23 and spends equal amount in the form of government expenditure in the same year. By how much national income rise keeping other things remaining constant?

1 point

More than 10 billion

Less than 10 billion

Equals to 10 billion

Near to 10 billion

Clear selection

59. Ricardian Equivalence is associated to

1 point

Fiscal policy

Monetary policy

Industrial policy

Tourism policy

Clear selection

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