Last Assignment

1. Which of the following best defines the natural rate of unemployment?

a. It is the unemployment rate that would prevail with zero inflation.
b. It is the rate associated with the highest possible level of GDP.
c. It is the difference between the long-run and short-run unemployment rates.
d. It is the amount of unemployment that the economy normally experiences.

2. Which of the following people would NOT be included in the labour force?
a. Amir, who is on temporary layoff
b. Amin, who has retired and is not looking for work
c. Jamil, who does not have a job, but has applied for several in the last week
d. Jani, who has a job but is looking for a new one

3. Which of the following best defines the labour force?

a. the number of employed
b. the population minus the number of unemployed
c. the population aged 15or over
d. the number of unemployed plus the number of employed

4. In 2000 in country A, the unemployment rate was about 4.8 percent, the labour force participation rate
was about 62 percent, and the adult population was about 108 million. How many people were
employed?
a. about 52 million
b. about 64 million
c. about 67 million
d. about 103 million

5. Prime Minister B is running for re-election against Finance Minister P. Mr. B proclaims that more people
are working now than when he took office. Mr. P says that the unemployment rate is higher now than
when B took office. Which of the following can you conclude?
a. One of them must be lying.
b. Both of them could be telling the truth if the labour force participation rate and the labour force both
fell.
c. Both of them could be telling the truth if the labour force grew slower than employment.
d. Both of them could be telling the truth if the labour force grew faster than employment.

6. Which of the following best defines barter?

a. It is an exchange of goods for money.
b. It is an exchange of money for foreign currency.
c. It is a generally accepted legal tender.
d. It is a transaction that requires a double coincidence of wants.

7. Which of the following characterizes fiat money?

a. It has no intrinsic value.
b. It is backed by gold.
c. It has intrinsic value equal to its value in exchange.
d. It is an illiquid asset.

8. Which of the following characterizes commodity money?

a. It is money that is backed by gold.
b. It is the principal type of money in use today.

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

c. It is money with intrinsic value.

d. It is comprised of receipts created in international trade that are used as a medium of exchange.
9. How are credit card balances treated in M1 as compared to M2?
a. They are included in M1 but not M2.
b. They are included in M2 but not M1.
c. They are included in M1 and M2.
d. They are included in neither M1 nor M2.

10. Suppose a bank has a 20 percent reserve ratio, $2500 in deposits, and it loans out all it can,
given the reserve ratio. Which of the following describes the bank’s assets?
a. It has $50 in reserves and $$2500 in loans.
b. It has $50 in reserves and $2450 in loans.
c. It has $500 in reserves and $2000 in loans.
d. It has $500 in reserves and $2500 in loans.

11. When a bank loans out $1000, what happens to the money supply?
a. It does not change.
b. It decreases.
c. It increases.
d. It has an indeterminate effect on the money supply.

12. If a central bank wanted to increase the money supply, which of the following would it most likely do?
a. It would make open market purchases and lower the bank rate.
b. It would make open market sales and lower the bank rate.
c. It would make open market purchases and raise the bank rate.
d. It would make open market sales and raise the bank rate.

13. Which of the following is not a tool of monetary policy?

a. open market operations
b. reserve requirements
c. changing the bank rate
d. increasing the deficit

14. When prices are falling, which of the following terms do economists use?
a. disinflation
b. deflation
c. a contraction
d. an inverted inflation

15. What does liquidity refer to?

a. the relation between the price and interest rate of an asset
b. the risk of an asset relative to its selling price
c. the ease with which an asset is converted into a medium of exchange
d. the sensitivity of investment spending to changes in the interest rate

16. Which of the following is the most liquid asset?

a. capital goods
b. stocks and bonds with a low risk

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

c. stocks and bonds with a high risk

d. funds in a checking account

17. Why do people primarily own or hold money?

a. because it has a guaranteed nominal return
b. because it has a guaranteed real return
c. because it can directly be used to buy goods and services
d. because it functions as a unit of account

18. In which of the following situations do people want to hold more money?
a. when the price level or the interest rate increases
b. when the price level or the interest rate decreases
c. when the price level increases or the interest rate decreases
d. when the price level decreases or the interest rate increases

19. Which of the following shifts money demand to the right?

a. an increase in the price level
b. a decrease in the price level
c. an increase in the interest rate
d. a decrease in the interest rate

20. Which of the following shifts aggregate demand to the left?

a. an increase in the price level
b. an increase in the money supply
c. a decrease in the price level
d. a decrease in the money supply

21. Fiscal policy refers to the idea that aggregate demand is changed by changes in what?
a. the money supply
b. government spending and taxes
c. trade policy
d. exchange rates

22. Which of the following is an effect of an increase in government purchases?

a. It decreases interest rates.
b. It results in a net decrease in aggregate demand.
c. It crowds out investment spending by business.
d. It decreases money demand.

23. How do tax cuts and government expenditure affect aggregate demand?
a. Both shift aggregate demand right.
b. Both shift aggregate demand left.
c. Tax cuts shift aggregate demand right; government expenditure shifts aggregate demand left.
d. Tax cuts shift aggregate demand left; government expenditure shifts aggregate demand right.

24. What are the effects of a change in taxes on consumption and aggregate demand?
a. If taxes increase, consumption increases and aggregate demand shifts right.
b. If taxes increase, consumption decreases and aggregate demand shifts left.

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

c. If taxes decrease, consumption increases and aggregate demand shifts left.

d. If taxes decrease, consumption decreases and aggregate demand shifts right.

25. A decrease in expected inflation shifts which of the following curves, and in what direction?
a. It shifts the short-run Phillips curve right.
b. It shifts the short-run Phillips curve left.
c. It shifts the long-run Phillips curve right.
d. It shifts the long-run Phillips curve left.

26. In the long run, what effect does an increase in the money supply have on prices and unemployment?
a. It leaves prices and unemployment unchanged.
b. It raises prices and unemployment.
c. It raises prices and leaves unemployment unchanged.
d. It leaves prices unchanged and reduces unemployment.

27. Which of the following is included in raw materials

a. Land b. Capital
c. Labor d. Entrepreneur

28. The demand of -------- goods increase with decrease in income.

a. Superior b. Inferior
c. Normal d. Luxury

29. If curve of PPE moves outward, it means

a. Current output has declined than previous output
b. Current output is more than previous output
c. Inefficient use of resource

30. Difference of average revenue and average cost is

a. Average profit b. Normal profit
c. Net profit d. Profit

31. Monopolist continue to increase output as long as:

a. MR is greater than MC
b. MR is equal to MC
c. MC is greater than MR

32. If The sector of the economy which consists of manufacturing industries is the :
A Primary sector
B Secondary sector
C Tertiary sector
D Quaternary sector

33. Which is not involved in GDP

a. Prices of imported goods b. Capital goods

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

c. Nominal GDP d. Real GDP

34. Government will counter (select two)

a. Demand pull inflation by decreasing b. Demand pull inflation by increasing
interest rate interest rate
c. Cost push inflation by contractionary d. Cost push inflation by increasing
fiscal policy income tax

35. The concept is---------

36. Which is likely to occur if current account of Pakistan is deficit and floating exchange system
a. External value of currency will fall
b. External value of currency will rise

37. Consider following diagram

Point b represents---------
38. Which is accounted for improvement in balance of payment deficit
a. Restriction in imports b. Appreciation of currency
c. Decrease in aggregate demand d. Increase in imports

39. Money supply curve is

a. Horizontal b. Vertical
c. Parallel to money demand d. Downward sloping

40. Normal profit occurs in perfect competition

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a. When AR=AC b. When AR>AC

c. When AR<AC d. When MR>AC

41. If demand curve is perfectly elastic then it’s elasticity

a. Infinite b. Equal to 1
c. Equal to 0 d. Greater than 1

42. Supply curve of perfect competition is

a. Elastic b. Inelastic
c. Perfectly inelastic d. Perfectly elastic

43. Price mechanism in free market economy majorly accounts for

a. Allocation of resources b. To satisfy the wants of government
c. To fulfill the social needs d. For the government control

44. Government increases the aggregate demand by increasing money supply

a. Contractionary monetary policy b. Expansionary monetary policy
c. Contractionary fiscal policy d. Expansionary fiscal policy

45. Which are the functions of central bank (two options)

a. As a clearing agent b. To supply credits
c. To control money supply d. To control taxes

46. Indirect tax is more regressive than direct tax.

a. True
b. False

47. According to multiplier principle increase in income is due to increase in

a. Investment b. Expenditure
c. Taxes d. Savings

48. According to accelerator principle, which of the following are not determinants of investment?
a. Business expectations b. Rate of interest
c. Level of income d. Demand of goods and services

49. Which of the following, leads to inflation----------

a. Boom b. Recession
c. Downturn d. Trough

50. Following characteristics relate to:

➢ Downward sloping demand curve.
➢ Lower the price to increase the sales.
➢ Economic profits in both long and short run.
Choose appropriate answer.
a. Monopoly b. Monopolistic competition

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

c. Oligopoly d. Perfect competition

51. Which of the following is/are true

➢ It is better to consider net investment instead of gross investment in calculation of GDP.
➢ Personal income always exceeds disposable income.
a. Only statement 1 b. Only statement 2
c. Both statements are correct d. Both are incorrect

52. Which of the following statements is/are true

➢ Firm will continue to produce till AR=AVC.
➢ Removal of an existing firm from perfect competition will decrease the profit per unit of the
firms.
a. Both are correct b. Both are incorrect
c. Only 1 is correct d. Only 2 is correct

53. Retiree is an example of

a. Unemployed b. Employed
c. Not in labor force d. Structurally employed

54. Fiscal policy enacts by using;

a. Inflation and unemployment
b. Inflation and balance of payments
c. Taxation and government spending
d. Interest rate and money supply

55. Philips curve depicts

a. Long run curve is vertical and short run is down sloping
b. Long run curve is vertical and short run is upward sloping
c. Both are downward sloping
d. Long run is horizontal while short run is downward sloping

56. Different states set different types of money. Which of the following is not included in M1.
a. Time deposits b. Demand deposits
c. Checking accounts d. Coins and notes

57. Which of the following is correct about exchange rate

a. it is not related to a person which b. it is the rate at which one currency
does not travel around the world. is exchanged with other
c. It is always variable. d. It is always constant.

