McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Economics (CBCS) .
Chapters
| 101. |
Under the redistribution effect of tariff, the loss of consumer’s surplus is neither transferable to the produces nor to the government and is called by Kindleberger as the |
| A. | Deadweight loss of the tariff |
| B. | Cost of the tariff |
| C. | Both (a) and (b |
| D. | All of the above |
| Answer» D. All of the above | |
| 102. |
Under the effects of a tariff under partial equilibrium analysis, the revenue effect is the change in government receipts due to |
| A. | Producer’s surplus |
| B. | Consumer’s satisfaction |
| C. | Imposition of tariff |
| D. | Loss of consumer’s surplus |
| Answer» C. Imposition of tariff | |
| 103. |
The increase in the domestic production of a commodity due to imposition of a tariff is |
| A. | Protective or production |
| B. | Consumption effect |
| C. | Terms of trade effect |
| D. | Competitive effect |
| Answer» A. Protective or production | |
| 104. |
Import quotas may be fixed either in terms of quantity or |
| A. | The supply of the product |
| B. | The value of the product |
| C. | Consumption of the product |
| D. | Demand of the product |
| Answer» B. The value of the product | |
| 105. |
The physical limitation of quantities of different products to be imported from foreign countries within a specified period of time is called |
| A. | Revenue tariff |
| B. | Gains from trade |
| C. | Import quota |
| D. | Optimum tariff |
| Answer» C. Import quota | |
| 106. |
Import quotas include |
| A. | Ad valorem duty |
| B. | Tariff or custom quota |
| C. | Specific duty |
| D. | Compound duty |
| Answer» B. Tariff or custom quota | |
| 107. |
The effects of quota under partial equilibrium include |
| A. | Redistributive effect |
| B. | Consumption effect |
| C. | Price effect |
| D. | All of the above |
| Answer» D. All of the above | |
| 108. |
When import quotas are fixed after negotiations between the importing and exporting countries, it is known as |
| A. | Import licensing |
| B. | Mixing quota |
| C. | Bilateral quota |
| D. | Unilateral quota |
| Answer» C. Bilateral quota | |
| 109. |
The objective of import quotas include |
| A. | To protect domestic industries from foreign competition by restricting imports |
| B. | To stabilize and maintain the external price level by regulating exports |
| C. | To correct adverse balance of payments restricting exports |
| D. | None of the above |
| Answer» A. To protect domestic industries from foreign competition by restricting imports | |
| 110. |
Under the unilateral quota system, the autonomously fixed quota may either be |
| A. | Fixed or variable |
| B. | Positive or negative |
| C. | Global or allocated |
| D. | All of the above |
| Answer» C. Global or allocated | |
| 111. |
A tariff or custom quota may either be |
| A. | Increasing or decreasing |
| B. | Fixed or variable |
| C. | Unilateral or bilateral |
| D. | Autonomous or agreed |
| Answer» D. Autonomous or agreed | |
| 112. |
The system devised to administer the types of quotas is |
| A. | Tariff quota |
| B. | Import licensing |
| C. | Export duties |
| D. | None of the above |
| Answer» B. Import licensing | |
| 113. |
The quota system in which domestic producers of a quota fixing country are required to make use of both domestic raw materials and a specified proportion of imported raw materials to produce a product |
| A. | Bilateral quota |
| B. | Tariff or custom quota |
| C. | Import quota |
| D. | Mixing quota |
| Answer» D. Mixing quota | |
| 114. |
Tariff can be levied upon |
| A. | Export only |
| B. | Import only |
| C. | Both exports and imports |
| D. | Partly exports partly imports |
| Answer» C. Both exports and imports | |
| 115. |
The tariffs or duties levied upon goods originating from abroad and scheduled for the home country are |
| A. | Exim duties |
| B. | Import duties |
| C. | Export duties |
| D. | None of the above |
| Answer» B. Import duties | |
| 116. |
High tariffs have the effect of restricting |
| A. | The volume of international trade |
| B. | The price of goods |
| C. | The quantity of goods |
| D. | All of the above |
