HAT Subject (Economics) FLP 2 Free Quiz

1. What is a Giffen good?

A. Giffen good B. Veblen good C. Normal good D. Luxury good

2. What is the income effect?

A. Substitution effect B. Price effect C. Income effect D. Quantity effect

3. What curve shows the relationship between income and quantity demanded?

A. Engel curve B. Demand curve C. Supply curve D. Cost curve

4. What does the rational consumer aim to do?

A. Minimize cost B. Maximize profit C. Maximize utility D. Minimize utility

5. What demand curve holds utility constant?

A. Marshallian B. Hicksian C. Walrasian D. Compensated

6. What measures the income needed to maintain utility after a price change?

A. Equivalent variation B. Consumer surplus C. Compensating variation D. Deadweight loss

7. What is relative poverty?

A. Absolute B. Severe C. Relative D. Moderate

8. What is a graphical representation of income distribution?

A. Gini coefficient B. Lorenz curve C. Poverty line D. HDI

9. What provides small loans to low-income individuals?

A. Macrofinance B. Commercial banking C. Microfinance D. Investment banking

10. What consists of economic activities not regulated or taxed?

A. Formal sector B. Public sector C. Private sector D. Informal sector

11. What meets present needs without compromising future generations?

A. Economic growth B. Sustainable development C. Industrialization D. Modernization

12. What curve suggests environmental degradation increases with income until a turning point?

A. Environmental Kuznets Curve B. Laffer curve C. Phillips curve D. Kuznets curve

13. What is a significant part of developing countries' employment?

A. Formal B. Public C. Informal D. Private

14. What is the minimum income level required to meet basic needs?

A. Gini coefficient B. HDI C. Poverty line D. GDP

15. What were the Millennium Development Goals?

A. SDGs B. HDI C. Gini D. MDGs

16. What can contribute to economic development by bringing capital and technology?

A. Foreign aid B. Portfolio investment C. FDI D. Foreign trade

17. What is a fundamental tool in econometrics?

A. Correlation B. Causation C. Linear regression D. Variance

18. What is the independent variable in a regression?

A. Independent B. Dependent C. Response D. Outcome

19. What does a higher R-squared indicate?

A. Lower B. Zero C. Negative D. Higher

20. What tests the significance of regression coefficients?

A. R-squared B. P-value C. F-statistic D. Standard error

21. What is used to test individual regression coefficients?

A. F-statistic B. R-squared C. T-statistic D. Standard error

22. What is used to address endogeneity?

A. Control variables B. Dependent variables C. Independent variables D. Instrumental variables

23. What test is used to test for unit roots?

A. Dickey-Fuller B. Augmented Dickey-Fuller C. Phillips-Perron D. KPSS

24. What is a property of non-stationary time series that move together in the long run?

A. Correlation B. Causation C. Stationarity D. Cointegration

25. What captures the unexplained variation in the dependent variable?

A. Explained B. Error term C. Residual D. Coefficient

26. What method estimates parameters that maximize the likelihood function?

A. MLE B. OLS C. GMM D. IV

27. What is absolute advantage?

A. Comparative B. Competitive C. Strategic D. Absolute

28. What is the balance of trade?

A. Balance of payments B. Balance of trade C. Current account D. Capital account

29. What is the exchange rate?

A. Interest rate B. Exchange rate C. Inflation rate D. Growth rate

30. What is a floating exchange rate?

A. Floating B. Fixed C. Pegged D. Managed

31. What is a fixed exchange rate?

A. Floating B. Flexible C. Fixed D. Free

32. What theory suggests countries export goods using abundant factors?

A. Comparative advantage B. Absolute advantage C. Strategic trade D. Heckscher-Ohlin theory

33. What institution provides financial assistance for balance of payments problems?

A. IMF B. WTO C. World Bank D. UN

34. What is foreign direct investment?

A. Portfolio investment B. Foreign aid C. FDI D. Foreign trade