58. Which of the following is not a function of commercial bank

a. Locker facility b. Credit controlling
c. Discounting of receivables d. Education loan

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

59. Which of the following statement is true about credit

a. Minimizes inflation b. Inclines people to spend less
c. Firm expand revenue for future d. Decrease spending of government
instead of using retained earnings

60. Which of the following shifts consumption curve to lower

a. Decrease in net wealth b. Increase in consumer confidence
c. Decrease in interest rates d. Change in disposable income

The correct answer is (a) Decrease in net wealth.

A decrease in net wealth would cause a shift in the consumption curve to lower. This is because when
individuals experience a decrease in their net wealth, they may reduce their consumption expenditures
in order to save money and rebuild their savings.

61. Which two allowed in Islam.

a. Redistribution of wealth b. Hoarding
c. Riba d. zakat

62. Not factors of production?

a. Oil b. Money
c. Capital d. Labour

63. Which of the following would not cause cost curves to shift?
a. Technological advancement
b. Changes in labour efficiency
c. Changes in demand
d. Increased cost of factors of production

64. Elasticity’s of demand definition:

a. Responsiveness of change in Quantity demanded due to change in price
b. Responsiveness of change in price due to quantity demanded
c. Change in price due to demanded quantity

65. Supply is less responsive to change in price, curve is

a. Shallow b. Steeper
c. Horizontal d. Vertical

66. Pakistani resident invest in foreign country:

a. Debit in current account
b. Credit in current account
c. Credit in capital account

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

d. Debit in capital account

67. GDP at market price to factor price:

a. Less tax add subsidies
b. Add tax less subsidy
c. Add net income

68. General acceptability is characteristics of:

a. Money
b. Credit money
c. Bank account

69. State Bank is custodian of foreign currency and gold:

a. True
b. False

70. Canon in which higher income paid higher tax and lower income paid low tax :
a. Certainty
b. Equality
c. Flexibility

71. Not related to command economy:

a. Free price mechanism
b. Control over key resources
c. Full employment of workforce is possible
d. Resources are state owned

72. Not in short run J curve, select two

a. Inelastic import
b. Inelastic export
c. Elastic import
d. Elastic export

73. In short run Philips curve, upward shift due to (two options)
a. Expectation of inflation
b. Increase in interest rate
c. Increase in indirect tax

74. Not in law of variable proportion, select two

a. Change in capital
b. Dynamic change in variables
c. Apply in Short run
d. Change in labor only

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

The two options that are not part of the law of variable proportion are:
b. Dynamic change in variables: The law of variable proportion is concerned with the relationship
between two specific inputs, typically capital and labor, and the resulting output. It does not consider
dynamic changes in other variables that may affect production, such as changes in technology,
government policies, or consumer preferences.

d. Change in labor only: The law of variable proportion examines the relationship between the input of
labor and the resulting output, assuming that all other inputs remain constant. Therefore, a change in
labor only would not be relevant for this law, as it assumes that other inputs, such as capital, remain
constant.

75. Which of the following unambiguously occur when there is a simultaneous decrease in demand and
supply
a. An Increase in equilibrium quantity
b. Increase in price
c. Decrease in equilibrium price
d. A decrease in equilibrium quantity

76. Financial innovation means related to money (two options)

a. A credit card as money
b. Current account in bank
c. New financial services

Both options (a) and (c) can be considered as examples of financial innovation. A credit card represents
a financial innovation because it offers a new way to make payments and access credit. It allows
consumers to make purchases without having to carry cash and provides a convenient way to access
credit for large purchases.
New financial services (c) can also be considered a financial innovation. This could include, for example,
the introduction of peer-to-peer lending platforms, robo-advisors, or mobile banking apps. These new
services offer consumers and businesses access to new financial products and services, often at lower
costs and with greater convenience than traditional financial institutions.

77. Two characteristics of public goods,

a. Rivalry
b. Excludability
c. Non rivalry
d. Non excludability

78. Prices in market economy are set by

a. Free market forces
b. Government
c. Demand
d. Supply

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

79. If reserve ratio is 20% and central bank sell securities of 60 million, what will be the effect on money
supply in economy?
a. Decrease by 75 million
b. Increase by 75 million
c. Increase by 300 million
d. Decrease by 300 million

80. Factors causing decrease in price elasticity of demand

a. High prices
b. Luxury goods
c. No close substitutes
d. None of above

81. Decreasing returns to scale only apply:

a. In the short run
b. In the long run
c. If there is one fixed factor of production
d. If companies have monopoly power

82. P In the short run, firms will continue to supply provided that they cover
a. Fixed costs
b. Marginal costs
c. Variable costs
d. Interest costs

83. Chamakdar Paints Co and Rangdar Co are leading manufacturers of industrial paints, and their
products compete with each other in the market. Which of the following statements would you
expect to be correct?
a. The products of Chamakdar Paints and Rangdar have a low positive cross elasticity of demand.
b. The products of Chamakdar Paints and Rangdar have a low negative cross elasticity of demand.
c. The products of Chamakdar Paints and Rangdar have high positive cross elasticity of demand.
d. The products of Chamakdar Paints and Rangdar have a high negative cross elasticity of demand.

84. Constant factors in quantity theory of money

a. velocity of money
b. total output
c. Money Supply
d. Price
85. Fisherman sold his Good to others. His reward Is
a. Wages
b. Profit
c. Rent

86. If price of a good increase its supply

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a. Increase
b. Decrease
c. Same

87. Which one is not a precondition of law of supply?

a. Oil prices
b. Income of the consumer
c. Wages
d. None of the above

88. Which of the following always rise when a manufacturing business increase its output
a. fixed cost
b. marginal cost
c. average variable cost
d. total cost

89. Aggregate supply is the special case of

a. microeconomics
b. macroeconomics

90. In graph price decrease, demand increase

a. Movement
b. Shift in rightward
c. Shift in leftward
d. None of above

91. A continue or persistent rise in general price level is called:

a. Disinflation
b. inflation
c. deflation
d. stagflation

92. If output is 48000 and investment is 12000 then multiplier value is

a. 2
b. 4
c. 1.66
d. 5

93. W A burger outlet can sell 20,000 burgers per month at Rs.3 each or 25,000 burgers at Rs. 2.60 each.
The arc price elasticity of demand is closest to:
a. 1.9
b. 1.6
c. –1.6
d. –1.9

94. Which is not in Keynesian liquidity preferences model

a. Transactional motives

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

b. Precautionary motives
c. Profit motives
d. None of these

95. In Phillips curve inflation increase then unemployment

a. Increase
b. Decrease
c. Same
d. all of above

96. Which of the following are merit goods?

I National defence
II Health services
III Education
IV Street lighting
a. II and III
b. I, II, and III,
c. II, III and IV
d. All of them

97. Monetary measures does not include

a. Deflation
b. Exchange control
c. Import substitution
d. Exchange rate of depreciation

98. Which one is not included in FOP's

a. Tools
b. Money
c. Employee
d. Land

99. Which of the following is not canon of taxation?

a. Canon of convenience
b. Canon of certainty
c. Canon of equity
d. Canon of economy
e. None of above

100.
Central bank advances the loan to banks, government and general public?
a) true b) false

101. Which TWO of the following are in the non-monetary measures?

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Tariff b) Deflation
c) Export subsidiary d) Exchange rate
102. Select any TWO non-monetary measures?
a) Control on foreign reserve b) Quota
c) Export promotion d) Depreciation in Exchange rate

103. The reserve ratio is 20%, the bank has no excess reserve, and the bank sells the government securities of
60 million. The Central bank would be?
a) Increase money supply Rs.75 b) decrease money supply Rs.75
c) Increase money supply Rs.300 d) decrease money supply Rs.300

104. A rise in currency relative to other currency is called?

a) Exchange rate b) Currency depreciates
c) Currency appreciates d) Current account deficit

105. Which of the following is NOT the income of factors of production?

a) Rent b) Taxes
c) Interest d) Wages

106. Which one is the best definition of opportunity cost?

a) All sacrificing cost b) To obtain one more unit
c) Next best alternative forgone d) none

107. Following concept is not associated with PPC

a) Efficiency b) Equity
c) Opportunity cost d) Trade off

108. Which of the following are TWO advantages of mixed economic system?
a) Weak agent care b) Fair distribution
c) Bureaucratic controls d) Auto adjusted price mechanism

109. Under Islamic economic system

(a) Based on only Qur’an
(b) Man is owner of resources

a) Both are correct b) Both are incorrect

c) A is correct d) B is correct

110. Key economic questions arise due to:

a) Scarcity b) Efficiency
c) Abundant d) Basic need

111. If price of commodity increase

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Demand will expand b) Demand will contract

c) Demand will negative d) Demand remains constant
112. X and Y both are substitute. Select any TWO correct statements
a) Increase in price of X, decrease in demand of Y
b) Increase in price of X, increase in demand of Y
c) Decrease in price of X, decrease in demand of Y
d) Decrease in price of X increase in demand of Y

