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1) What is deflation________________? a. Deficit Budget b. Reduction in taxation c. Increase in public expenditure d. Reverse of inflation
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2) Two countries can gain from foreign trade if ? a. Cost ratios are different b. Tariff rates are different c. Price ratios are different d. A and C of above
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3) Which of the following is a valid currency______________? a. Promissory note b. Currency note c. Exchange rate d. Bank cheque
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4) From each according to his ability to each according to his need is the theoretical slogan of ? a. Feudal System b. Capitalist System c. Fascist System d. Communist System
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5) Exchange rate of which of the following currencies falls because of persistent balance of payments deficit ? a. Gold currency b. Hard currency c. Silver currency d. Soft currency
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6) Oil is measured in barrels. What is the abbreviation for barrels________________? a. Brl b. Bel c. Bbl d. Obl
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7) Commercial policy means_______________? a. Policy about markets b. Policy about money supply c. Policy about imports and exports d. Policy of controlling of prices of goods
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8) Which city in Germany has the distinction of housing the first car manufacturing plant in the world ? a. Frankfurt b. Bonn c. Berlin d. Stuttgart
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9) Balance of payments of a country includes ? a. Balance of trade b. Capital receipts and payments c. Savings and investment account d. A and B of above
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10) Which of the following is not a function of a commercial bank? a. Accepting public deposits b. Granting loan and advances c. Undertaking agency functions d. Banker to the government
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11) The bank established for loans to very small enterprises in Pakistan is called_______________? a. Micro Finance Bank b. Moderba Bank c. SME- Bank d. First MINI Bank
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12) Treasury bill is used for_________________? a. Getting short term loans b. Getting long term loans c. Treasury bill in not credit instrument d. Treasury bill is a govt. tax bill
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13) When the State Bank wants to decrease money supply in the country, it _______________? a. Buys govt. securities in stock market b. Sells govt. securities c. Lowers discount rate d. B and C of above
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14) When a commercial bank creates credit its immediate effect is that it raises__________________? a. The exchange rates b. The interest rates c. The money supplies d. The real national income
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15) The Liquidity Trap condition occurs at a_______________? a. Low rate of interest b. Very low rate of interest c. High rate of interest d. Very high rate of interest
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16) The power of a bank to create credit is affected by ? a. The cash reserve requirement b. The amount of cash available c. The number of branches of a bank d. A and B of above
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17) Pakistan’s fiscal years starts from? a. 1st September b. 1st January c. 1st April d. 1st July
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18) A tariff______________? a. Increase the volume of trade b. Reduces the volume of trade c. Has no effect on volume of trade? d. A and C of above
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19) Velocity of circulation of money means ? a. The number of times a unit of money changes hands daily b. The number of times as unit of money changes hands monthly c. The number of times a unit of money changes hands annually d. The number of times a unit of money changes value
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20) Government of Pakistan issues currency on the basis of__________________? a. Availability of gold in the country b. Availability of dollars in the country c. Demand for money in the country d. Tax collection
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21) Economic development is measured on the basis of ? a. Increase in nominal GNP b. Increase in real GNP c. Increase in personal income d. Increase in government revenue
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22) When the stock market is rising it is ? a. Bearish b. Bullish c. Hottest d. Rising up
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23) What would cause a country’s exchange rate to fall ? a. An increases demand for its exports b. Increased demand for its imports c. An increased inflow of capital d. None of the above
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24) The cause of inflation is ? a. Increase in money supply b. Fall in production c. Increase in money supply and fall in production d. Decrease in money supply and fall in production
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25) According to the law of demand. When ? a. Price increase demand decreases b. Price decreases demand decreases c. Price increased demand increases d. None of these
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26) Gross National income is always more than Net National income because it includes ? a. Foreign income b. Capital consumption allowance c. Indirect taxes d. Direct taxes
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27) A budgetary deficit means ? a. Total expenditure is more than total revenue b. Current expenditure is more than current revenue c. Capital expenditure is more than capital revenue d. Total expenditure is more than current revenue
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28) Which is most likely to cause a more even distribution of income ? a. An increase in indirect taxes b. An increase in managers salaries c. An increase in progressive taxation d. An increase in the rate of inflation
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29) Economic development ? a. Is the same as economic growth b. Means improvement in lifestyle c. Exists when there is equal distribution of income d. All of the above
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30) Which of the following is a withdraw from the circular flow income stream ? a. Investment b. Subsidies c. Taxation d. Consumption
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