| Answer» A. The volume of international trade | |
| 117. |
A tariff or import duty which are a combination of the ad valorem and specific duty |
| A. | Transit duty |
| B. | Sliding scale duty |
| C. | Revenue tariff |
| D. | Compound duty |
| Answer» D. Compound duty | |
| 118. |
On the basis of retaliation, tariffs can be of the types of |
| A. | Revenue and protective tariffs |
| B. | Retaliatory and countervailing tariffs |
| C. | Non-discriminatory and discriminatory tariffs |
| D. | Double column or multiple tariffs |
| Answer» B. Retaliatory and countervailing tariffs | |
| 119. |
Once import quota is levied on a commodity, the domestic price of the commodity |
| A. | Fluctuates |
| B. | Remains constant |
| C. | Decreases |
| D. | Rises |
| Answer» D. Rises | |
| 120. |
An increase in domestic production of goods due to imposition of import quota is called |
| A. | Protective or production effect |
| B. | Consumption effect |
| C. | Revenue effect |
| D. | Price effect |
| Answer» A. Protective or production effect | |
| 121. |
Which of the following items is not included in the invisible items of balance of payments? |
| A. | Shipping |
| B. | Insurance |
| C. | Export and import of goods |
| D. | None of the above |
| Answer» C. Export and import of goods | |
| 122. |
In balance of payments account, all goods exported and imported are recorded in |
| A. | Capital accounts |
| B. | Merchandise account |
| C. | Current account |
| D. | Savings account |
| Answer» C. Current account | |
| 123. |
If a country has fundamental deficit in in the balance of payments, it should resort to |
| A. | Exchange control |
| B. | Devaluation of its currency |
| C. | Inflation |
| D. | Loans |
| Answer» B. Devaluation of its currency | |
| 124. |
Capital account includes |
| A. | Invisible export |
| B. | Long-term capital transaction |
| C. | Invisible import |
| D. | All of the above |
| Answer» D. All of the above | |
| 125. |
Balance of trade includes |
| A. | Visible items |
| B. | Invisible items |
| C. | Both visible and invisible items |
| D. | None of the above |
| Answer» A. Visible items | |
| 126. |
A country which gives loans and grants on a large scale to other countries has |
| A. | A surplus in its BOP on capital account |
| B. | A deficit in its BOP on capital account |
| C. | A surplus in its BOP on current account |
| D. | A deficit in its BOP on its current account |
| Answer» B. A deficit in its BOP on capital account | |
| 127. |
‘twin deficits’ refer to revenue deficit and |
| A. | Capital deficit |
| B. | Capital account BoP deficit |
| C. | Current account BoP deficit |
| D. | None of the above |
| Answer» C. Current account BoP deficit | |
| 128. |
Measurement of deficit or surplus in the balance of payments in in international transaction is in a given year is |
| A. | Balance of payments |
| B. | Balance of trade |
| C. | Transfer payments to foreigners |
| D. | None of the above |
| Answer» A. Balance of payments | |
| 129. |
Overvaluation of domestic currency makes |
| A. | Foreign goods cheaper and exports dearer in foreign countries |
| B. | Foreign goods dearer and exports cheaper in foreign countries |
| C. | Domestic goods cheaper and foreign goods dearer |
| D. | None of the above |
| Answer» A. Foreign goods cheaper and exports dearer in foreign countries | |
| 130. |
Devaluation encourage |
| A. | Exports |
| B. | Imports |
| C. | Both exports and imports |
| D. | None of the above |
| Answer» A. Exports | |
| 131. |
A systematic record of receipts and payments in international transactions of a country in a given year is called |
| A. | Balance of trade |
| B. | Balance of payments |
| C. | Terms of trade |
| D. | Capital account |
| Answer» B. Balance of payments | |
| 132. |
The most important items in the current account are |
| A. | Foreign aid and pensions |
| B. | Private remittances and gifts |
| C. | Merchandise exports and imports |
| D. | Transportation and insurance |
| Answer» C. Merchandise exports and imports | |
| 133. |
Lending to foreign countries represents |
| A. | Capital inflows |
| B. | Capital outflows |
| C. | Services outflows |