113. Increase in price of substitute in production causes in supply of other good.

a) Increase b) Decrease
c) Same d) None

114. If supply of X decreases and supply of Y increase, then both are

a) Substitute in production b) Complement in production
c) Inferior goad d) Giffen good

115. If the demand is perfectly inelastic, then curve is (Select any TWO)
a) Horizontal b) Parallel to x-axis
c) Vertical d) Parallel to y-axis

116. Increase in price, increase Total revenue, the demand is? (Select any TWO)
a) Elastic b) Perfectly elastic
c) Inelastic d) perfectly inelastic

117. Average cost curve is U-shaped, because of: (Select TWO)

a) Average fixed cost is decreasing b) Marginal cost is increasing
c) Law of return d) fixed cost is decreasing

118. Under perfect competition:

(I) when the firm exit the industry then per unit profit of firm decrease.
(II) Super normal profit is abnormal or excess profit
a) Both are correct b) Both are incorrect
c) I is correct d) II is correct

119. Under monopoly there is excess production in long run if:

a) Increase in price, increase output b) Firm behave as monopoly
c) Make entry of difficult in order to d) Firm are competing an produce no
Decrease price identical product

120. A firm continue production when Total revenue covers Total cost
a) True
b) False

121. When the average cost curve shift upward. (Select any TWO)

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Increase in labour productivity b) decrease in labour productivity

c) Increase in marginal cost d) decrease in marginal cost

122. National income calculated under output method is the national income calculated under
income method
a) Greater b) Smaller
c) Same d) Difficult to tell

123. Transfer payments include: (Select TWO)

a) Bank loan b) Payment without work
c) Tax payment d) Government subsidies and pension fund

124. Per capita income calculation show:

National Income (Billion) Total Population (Million)
Year 1 180,000 225
Year2 192,100 226
a) Improved
b) Not Improved

125. Long run Philip’s curve is vertical called Natural rate of unemployment, If
a) Aggregate supply curve is horizontal at potential output
b) Aggregate supply curve is vertical at potential output
c) Aggregate demand curve is horizontal at potential output
d) Aggregate demand curve is vertical at potential output

126. Injection less than withdrawals cause

a) National income to rise b) Unemployment to rise
c) Inflation to rise d) Balance of payment to improve

127. X and Y are substitute in consumption. If price of X increase

a) Demand for X decrease b) Demand for Y decrease
c) Demand for X increase d) Demand for Y increase

128. Postponed consumption is called:

a) Saving b) Income
c) Investment d) Autonomous consumption

129. Which of the following does not cause rightward shift in MEC?
a) Population growth b) Change in income
c) Surplus productive capacity d) Excess demand
130. If MPC = 80%, MPM = 30% and investment is made 50 billion. Find the increase in National income by?
a) 50 billion c) 166.67 billion
b) 100 billion d) No

131. According to accelerator principle. If there is a need of good, then the demand of

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

Good increase.
a) Capital good
b) Consumer good

132. Sequence of Four phases of business cycle are”

a) Boom, Trough, recession, Depression
b) Boom, recession, recovery, Depression
c) Boom, Trough, recovery, recession
d) Boom, recession, Depression, recovery

133. The value of Multiplier falls when (Select TWO)

a) MPC rise b) MPS rise
c) MPS fall d) MPC fall

134. The stage of business cycle which take the cycle at the stage if inflation
a) Boom b) Recession
c) Trough d) Recovery

135. Which of the following are limitation of Fiscal policy? (Select TWO)
a) Time lag b) Low inflation
c) Crowding out effect d) Run a balanced budget

136. Which of the following is best define Progressive tax?

a) Tax increase, when income increase
b) Tax increase, when income decrease
c) Tax decrease, when income increase
d) Tax same, when income increase

137. According to Monetarist Economist, aggregate demand is influenced by

a) Income b) Government expenditure
c) Rate of interest d) Investment

138. When there is an excess of Money supply, the interest rate will be?
a) Held above the equilibrium interest rate b) Held below the equilibrium interest rate
c) No change d) At equilibrium

139. According to Quantity theory of Money, money supply is directly proportional to

a) Value of money b) Price level
c) Demand for money d) Income of consumer

140. According to Quantity theory of Money, money supply is to Price level

a) Inversely proportional b) directly proportional
c) Equal d) same

141. In order to decrease AD, Central bank in open market and in

Reserve ratio
a) sell securities, decrease b) buy securities, increase
c) sell securities, increase d) buy securities, decrease

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

142. In order to increase money supply, Central bank in open market and the Discount rate
a) sell securities, Lower b) buy securities, lower
c) sell securities, increase d) buy securities, increase

143. If price of products in 2021 is Rs.205 and Rs.215 in 2022. Calculate CPI.
a) 7.32% b) 4.88%
c) 2.88% d) 5%

144. Indirect Tax cause: (Select TWO)

a) Demand pull inflation b) Cost Push inflation
c) Disequilibrium in market d) No inflation

145. Current account/balance of payment account deficit can be balanced by: (Select TWO)
a) Selling gold and other reserves b) Borrowing from central bank
c) Buying gold and other reserves d) paying off debt

146. Current account deficit means export is less than import

a) True
b) False

147. Who believe that aggregate expenditures in the economy are influenced by the market rate of interest?'
a) Classical economists b) Keynesian economists
c) Monetarists economist d) All of these

148. According to economist. Money can be used to facilitate transactions; money can be used to
purchase goods and services in the future
a) Classical b) Keynesian
c) Monetarists d) None of these

149. Slow economic growth combined with high unemployment is called

a) Deflation b) Inflation
c) Stagflation d) Moderate inflation

150. Which of the following is NOT the functions of commercial banks?

a) Credit creation b) Advancing loan
c) Lender of last resort d) Discounting of Bill of exchange

151. Which of the following is NOT the functions of Central bank?

a) Exchange rate controls b) Clearing agent
c) Custodian of Monetary Reserves d) Credit creation

152. The aggregate demand is 120 billion, government spending is 30 billion, investment is 30 billion, and
Import is 25 billion. Find export
a) 55 b) 65
c) 75 d) 85

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

153. GDP is 120, Consumer expenditure is 30, Investment is 30, Import is 35, and Government expenditure is
70. Export will be:

154. The demand for a Factor of Production is called:

a) Quantity demand b) Derived demand
c) Individual demand d) market demand

155. Which one of the following assumptions is related to the law of variable proportion?
a) Continuous improvement in techniques of production
b) All factors of production are proportionately varied
c) There is no scarcity of the factors of production
d) The factors are able to be combined to make a product

156. When diminishing returns begin to operate, the total variable cost curve will start to:
a) Fall at an increasing rate b) rise at a decreasing rate
c) Fall at a decreasing rate d) rise at an increasing rate

157. The given diagram depicts the concepts of

a) Inverse of J-curve b) J—curve

c) Marginal cast d) Average cost

158. Normative science deals with the factual questions.

a) True
b) False

159. PPC curve does not shows the concept of:

a) Trade off b) Efficiency
c) Equity d) Growth

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

160. The disadvantage of planned economy is: (Select TWO)

a) Encourage monopoly
b) No enhancement of achievement of technology
c) Eco no mic freedom keeps out of economic model
d) Ignore of social security

161. In a mixed economy, the decisions and choices about allocation of resources are partly taken by
Government and partly by market-forces of demand and supply
a) True
b) False

162. A kind of partnership where a financial expert offers a specialist investment in which the customer and
bank share profit is called
a) Mudaraba b) Musharaka
c) Murabaha d) Ijara

163. Contraction of supply curve from the given graph is

a) S to S1 b) S1 to S
c) A to B d) B to A

164. An increase in demand of product X cause by increase in price of product Y.

a) Substitute good b) Complementary good
c) Giffen good d) Inferior good

165. Movement in demand curve caused by:

a) Increase in price of own product b) Increase in future expectation
c) Increase in population d) None

166. Minimum of AC keep higher output then minimum of AVC because of:
a) AC is u-shaped b) AVC spread VC on all output
c) AC keeps FC in it, which is decreasing d) none

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

167. In perfect competition, if Marginal revenue is greater than marginal cost?

a) Increase in price will increase profit b) decrease in price will increase profit
c) Increase in Output will increase profit d) decrease in Output will increase profit

168. If price increase from 2 to 4. Use percentage method to solve. (Calculate PED)

a) 3/5 b) 1/5
c) 2/5 d) None

169. measures of responsiveness of supply to a change in its supply

170. “A” represents

a) TFC b) TVC
c) TC d) None
(1) “C” represents

171. In market competition firm earns normal profit due to:

a) There are few sellers c) Single sellers
b) Large number of sellers d) High barrier

172. In kink demand curve, if firm an increase it price, then what will be the behavior of firm B? Firm B will
a) Decrease it price b) not change it price
c) Increase it price d) none

173. At price ceiling: (select 2)

a) Increase in consumer surplus b) decrease in producer surplus

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

c) Increase in producer surplus d) decrease in consumer surplus

174. National income is: (select 2)

a) Measure for only one year b) Only Intermediate goods will be considered
c) Only final goods will be considered d) Calculate on physical goods and services

175. Sum of all factor payment is:

a) Factors of production b) Market expenditure
c) National income d) None

176. In business cycle stage leads to inflation

a) Peak b) Downturn
c) Recession d) Depression

177. In the consumption function “ab” refers to

a) MPC b) Induced consumption

c) Autonomous consumption d) None

178. Multiplier will always 1.

a) Less than b) Greater than
c) Equal to d) None

179. Progressive taxation is?

a) Tax increase with increase in income b) Tax decrease with increase in income
c) Tax same with increase in income d) Tax increase with same income

180. Expansionary fiscal policy seeks to increase economic growth, employment and export by: (Select
TWO)
a) Increase government spending b) decrease government spending
c) Decrease in taxes d) increase in taxes

181. Function of money best described as: (Select TWO)

a) Medium of exchange b) Barter system
c) Unit of account d) Not a Standard of deferred payment

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

182. Rise in value of currency of one country relative to another country is called:
a) Depreciation of currency b) Appreciation of currency
c) Balance of payment d) Exchange rate

183. In Philip’s curve, higher inflation refers to unemployment

a) Lower b) Higher
c) No change d) Same

184. Central Bank serves as custodian of Monetary Reserves such as Gold and Foreign currencies.
a) True
b) False

185. Role of Investment Bank is: (Select TWO)

a) Does not accept deposits b) Receive deposit and give loan
c) Provides Under writing services d) d) Provide Checking accounts

186. Which of the following is NOT considered as Credit instruments?

a) IOU b) Draft
c) Bond d) Stock

187. If Central Bank wish to reduce the Aggregate demand. Which of the following policy would be
applicable? (Select TWO)
a) A rise in bank rate b) A rise in reserve ratio
c) Restriction in level of imports d) Promotions of export

188. Non-monetary measures to correct current account deficit. (Select TWO)

a) Tariff b) Promotion of export
c) Depreciation d) Deflation

189. Which of the following is NOT the assumptions of Law of Variable proportion?
a) Law operates only in short run b) Labour is the only variable input factor
c) All the input factors are heterogeneous d) Possibility to combine the input factors

190. Running a Current account deficit means that there is a net outflow of demand versus the income that
comes into a country. This can be thought of as a country “not paying their way”.
a) True
b) False

191. The following diagram depicts the concept of?

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Sub-normal profit b) Normal profit

c) Super-normal profit c) Breakeven point

192. The following diagram depicts the concept of?

a) Sub-normal profit c) Normal profit

c) Super-normal profit d) Loss

193. The following diagram depicts the concept of? (Select TWO)

a) Collusive oligopoly b) Non-collusive oligopoly

c) Normal profit d) Kinked demand curve

194. Normal profit means where economic profit

a) Less than 1 b) Greater than 1
c) Equal to 1 d) Equal to 0

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

195. Which is best definition of marginal cost (MC] or incremental cost. (Select TWO)
a) Additional price of selling an extra unit of given product
b) Average cost of producing an extra unit of given product
c) Additional cost of producing an extra unit of give n product
d) Represents the slope of total cost function

196. Production and employment in which of the following industries would be least affected by recession?
a) Sugar b) Steel
c) Garments d) Vehicles

197. If market rate of interest decrease, then value of bond will

a) Increase b) Decrease

198. The state of technology when illustrating a production possibility curve is assumed to be constant.
a) True
b) False

199. Government regulation in a mixed economic system may the cost of doing business for
firms.
a) Increase b) Decrease
c) Not change d) None

200. The most important features of Capitalism are the

a) Central planning
b) Price mechanism

201. The features of Islamic economic system are similar to those of the system:
a) Mixed b) Socialistic
c) Capitalistic d) None

202. The measures of responsiveness of quantity supplied to a change

in price.
a) Price elasticity of supply b) Income elasticity of supply
c) Cross elasticity of supply d) All of these

203. According to Philip’s curve, the lower rate of inflation would result in
a) Unfavorable balance of payment b) Lower level of investment
c) Higher unemployment rate d) More unequal distribution of wealth

204. A downward sloping demand curve represents relation with the rate of interest.
a) Direct
b) Inverse

205. Select most appropriate answer. Demand contract, if,

a) Price of commodity increase b) Price of substitute decrease
c) Price of complementary increase d) Income of consumer decrease

206. Average Variable Cost (AVC) is U-Shaped because of: {Select TWO)

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Law of diminishing return b) Law of increasing marginal return

c) Marginal product is continuously increasing d) Average fixed cost is continuously decreasing

207. Which TWO of the following is NOT the function of state Bank of Pakistan?
a) Credit creation b) Fiscal policy
c) Monetary policy d) Lender of last resort

208. When aggregate demand increases unemployment usually and inflation will
a) Fall (1)
b) Rise (2)
c) Remain unchanged

209. When aggregate demand increase, inflation and unemployment

a) Increase (1)
b) Decrease (2)
c) Remain unchanged

210. Transfer payments include: (Select TWO)

a) Charity b} Income earned
c) Wages d) Donations

211. Autonomous investment is not influenced by the change in level of

a) Income b) Output
c) Profits d) Sales

212. Postponed consumption of household and individual is called

a) Investment b) Saving
c) Income d) Expenditure

213. Suppose money demand has negative slope while money supply is vertical lower initial equilibrium
occur at point E1 if money supply curve shift rightward it will lead to (Rise/Fall) in interest rate
and temporary (Surplus/shortage) of money.

214. Which one is NOT Factors of production?

a) Land b) Labour
c) Money d) Entrepreneur

215. Calculation n of GDP at market rate.

a) True
b) False

216. Nominal GDP is calculated at

a) Base year b) Constant market price
c) Current market price d) GDP deflator

217. Increase in National income is 3600 billion, by increase in Investment by 1200 billion then multiplier is:
a) 3 b) 4
c) 5 d) 1.3333

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

218. Autonomous investment means:

a) Which remains unaffected with an increase in national income
b) Investment is initiated by government for welfare maximization
c) is independent of income
d) All of these

219. Household saving is equal to: (select TWO)

a) Income — Taxes b) Income — Taxes — Consumption
b) Income only d) Income — Consumption

220. In perfect competition, market is: (Select TWO)

a) Price maker b) No legal barrier to entry
c) Selling homogeneous products d) Selling non-homogeneous products

221. In business cycle, following point shows:

At point E (recession, trough, downturn) and at point F (trough, downturn, recovery)

222. Nominal GDP is always than Real GDP.

a) Less b) Equal
c) Greater d) none

223. Select any TWO merits of capitalism/free market.

a) Unhindered price mechanism b) Social security
c) Economic stability d) An incentive to innovates

224. If reserve ratio is 20% and initial deposit is 100 million. It means credit creation will be 80 million.
a) True
b) False

225. Reserve rate is proportional to money multiplier.

a) Inversely
b) Directly

226. Select any TWO functions of Central bank.

a) Control Exchange rate b) Clear agent
c) Advancing loan d) Discounting Bill of exchange

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

227. Select any TWO limitations of Fiscal policy.

a) Keep inflation low b) Negative impact of Tax
c) Crowding out d) Keep employment high

228. Increase in Tax will Multiplier effect.

a) Increase
b) Decrease

229. Select any TWO benefits of Monopoly:

a) No significant barriers to entry b) Investment in long term projects,
c) Prices are relative stable d) Differentiation increases consumer
choice
230. Demand for factors of production is called
a) Direct demand
b) Derived demand

231. Which of the following is NOT the Advantages of Mixed Economic System? (Select TWO)
a) Fair distribution of goods and services especially of public interest
b) Inefficiencies due to bureaucratic controls
c) Government also makes sure the care of weak agent of the economy
d) Government regulations increasing the cost of doing business for firms

232. The gap between Ye to Yf shows

a) Inflationary gap b) deflationary gap

c) positive output gap d) No gap

233. Long run average cost decrease / (cost reduced in long run) in
a) Economy of scale b) Diseconomy of scale
c) Constant return to scale d) All of these

234. is where a financial expert offers specialist investment in which the customer and bank
share profits
a) Mudaraba b) Musharaka
c) Murabaha d) Ijara

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

235. Select any TWO limitations of multiplier:

a) If sufficient amount of consumer goods is not available,
b) No change in tax rate
c) Continuous spending
d) If full employment is achieved.

236. Which of the following is NOT the Limitations of Accelerator Principle?

a) Availability of spare capacity b) Change in Capital-Output ratio
c) Existing plants are operating at full d) rise in demand for consumer durables
capacity is temporary

237. Calculate GDP per capita, if National income is 180,000 billion and population is 225 million
a) 600,000 b) 700,000
c) 800,000 d) 900,000

238. GDP deflator is equal to

a) Real GDP b) Nominal GDP
x 100 x 100
Nominal GDP Real GDP

c) National income d) Real GDP

x 100 x 100
Nominal GDP log x

239. GDP deflator is a price index that measure in a country.

a) rate of inflation b) rate of interest
c) rate of GDP d) none

240. Select any TWO Advantages of floating exchange rates

a) Avoids the need for government intervention in the foreign exchange markets
b) Avoids damaging speculation against the currency.
c) Promotes free-trade as importers and exporters are released from exchange rate risk.
d) Automatically to correct balance of payments (exchange rate) disequilibrium

241. If APS = 0.2 and National income is 4 billion, then consumption is:
a) 4 b) 0.8
c) 3.2 d) 1

242. If reserve requirement is 20% and bank has no assets then by selling 50 million securities by central
cause:
a) Money supply to decrease by 250 million
b) Money supply to increase by 300 million
c) Money supply to decrease by 75 million
d) Money supply to increase by 75 million

243. If demand curve increases by keeping supply curve same. If demand curve shift to right, what happen to
interest rate and credit.