| D. | Services inflows |
| Answer» B. Capital outflows | |
| 134. |
Payment to foreign country is a |
| A. | Credit transaction |
| B. | Debit transaction |
| C. | Internal transaction |
| D. | External transaction |
| Answer» B. Debit transaction | |
| 135. |
The category that do not includes in the balance of payments account is/are |
| A. | The current account |
| B. | The capital account |
| C. | The official settlements account |
| D. | The savings account |
| Answer» D. The savings account | |
| 136. |
The expression (X-M) denotes |
| A. | The balance of trade |
| B. | The balance of payments |
| C. | The domestic trade |
| D. | None of the above |
| Answer» A. The balance of trade | |
| 137. |
If the difference between exports and imports is zero |
| A. | Balance of trade balances |
| B. | Balance of payments balances |
| C. | Capital account equals current account |
| D. | None of the above |
| Answer» A. Balance of trade balances | |
| 138. |
The current account BOP deficit will be beneficial for the economy if foreign borrowings are used to finance |
| A. | Transportation |
| B. | Shipping goods |
| C. | Real investment |
| D. | Small and medium enterprises |
| Answer» C. Real investment | |
| 139. |
In the equation Y=C+I+G+(X-M), G denotes |
| A. | General expenditure |
| B. | Government expenditure |
| C. | Expenditure on gold |
| D. | Expenditure on goods |
| Answer» B. Government expenditure | |
| 140. |
If export is less than import, there is a ….. in balance of trade. |
| A. | Surplus |
| B. | Deficit |
| C. | Favourable |
| D. | Balance |
| Answer» B. Deficit | |
| 141. |
In the equation B=Rf-Pf, Pf represents |
| A. | Payments made by foreigners |
| B. | Payments made to foreigners |
| C. | Payments made to residents of a country |
| D. | Payments made to exporters |
| Answer» B. Payments made to foreigners | |
| 142. |
The difference between exports and imports of a country is its |
| A. | Balance of visible trade |
| B. | Balance of invisible trade |
| C. | Balance of payments |
| D. | None of the above |
| Answer» A. Balance of visible trade | |
| 143. |
Under direct control measures, the government aims at limiting |
| A. | The volume of imports |
| B. | The volume of exports |
| C. | Both imports and exports |
| D. | None of the above |
| Answer» A. The volume of imports | |
| 144. |
Given the foreign exchange rate and prices in a country, an increase in the value of exports causes an increase in |
| A. | Expenditures |
| B. | Incomes |
| C. | Investments |
| D. | Employment |
| Answer» B. Incomes | |
| 145. |
Devaluation results in |
| A. | Increase in domestic price of imports and decrease in foreign price of exports |
| B. | Increase in foreign price of exports and decrease in domestic price of imports |
| C. | Decrease in domestic price of imports and increase in foreign price of exports |
| D. | None of the above |
| Answer» A. Increase in domestic price of imports and decrease in foreign price of exports | |
| 146. |
Undervaluation of currency encourages |
| A. | Imports |
| B. | Exports |
| C. | Investments |
| D. | None of the above |
| Answer» B. Exports | |
| 147. |
The equation Rf-Pf <0 denotes |
| A. | Surplus in balance of payments |
| B. | Deficit in balance of payments |
| C. | Equilibrium in balance of payments |
| D. | None of the above |
| Answer» B. Deficit in balance of payments | |
| 148. |
Imports in balance of payments account are shown as a |
| A. | Negative item |
| B. | Positive item |
| C. | Invalid item |
| D. | None of the above |
| Answer» A. Negative item | |
| 149. |
Which of the following account does not included in the Reserve account? |
| A. | IMF |
| B. | SDR |
| C. | Reserve and monetary gold |
| D. | Savings |
| Answer» D. Savings | |
| 150. |
Exchange rate depreciation reduces |
| A. | The value of home currency in relation to foreign currency |
| B. | The value of foreign currency in relation to a home currency |
| C. | Both the values of home currency and foreign currency |
| D. | None of the above |
| Answer» A. The value of home currency in relation to foreign currency | |
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