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Increase, decrease b) Increase, increase

c) Decrease, increase d) Decrease, decrease

244. Production Possibility Frontier demonstrates those baskets of goods which can be produced when all
resources of an economy are employed efficiently
a) Complete b) Efficient
c) Scarce d) Abundant

245. If government want to increase economic growth. (Select TWO)

a) Decrease tax b) Increase government spending
c) Reduce subsidy d) Increase tax
246. Good which demand increase with the increase in price is called
a) Normal good b) Giffen good
c) Inferior good d) Superior good

247. Which bank provide service to its members only.

a) Commercial bank b) Retail bank
c) Specialized bank d) Cooperative bank

248. If firm has no incentive to increase its profit. Which type of profit it is earning.
a) Economic profit b) Normal profit
c) Economic loss d) Accounting profit

249. If elasticity of demand is inelastic, then

a) 0 b) >1
c) <1 d) 1

250. Increase in indirect tax cause:

a) Cost push inflation b) Disequilibrium in market
c) Wage spiral inflation d) Demand pull inflation

251. Supply curve also called as

a) Minimum price curve b) Maximum price curve
c) Marginal benefit curve d) None

252. Government increase tax at

a) Recession b) Trough
c) Prosperity d) Downturn

253. Three fundamental basic economic questions, what to produce, How to produce, for whom to
produce is due to ?
a) Want b) Need
c) Scarcity d) Opportunity cost

254. Which two are the assumptions of production possibility frontier / curve;
a) Increase opportunity cost b) Input resources are fixed
c) Full employment d) Inefficient use of resources

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

255. Sovereignty of consumer from higher to lower;

a) Planned economy, Mixed economy, Market economy,
b) Mixed economy, Market economy, Planned economy
c) Market economy, Mixed economy, Planned economy
d) Market economy, Planned economy, Mixed economy,

256. Due to increase of price of good A. The demand of good of B decreases. These goods are;
a) Substitute goods b) Complementary goods
c) Club good d) Inferior good

257. Production function describes the relationship between;

a) Labour and capital b) Input and output of the firm.
c) Cost and production d) Production and revenue

258. Select any TWO Features of monopoly;

a) Control over key inputs b) Few sellers
c) Non availability of close substitutes d) Homogeneous good

259. Collusion is a feature of;

a) Perfect competition b) Monopolistic competition
c) Monopoly d) Oligopoly

260. According to Friedman long run Philips curve is at natural rate of unemployment.
a) Positive b) Negative
c) Vertical d) Horizontal

261. Central bank reserve as custodian of monetary resources;

a) True
b) False

262. Central bank carries gold and foreign currency reserves;

a) True
b) False

263. Which of the following is not a function of commercial bank;

a) Locker facility b) Custodian of monetary reserves
c) Discounting bill of exchange d) Advancing loan

264. Which of the following is not a qualitative control;

a) Open market operation b) Direct action
c) Moral Persuasion d) Special Deposit

265. Which of the following is not a monetary measure to correct current account deficit;
a) Exchange rate b) Quotas
c) Export promotion d) Deflation

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

266. J-Curve shows impact of

a) B.0.P b) B.0.T
c) T.0.T d) None

267.
Calculate GDP of country is 346,230
Consumption on goods 230,000
Govt. expenditure 51,750
Exports 58,650
Imports 80,000
Taxes 70,000
Subsidies 40,000
Depreciation 15,750
Capital formation 85,830

a) True
b) False

268. Which of the following is not a determinant of consumption?

a) Real income b) Change in interest rate
c) Change in Fiscal policy d) GDP

269. Which of the following increases multiplier effect?

a) Increases in MPT b) Increases in MPS
c) Increases in MPM d) Increases in MPC

270. Which of the following is limitation of accelerator principle;

a) Capital output ratio same b) Full employment
c) Credit is elastic d) Spare capacity

271. High inflation is in ;

a) Peak / Boom b) Recession
c) Depression d) Recovery

272. Islamic system is;

(i) Based on Quran
(ii) Man is ownership of resources

a) (i) correct b) (ii) correct

c) Both are correct d) Both are incorrect

273. Non-collusive is a part of;

a) Monopolistic b) Monopoly
c) Perfect competition d) Oligopoly

274. In accelerator, investment is the function of ?

a) GDP b) Consumption

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

c) Income d) Growth

275. Which of the following goods have horizontal demand curve?

a) Substitute Goods b) Complementary goods
c) Public goods d) Private Goods

276. In mixed economy supply curve increase, What effect on equilibrium and market;
a) Both increase b) Both decrease
c) Market increase and no effect on d) Market increase equilibrium decrease
equilibrium

277. Which of the following is not a factor of production?

a) Land b) Labor
c) Entrepreneur d) Money

278. Multiplier Value?

a) Equal to one b) Less than one
c) Greater than one d) Zero

279. Which two are not the features of Islamic Economic System
a) Practicing moderation b) Charging interest
c) Hoarding d) Redistribution of wealth

280. Demand curve is also called

a) MR curve b) AR curve
c) TR curve d) TP curve

281. Given

Quantity Total cost AC

1 100 ?
2 120 ?
3 135 ?
4 145 ?

282. Movement in supply curve is due to?

a) Change in price b) Interest Rate
c) Wages d) Govt. Expenditures

283. What effect on Giffen graph is due to income?

a) Negative b) Positive
c) No d) Both

284. Change in price increase is more than change in supply increase?

a) Less Elastic b) Perfectly Inelastic
c) Perfectly elastic d) Relatively Elastic

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

285. Investment Bank and commercial bank compare each other. Which one is not a factor of investment
bank?
a) A financial intermediary b) Provide financial services
c) Accept deposits d) Provide underwriting services

286. In which one of the following in not policy of Statement Bank of Pakistan?
a) Fiscal Policy b) Monetary policy
c) Interest rate d) Supplier of currency

287. Which one is not the factor of GDP deflator?

a) Nominal GDP b) Real GDP
c) Inflation rate d) Deflation rate
288. Indirect Taxes are those taxes which are not only levied on Customer by retailers.
a) True
b) False

289. Which two are not motives liquidity preference theory;

a) Saving b) Transactional
c) Interest rate d) Precautionary

290. Real interest rate is the difference between nominal rate and inflation;
a) True
b) False

291. Select two natural rates of unemployment;

a) Frictional unemployment b) Cyclic unemployment
c) Structural unemployment d) Seasonal unemployment

292. Which of the following about credit money is correct (TWO);

a) Increase indirect consumption b) Reduce inflation
c) Firm expand revenue and other d) Inclines people to spend less retained earning

293. If demand for money is negative slope and supply for money is positive slop. These are at Equilibrium
Point below equilibrium point cause.
a) Surplus b) Shortage
c) Demand to move right d) Demand to move left

294. If money supply is of 90 million. Total 600,000 Transaction are done having General Price of 300.
What is velocity?
a) 1 b) 2
c) 3 d) 5

295. High Prices with high unemployment and reduction in GDP is

a) Inflation b) Stagflation
c) Hyperinflation d) Moderate inflation

296. Increase in demand for credit money interest rate

a) Increase

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

b) Decrease

297. Which of the following TWO are correct?

a) Indirect tax increase cost push inflation
b) Indirect tax increase supply
c) Increase interest rate increase demand pull inflation
d) Devaluation of currency increase export and decrease import

298. According to long run Philip curve input prices is equal to expected output prices at natural rate of
unemployment
a) True
b) False

299. In Business cycle is on Y-axis and

a) Time, Economic activity
b) Economic Activity, Time

300. Contractionary Fiscal Policy (Select TWO)

a) Govt. spending increases b) Tax decrease
c) Govt. spending decrease d) Tax increase

301. Which of the following is not advantage of direct Tax (Select Two)
a) Equitable b) Unpopular
c) Economical d) Evasion

302. In oligopoly small firm has large share in market; (Select TWO correct)
a) Low barrier to entry b) Price discrimination
c) Indeterminate demand curve d) Interdependence of firms

303. If supply of commodity X decrease also reduce the supply of commodity Y. These goods are;
a) Substitute b) Complement
c) Independent d) Cross elasticity

304. In circular flow of income, Outer flow is called

a) Real flow
b) Money flow

305. If demand is perfectly inelastic and supply is perfectly elastic, consumer surplus is (TWO);

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Zero demand, supply infinite b) demand infinite, supply zero

c) More than producer d) less than producer

306. Which of the following is Not assumption of variable proportion laws;

a) Technology increases constantly b) This is for short and long run
c) FOPs can combine d) FOPs homogenous

307. Decrease in long run average cost is called

a) Economies of scale b) Diseconomies of scale
c) Constant return to scale d) None
308. Which one is true about Philip’s curve;
a) Sloping downward with increase in rate of unemployment and lies in 4th quadrant
b) Vertical slope
c) Positive relation between inflation and unemployment
d) Sloping downward with increase in rate of unemployment and lies in 3’^ quadrant

309. Demand curve of perfectly competition is chose more appropriate;

a) Elastic b) Inelastic
c) Perfectly elastic d) Perfectly inelastic

310. Which of the following is not a feature of market economy.

a) Freedom of enterprise b) Environment of competition
c) Prices are determined through price d) Social security
mechanism

311. Which of the following is correct about credit money (Select TWO);
a) Increase indirect consumption b) Reduce inflation
c) Firm expand revenue other than d) Easily to establish trust between parties
using retained earning

312. GDP deflator calculation does not include

a) Real GDP b) Prices of goods/services
c) GDP of comparable to other country d) fixed basket of goods

313. Which of the following is feature of perfect competition (Select TWO):

a) Free entry and exist b) Homogenous Product
c) Inelastic demand curve d) Few sellers

314. At which stage firm must shutdown;

a) AR = MC b) AR < AVC
c) AR > AVC d) AR > TC

315. Perfect competition can earn super normal profit;

a) True
b) False

316. Monopolist can charge high price where elasticity

a) Low

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

b) High

317. In mixed economy, prices are determined by market forces without intervention of Government.
a) True
b) False

318. Which of the following is NOT in Islamic Economic System (Select TWO)
a) Hoarding b) Nationalization of Property
c) Riba d) Equity

319. Demand is,

a) Willing to buy b) Able to buy
c) Willing and able to buy d) None

320. Islamic Mode of economics support

321. In perfect competition supply/revenue curve is

322. Interest increases so

323. Free price mechanism / competition, self-interest, refers to

324. The demand for a factor of production is called

325. Short Run average cost curve is always

326. Value of credit money multiplier is reciprocal of

327. Demand curve are also called

328. A depreciation of domestic currency will make

329. Which one is not a precondition of law of supply?

a) Price of a product b) Income of the customer
c) Indirect tax d) Cost of production

330. Which of the following will not lead to inflation? {Select TWO)
a) Increase in money supply b) Increase in interest rate
c) Increase in tax exemptions d) Increase in competition

331. Due to increase in direct and indirect tax, disposable income will
a) Increase b) Decrease
c) Remain same d) All of these

332. If marginal prosperity to consume is 0.8 and tax rate is 30% the increase in investment by Rs.
50 will increase the national income to ?
a) 100 b) 50
c) 500 d) 167

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

333. If the money demand curve is negative slope and money supply curve is vertical then, the
rightward shift in money supply will the interest rate and a temporary in money
supply.

334. If the money demanded curve is negatively sloped and money supply is positively sloped then the
rightward shift of money demand curve will the interest rate and the amount of
credit.

335. If the reserve ratio is fixed to 20% and the government sells securities of 60 million in the open market,
then money supply will.
a) Increase by 75 million b) Decrease by 75 million
c) Increase by 300 million d) Decrease by 300 million

336. are the financial institutions that provide banking and other financial services to its members.
a) Commercial banks b) Retail banks
c) Cooperative banks d) Investment banks

337. If the exchange rate is fixed and balance of payment is surplus, then the price and money income will
rise;
a) True
(b) False

338. Which of the following is a tool for light/loose monetary policy (Select TWO)
a) Increase money supply
b) Increase services requirement
c) Buying securities in open market by central bank
d) Increase rate of interest

339. Which of the following statement is correct;

I. Central Bank can issue currency
II. Taxes are the main tool of fiscal control

a) Statement I is correct b) Statement II is correct

c) Both statements are correct d) Both statements are incorrect
340. Due to flood the agricultural production has been reduced what will be the effect on supply curve?
a) Increase movement along the supply curve
b) Decrease movement along the supply curve
c) Shift supply curve to the right
d) Shift supply curve the left

341. If the income elasticity of a demand for a good is positive but less than 1, then the good will be;
a) Luxuries b) Substitute
c) Necessities d) Inferior

342. In monopolistic competition, the demand curve is downward sloping because (Select two options)
a) Firm is price taker
b) Firm has control over market

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

c) Because goods produced have no close substitute

d) Goods produced are close substitute but differentiated

343. Firm of perfect competition and monopolistic competition are similar because products are
homogenous;
a) True
(b) False

344. NNP is calculated by (Select two options);

a) GNP — depreciation
b) GDP + net income from abroad — depreciation
c) GDP + Tax — Subsidy— depreciation
d) GDP + net income from abroad

345. If the planned injections from the circular flew of income and less than the planned leakages then there
will be;
a) Increase in National income
b) decrease in National income

346. When the fisherman catches a fish and sells in the market the earn return is called?
a) Rent b) Interest
c) Wage d) Profit

347. What are the two advantages of mixed economic system? (Select Two options)
a) Reduction in income inequalities b) Works for the weak agent of economy
c) Increase in income inequalities d) Efficient due to bureaucratic

348. Planned economic system is also termed as

a) Capitalism
b) Socialism

349. PPC move due to advancement in technology?

a) Inward b) outward
c) remain same d) movement in curve

350. FC = 100, Variable cost per unit is 5. Firm produce 100 unit and sell each 20.
Find profit ? Rs. 1400

351. Point C indicates ?

a) Unattainable resources b) Under realized resources

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

352. If reserve ratio is 20%. Initial deposit is 100. Then total credit is ?
a) 100 b) 20
c) 500 d) 50

353. Real GDP calculate on;

a) Current year
b) Base year

354. GDP is 192100 and population is 226. Per capita income is?
a) 650 b) 750
c) 850 d) 950

355. The patterns of output fluctuations are known as

a) Aggregate demand b) business cycles.
c) Production function d) Output

356. What is the function of tariff? (Select TWO)

a) Decrease government revenue b) increases the price of imports
c) improves the current account deficit. d) Provide less protection to domestic
suppliers
357. Which of the following not function of qualitative control;
a) Change in marginal requirement b) Direct Action
c) Moral persuasion d) Reserve requirement

358. If reserve ratio is 20% and initial deposit is 60 million. Credit creation will be?

359. Individual Demand;

a) Market Public b) Market Substitute
c) Market Complementary d) Market Private

360. Which of the following is NOT the features of multiplier formula?

a) MPM b) MPX
c) MPT d) MPS

361. Liquidity trap occur where:

a) Interest Rate closer to zero b) Money demand decrease
c) Bond price decrease d) Interest Rate closer maximum

362. If rate of inflation in abroad is less, then effect on Pakistan economy will be;
a) Pakistan export will increase b) Pakistan export will likely to increase
c) Pakistan export will likely to d) Pakistan import will likely to increase decrease

363. Curve of autonomous investment is parallel to,

a) Y-axis b) X-axis
c) Both are correct d) None of these

364. Goods which demand increase as Price increase.

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Inferior goods b) Giffin goods

c) Normal goods d) Luxury goods

365. Unemployment during the recession is called {Select TWO)

a) Structural unemployment b) Cyclic unemployment
c) Frictional unemployment d) Demand deficient unemployment

366. If GDP is low, the type of unemployment is

367. In recession business confidence is high

a) True
b) False

368. Following are item related to Balance of payment:

Trade in good -2902

Trade in services 1210
Dividend received -500
Foreign direct investment 1500
Foreign reserve -300
Foreign remittance 900
Current account deficit/surplus by Rs.

369. Living standard of people is calculate by

a) Real GDP per person b) Nominal GDP per person
c) Net national product d) Gross domestic product

370. Which of the following is the social security benefit?

a) Undistributed profit b) Discount
c) Transfer payment d) Personal income

371. In Short run, Perfect competition firm enjoy profit where:

a) TR less than AC b) TR less than AVC
c) TR greater than AC d) TR greater than TVC

372. A Pakistani resident makes an investment in a company resident in United States. This transaction will
be recorded in Pakistan as:
a) credit in current account b) debit in current account
c) credit in capital account d) debit in capital account

373. Each and every point on demand curve represents:

a) Firm equilibrium b) Market equilibrium
c) Producer equilibrium d) Consumer equilibrium

374. Pakistani export increases foreign currency and money supply in the country?
(Supply of, demand for)……….(Increase, decrease)

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

375. In Monopolist Competition, firm expands output as long as:

a) MR = AR b) MR < MC
c) MR > MC d) MR = MC
376. In quantity theory of money, if M = 90 million, P - 30,000, T - 6000 then find the value of V?
a) 2 b) 3
c) 4 d) 5

377. Indirect tax is an example of Income tax.

a) True
b) False

378. When inflation rate exceeds 5% then it is said to be inflation:

a) Trotting b) Creeping
c) Moderate d) stagflation

379. The real interest rate is the difference of nominal interest and expected interest.
a) True
b) False

380. If demand is elastic and supply is inelastic then decrease in supply will:
a) Increase in price equilibrium is more than increase quantity equilibrium
b) Increase in price equilibrium is less then increase quantity equilibrium
c) Decrease in price equilibrium is more than decrease quantity equilibrium
d) Decrease in price equilibrium is less then decrease quantity equilibrium
[Note: All options are wrong]

381. If reserve ratio of commercial bank increase than the actual reserve ratio, then (Select TWO)
a) Increase money supply of bank
b) Decrease money supply of bank
c) Increase loan ability to general public
d) Decrease loan ability to general public

382. Which is/are not included in GDP deflator.

a) Prices of imported good b) Capital goods
c) Both d) None of these

383. The difference between Pakistan export merchandise and import merchandise is :
a) Balance of payment
b) Current account deficit
c) Both
d) Balance of trade

384. Which good is demanded by individuals

a) Public good
b) Private good

385. When calculating national income through value added method, we ignore
a) Rent of self-occupied home

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

b) Income earned through capital investment

c) Salaries being paid to house maids, home taxi drivers
d) None of these

386. Goods are vertical for sum of the individuals and firms
a) Private good b) Public goods
c) Club good d) Merit good

387. During the year, a flood destroyed significant portion of agricultural land used to produce rice.
What would be the short-run effect on supply diagram for rice?
a) Inward b) Outward
c) Expansionary d) Concretionary

388. If Price of complement in production increases, then supply of other good will be:
a) Increase and decrease equilibrium b) Decrease and decrease equilibrium
c) Increase and increase equilibrium d) Decrease and Increase equilibrium

389. A person retire is:

a) Unemployment b) Employment
c) Not in labour work d) None of these

390. If total cost increase from Rs.500 to Rs.650 and unit increase from 20 to 30. Fixed cost is
Rs.200. Which of the following is correct
a) VC is rise by Rs.250 b) MC is rise by Rs.5
c) AFC was originally Rs.10 d) AFC decreased by Rs.6.67

391. Mr. A paid Rs.100 tax on his income Rs.1000 and Mr. B paid Rs.200 tax on his income Rs.800.
The type of tax is:
a) Equality b) Progressive
c) Regressive d) Proportional

392. The horizontal sum of individual demand curve is:

a) Market demand of public good b) Market demand of private good
c) Market demand of substitute good d) Market demand of complementary good

393. Which of the following is not lead to inflation?

a) Increase in money supply b) Increase in interest rate
c) Increase in tax exemption d) Increase government expenditure

394. Which of following TWO are correct about concretionary monetary policy.
a) Increase in rate of interest b) decrease in rate of interest
c) Increase in money supply d) decrease in money supply

395. Which of the following is not the feature of State bank of Pakistan?
a) Issuance of currency b) Credit creation
c) Clearing agent d) Exchange rate control

396. Which of the following is not the quantitative control of monetary policy?

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Bank rate b) Credit rationing

c) Special deposit d) Change in reserve requirement

397. Sum of all the entries in balance of payment is zero.

a) True
b) False

398. Select any TWO limitations of multiplier:

a) Full employment has achieved
b) No change in tax rate
c) Continuous spending
d) Sufficient amount of consumer goods is not available

399. During the year, a flood destroyed significant portion of agricultural land used to produce rice.
What would be the short-run effect on supply diagram for rice?
a) A movement down the existing supply curve
b) A movement up the existing supply curve
c) A shift to the right of the supply curve
d) A shift to the left of the supply curve

400. What will be the effect on rate on interest if money supply increase in a country?
a) Increase
b) Decrease

401. Aggregate demand and aggregate supply are studied in macroeconomics.

a) True
b) False

402. In the given graph, “Co” represents:

a) Autonomous consumption b) Induced consumption

c) Total Consumption d) Average propensity to consume

403. Demand contracts when?

a) Price of a commodity decreases b) Price of a commodity increase
c) Price of others commodity decreases d) Price of other commodity increase

404. Movement in supply curve occurs? (Select TWO)

a) Increase in price of a product

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

b) Rightward shift in supply curve

c) Leftward shift in supply curve
d) Decrease in price of a product

405. Certain economies may want to appreciate their currency so as to temper demand, and make their
exports relatively more expensive. This concept relates to
a) J-Curve
b) Inverse of J-Curve

406. Supply curve of perfect competition is the same as:

a) MR b) MC
c) AR d) AC

407. Which one is NOT the function of a commercial bank.

a) Education loan b) Providing locker facility
c) Controlling credits d) Discounting Bill of exchange

408. Which of the following statement is correct.

a) 0 < MPC < -1 b) 0 < MPC < 1
c) 0 < MPC > 1 d) All of these

409. Curve “BB” shows there is in a country

a) Unemployment b) Depletion of Resources

c) Not use resources efficiently d) Economic growth

410. Which of the following is NOT a Factors of production?

a) Oil b) Money
c) Land d) Capital

411. In the given diagram which point shows full employment level?

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) A b) B
c) C d) None of these

412. Which one is Not a feature of Mixed economic system?

a) Personal freedom b) Unhindered price mechanism
c) Social welfare d) Discourage income inequalities

413. Goods which demand decrease as Income increase.

a) Normal goods b) Inferior goods
c) Giffen goods d) Public goods

414. is a leasing agreement whereby the bank buys an item for a customer then leases it back
to them over an agreed time period. The bank makes a fair profit by charging rent on the property.
a) Mudaraba b) Murabaha
c) Musharaka d) ljara

415. When supply curve shift to right, then effect on market price (Increase, decrease) and
quantity will be (Increase, decrease)

416. If government sets the price level above the equilibrium, then there will be
a) Surplus
b) Shortage

417. If income elasticity of demand for a good is positive, but less than 1, then good will be?
a) Normal b) Inferior
c) Substitute d) Complement
418. If the demand curve is perfectly inelastic then curve will be (Select TWO)
a) Horizontal b) Vertical
c) Parallel to x-axis d) Parallel to y-axis

419. Economic profit is equal to? (Select TWO)

a) Normal profit b) Abnormal profit
c) TR = TC d) TR < TC

420. Which one is NOT an example of Oligopoly

a) Oil sector b) Media Industry
c) Shoe outlets d) Automobile Industry

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

421. Which one is included in GDP while calculating through "Value added approach”
a) Price of Intermediate goods b) Income from Old-car sale
c) Income from resale of old d) Services for self-consumption
furniture

422. Central bank has reserve of

a) Silver
b) Foreign currency

423. Reason of inflation is

a) Aggregate supply falls
b) Aggregate demand exceeds aggregate supply
c) Aggregate supply increase
d) Interest rate rises

424. Which of the ’TWO” are called Transfer payment

a) Pension fund b) Salary
c) Zakat d) Taxation

425. Which of the following is example of direct or Indirect taxation.

a) Sale Tax (direct or Indirect tax)

b) Wealth Tax (direct or indirect tax)
c) GST (direct or Indirect tax)
d) Income Tax (direct or Indirect tax)
426. Which of the following is NOT included in GDP deflator?
a) Imported goods
b) Capital goods

427. If the demand equation for a good is Qd = 18 — P and the supply equation is Qs = 8 + 3 P and the price is
set equal to 1.5 above the equilibrium level, there will be an excess units
a) Demand 14 b) Supply 14
c) Demand 6 d) Supply 6

428. Which of the following is not a function of commercial bank;

a) Education loan b) Providing Locker facility
c) Controlling credits d) Discounting bill of exchange

429. Which of the following is not a factor of production?

a) Land b) Money
c) Oil d) Labor

430. Factor of payment is Domestic income?

a) True
b) False

431. In which country mixed economic system is dominant?

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) Germany b) Cuba
c) Finland d) USA

432. Which economic system has the motive to earn profit only?
a) Islamic economic system b) planned economic system
c) Mixed economic system d) market economic system

433. Raw materials are?

a) Land b) Labor
c) Capital d) Entrepreneur

434. GNP is equal to?

GDP + income received from abroad + income pay to export
GDP - income received from abroad - income pay to export
GDP + income received from abroad - income pay to export
GDP - income received from abroad + income pay to export

435. Which of the following does not cause Rightward shift in MEC?
a) Population growth b) Change in income
c) Surplus productive capacity d) Excess demand

436. Which of the following TWO do not relate to Leading economic indicators?
a) Personal incomes b) Manufacturers' new orders)
d) Money supply c) Manufacturing and trade sales

437. Which of the following TWO are the reasons for demand-pull inflation
a) Monetary stimulus b) Higher indirect taxes
c) Fiscal stimulus d) Wage-price spiral

438. Identify the type of unemployment when wages are set above equilibrium wage?
a) Frictional b) Cyclical
c) Structural d) Wage-classical

439. Which of the following statement is correct regarding types of credit?

a) Bank credit exists when an individual or firm goes to a central bank, receives an amount of
money against some security
b) Amount taken in advance from any customer with promise of providing goods in present is
called advances
c) Trade credit exists between a customer and a seller, usually in the commercial sector.
d) All of these

440. Which of the following is NOT the objective of Monetary policy.

a) To keep inflation low b) Exchange rate stability
c) To control fiscal deficit d) Credit control

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

441. Suppose, over a given time period the export price index is raised by 15% and the import price index
raised by 8%, then the terms of trade will be:
a) 187.5 b) 87.5%
c) Deficit by 6.48% d) 106.48

442. Certain economies may want to appreciate their currency so as to temper demand, and make their
exports relatively more expensive. This concept relates to
a) J-Curve
b) Inverse of J-Curve

443. Which of the following is correct about an increase in MPC?

a) Shift in consumption function upward b) Shift in consumption function downward
c) A flatter consumption function d) A steeper consumption function

444. The slope of induced investment curve is:

a) Vertical b) Horizontal
c) Downwards towards left d) Upwards towards left

445. Which two of the following are not traditional functions of State bank of Pakistan?
a) Islamization of Banking b) Institutionalization of saving and investment
c) Formulation and conduct of monetary d) Regulation and supervision of financial system
and credit policy system

446. A government controls (Select TWO)

a) Demand pull inflation by reducing interest rates
b) Demand pull inflation by reducing spending b)
c) Cost-push inflation by deflationary fiscal policy
d) Cost-push inflation by increasing income tax rates

447. Which of the following increase or decrease with increase or decrease of production level?
a) Variable cost b) Average fixed cost
c) Marginal cost d) Financial cost

448. In Islamic finance, a joint enterprise where partners share profits and losses is called:
a) Musharaka b) Mudaraba
c) Murabaha d) Ijara

449. In view of acceleration principle, which two of the following are NOT determinants of level of
investment?
a) Change in demand of goods and b) Change in income
services
c) Change in sentiments d) Change in interest rate

450. Pakistan is facing BOP deficit and has floating exchange rate. Which is true?

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

a) The injections are greater than b) External value of PKR to rise

withdrawals
c) External value of PKR to fall d) AD is increasing

451. Find GDP using Value added method:

• Imports 90 million
• Salaries paid to employees 140 million
• Earned sale revenue 400 million
Sale revenue include : Local Sales 250 million
Sales to Government 80 million
Exports 70 million
• Tax on sales 40 million
• Tax on profits 50 million

(Answer is 310 million)

452. Under Islamic system:

1. Allow social justice
2. Tangible reduction in Social economic factors
a) Both are correct b) Both are not correct
c) 1 is correct d) 2 is correct

453. Islamic economic system has features like:

a) Mixed economy b) Single owner economy
c) Free economy d) planned economy

454. Money is a factor of production?

a) True
b) False

455. Derived demand is related to factor of production?

a) True
b) False

456. If elasticity is zero then goods are?

a) Dependent b) Independent

457. If supply curve is more elastic than the demand curve then price will.
a) Convergent case of cobweb b) Divergent case of cobweb

458. ATC is equal to:

a) AFC + VC b) FC+VC
c) AFC + AVC d) MC

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

459. Implicit cost of firm related to towards:

a) Sub-normal profit b) Normal profit
c) Super-normal profit d) Economic profit

460. If Pakistan take loan from Japan, how it can be recorded?

a) Credit side of current account b) Credit side of capital account
c) Debit side of current account d) Debit side of capital account

461. If price is greater than AVC but less than AC, then the Firm is
a) Maximizing profit b) Minimizing profit
c) Normal profit d) Shut-down
462. If Bank buys an asset from third party and sells to company on deferred basis, it is called:
a) Musharaka b) Mudaraba
c) Murabaha d) Ijara

463. Per capita income calculation show:

National Income (Billion) Total Population (Million)

Year 1 180,000 225
Year2 180,800 226

a) Improving b) Declining
c) Same d) None of the above

464. When inflation rate below 5% then it is said to be inflation:

a) Trotting b) Creeping
c) Moderate d) Stagflation

465. Collusive agreement belongs to:

a) Monopolistic b) Monopoly
c) Perfect competition d) Oligopoly

466. What type on inflation, ability to store money is loss.

a) Hyper-inflation b) Stagflation
c) Both d) None of the above

467. Which Tax is more equitable?

a) Progressive b) Regressive
c) Proportional d) Flat

468. Which of the following is not included in Transfer payment. (Select TWO )
a) Unemployment benefits d) Government subsidies
c) Reduction in corporate taxes c) Pension fund

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

469. Over a long period of time:

a) demand becomes more elastic and supply becomes less elastic
b) demand becomes less elastic and supply becomes more elastic
c) both demand and supply become more elastic.
d) both demand and supply become less elastic

470. What is correct about Constant return to scale.

a) If more labor is added to given amount of capital, marginal output remains constant
b) If labor and capital doubles, output double
c) If labor to capital ratio doubles, output double
d) If labor and capital doubles, output remain half

471. Which is not included in Central bank monetary policy.

a) Market operations b) Reserve requirement
c) Exchange rate d) Discount rate

472. Which of the following is feature of monopolistic competition (Select TWO):

a) Free entry and exist b) Perfect knowledge of market
c) Downward sloping demand d) Few sellers
curve

473. Reserve ratio is 10%, leakage is 8% and initial deposit is 10 million. Calculate total credit creation.
a) 100 million b) 55.55 million
c) 125 million d) None of the above

474. is the rate set at a fixed parity against one or more foreign currencies.
a) Flexible exchange rate b) Fixed exchange rate
c) Floating exchange rate d) None of the above

475. Which of the following is not permitted in Islamic economic system?

a) Special deposit with the bank in current account
b) Asset backed investment
c) Investment in the traditional market fund
d) legitimate investment in assets

476. Which of the following is multiplier assumptions:

a. Tax constant
b. Price constant
c. Existence of Spare capacity
d. All of above

477. In case of depression, Rate of Employment will be:

a. High
b. Low

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

c. constant
d. All of above

478. If there is decrease in Demand and supply

a. increase in equilibrium in price
b. decrease equilibrium in price
c. increase in equilibrium quantity
d. decrease in equilibrium quantity
479. If the rate of tax increases with increase in income:
a. Regressive
b. Progressive
c. Proportional
d. indirect

480. Nature of sales tax

a. Progression
b. Regression
c. Equitable
d. Proportional
481. If disposable income decrease then :
a. Decrease consumption and increase saving
b. Increase saving
c. Decrease consumption
d. Decrease both consumption and saving
482. If supply is sensitive to price then supply curve will be :
a. Flatter
b. Steeper
c. Horizontal
d. Vertical
483. If Pakistan take loan from Japan then in which side of capital you will record it ?
a. Debit side of capital account
b. Credit side of capital account
c. Both a and b
d. None
484. economic model in which fop , output , goods and services produced are known as:
a. A). Money flow
b. B). Chart flow
c. C). Real flow
d. D). Circular flow

Answer Key

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

1-d 2-b 3-d 4-b 5-d

6-d 7-a 8-c 9-d 10-c
11-c 12-a 13-d 14-b 15-c
16-d 17-c 18-c 19-a 20-d
21-b 22-c 23-a 24-b 25-b
26-c 27-a 28-c 29-b 30-a
31-a 32-b 33-a 34-b 35-J- Curve
36-a 37- recovery 38-a 39-b 40-a
41-a 42-d 43-a 44-d 45-a, c
46-a 47-a 48-c,d 49-a 50-a
51-a 52-c 53-c 54-c 55-a
56-a 57-b 58-b 59-c 60-a
61-a,d 62-b 63-c 64-a 65-b
66-d 67-a 68-a 69-a 70-b
71-a 72-c,d 73-a,c 74-b,d 75-d
76-a,c 77-c,d 78-a 79-d 80-d
81-b 82-c 83-c 84-a,b 85- b
86-a 87-b 88-d 89-b 90-a
91-b 92- b 93-c 94-c 95-b
96- a 97-c 98-b 99-c 100-b
101-a,c 102-b,c 103-d 104-c 105-b
106-c 107-b 108-a,b 109-b 110-a
111-b 112-b,c 113-b 114-a 115-c,d
116-c,d 117-a,c 118-d 119-c 120-b
121-a,c 122-c 123-b,d 124-a 125-b
126-b 127-d 128-a 129-c 130-b
131-b,a 132-d 133-b,d 134-a 135-a,c
136-a 137-c 138-b 139-b 140-b
141-c 142-b 143-b 144-c 145-a,b
146-a 147-c 148-b- 149-c 150-c
151-d 152-d 153-25 154-b 155-d
156-d 157-b 158-b 159-c 160-b,c
161-a 162-a 163-d 164-a 165-a
166-c 167-c 168-a 169-PES 170-c
171-b 172-b 173-a,b 174-a,c 175-c
176-a 177-a 178-b 179-a 180-a,c
181-a,c 182-b 183-a 184-a 185-a,c
186-d 187-a,b 188-a,b 189-c 190-a
191-c 192-b 193-b,d 194-d 195-c,d
196-a 197-a 198-a 199-a 200-b
201-a 202-a 203-c 204-b 205-a
206- 207-b 208-a,b 209-a,b 210-a,d
211-a 212-b 213-Fall,Rise 214-c 215-a
216-c 217-a 218-d 219-b,d 220-b,c
221- 222-c 223-a,d 224-b 225-a
Recession,Trough

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

226-a,b 227-b,c 228-b 229-b,c 230-b

231-b,d 232-b 233-a 234-a 235-a,d
236-c 237-c 238-b 239-a 240-a,d
241-c 242-a 243-a 244-c 245-a,b
246-b 247-d 248-b 249-c 250-a,b
251-a 252-c 253-c 254-b,c 255-c
256-b 257-b 258-a,c 259-d 260-c
261-a 262-a 263-b 264-a 265-b,c
266-a 267-a 268-d 269-d 270-d
271-a 272-d 273-d 274-c 275-a
276-d 277-d 278-c 279-b,c 280-b
281- 282-a 283-c 284-a 285-c
286-a 287-d 288-b 289-a,c 290-a
291-a,c 292-a,c 293-b 294-b 295-b
296-a 297-a,d 298- 299-Eco,Time 300-c,d
301-b,d 302-c,d 303-b 304-b 305-a,c
306-a,b 307-a 308-a 309-c 310-d
311-a,c 312-d 313-a,b 314-b 315-a
316-a 317-b 318-a,c 319-c 320-Rba free
system
321-Perfectly 322-Increase cost 323-Capitalism 324-Derived 325-U-shaped
elastic of holding money demand
326-Reserve ratio 327-Marginal 328-Export 329-b 330-b,d
benefit curve cheaper
331-b 332-a 333- 334- 335-d
336-c 337-a 338-a,c 339-c 340-d
341-c 342-b,d 343-b 344-a,b 345-b
346-d 347-a,b 348-b 349-b 350-1400
351-a 352-c 353-b 354-c 355-b
356-b,c 357-d 358-300 359-d 360-b
361-a 362-d 363-b 364-b 365-b,d
366-CYCLIC 367-b 368-1292 369-a 370-c
371- 372-d 373- 374- 375-c
376-a 377-b 378-a 379-b 380-All options
are wrong
381-b,d 382-b 383-a 384-b 385-a
386-d 387-a 388-c 389-c 390-c
391-c 392- 393-b 394-a,d 395-b
396-c 397-a 398-a,d 399-d 400-b
401-a 402-a 403-b 404-a,d 405-b
406-b 407-c 408-b 409-d 410-b
411-b 412-b 413-b 414-d 415-DEC, INC
416-a 417-a 418-b,d 419-a,c 420-c
421-a 422-b 423-a 424-a,c 425-a)Indirect tax
b)Direct c)Indirect
d)Direct

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)
 Last Assignment

426-b 427-d 428-c 429-b 430-a

431-d 432-d 433-a 434-c 435-c
436-a,c 437-a,c 438-d 439-c 440-c
441-d 442-b 443-a 444-d 445-a,b
446-b,d 447-a 448-a 449-c,d 450-c
451-310 MILLION 452-c 453-a 454-b 455-a
456-b 457-b 458-c 459-b 460-b
461-b 462-c 463-c 464-b 465-d
466-a 467-a 468-b,c 469-c 470-a
471-c 472-c 473-b 474-b 475-c
476-d 477-b 478-b 479-b 480-b
481-d 482-a 483-b 484-c

Compiled by: Sajjad Ahmed Malik (for suggestions/corrections: 0333-6179092 whats app only)