35. What is the increasing integration of economies?

A. Isolation B. Globalization C. Protectionism D. Regionalism

36. What occurs when a customs union shifts production from more efficient to less efficient?

A. Trade creation B. Trade surplus C. Trade diversion D. Trade deficit

37. What is GDP?

A. GNP B. NNP C. GDP D. NDP

38. What is deflation?

A. Deflation B. Inflation C. Disinflation D. Stagflation

39. What is monetary policy?

A. Monetary policy B. Fiscal policy C. Trade policy D. Industrial policy

40. What is the unemployment rate?

A. Inflation rate B. GDP growth C. Unemployment rate D. Interest rate

41. What type of unemployment is caused by changes in the economy's structure?

A. Frictional B. Cyclical C. Seasonal D. Structural

42. What type of unemployment is caused by business cycle fluctuations?

A. Cyclical B. Structural C. Frictional D. Seasonal

43. What is the natural rate of unemployment?

A. Cyclical B. Seasonal C. Frictional + Structural D. Total unemployment

44. What is aggregate supply?

A. Aggregate supply B. Aggregate demand C. Total income D. Total expenditure

45. What is the multiplier effect?

A. Negative B. Zero C. Multiplier effect D. Neutral

46. What is the marginal propensity to consume (MPC)?

A. MPS B. Savings C. Investment D. MPC

47. How is the multiplier calculated?

A. 1/(1 - MPC) = 1/MPS B. 1/(1 - MPS) C. 1/MPC D. 1/MPS

48. What is nominal GDP?

A. Nominal GDP B. Real GDP C. GDP deflator D. Potential GDP

49. What market structure has a single seller?

A. Perfect competition B. Monopoly C. Oligopoly D. Monopolistic competition

50. What type of price discrimination charges each consumer the maximum they are willing to pay?

A. Second-degree B. First-degree C. Third-degree D. Uniform

51. What is a cartel?

A. Competitive B. Monopolistic C. Cartel D. Price-taking

52. What does a high HHI indicate?

A. Competitive B. Low concentration C. Perfect competition D. Highly concentrated

53. What is deadweight loss?

A. Consumer surplus B. Producer surplus C. Deadweight loss D. Total surplus

54. Which market structure creates deadweight loss?

A. Perfect competition B. Oligopoly C. Monopolistic competition D. Monopoly

55. What are laws designed to promote competition?

A. Price controls B. Anti-trust laws C. Subsidies D. Tariffs

56. What market has low barriers to entry?

A. Monopoly B. Oligopoly C. Perfect competition D. Contestable market

57. What does the law of demand state about quantity demanded as price increases?

A. Increases B. Decreases C. Unchanged D. Unpredictable

58. What does the law of supply state about quantity supplied as price increases?

A. Increases B. Decreases C. Unchanged D. Unpredictable

59. What does elastic demand mean?

A. More B. Less C. Equal D. Zero

60. What is an inferior good?

A. Normal good B. Luxury good C. Necessity D. Inferior good

61. What are substitute goods?

A. Complementary B. Substitute C. Unrelated D. Inferior

62. What is marginal utility?

A. Total utility B. Average utility C. Zero D. Marginal utility

63. What does the law of diminishing marginal utility state?

A. Increases B. Decreases C. Remains constant D. Unpredictable

64. What are fixed costs?

A. Variable costs B. Total costs C. Fixed costs D. Marginal costs

65. What does monetary economics study?

A. Money, banking, and central banks B. Fiscal policy C. Trade policy D. Industrial policy

66. What are the functions of money?

A. Medium of exchange only B. Store of value only C. Medium of exchange, store of value, unit of account D. Unit of account only

67. What is the money supply?

A. Fiscal B. Debt C. Deficit D. Money supply

68. What are open market operations?

A. Open market operations B. Discount rate C. Reserve requirement D. Interest rate

69. What is the reserve requirement?

A. Discount rate B. Federal funds rate C. Prime rate D. Reserve requirement

70. What is M1?

A. M2 B. M1 C. M3 D. M4

71. What is the quantity theory of money?

A. MV = PY B. MV = PY C. MV = PY D. MV = PY

72. What is the velocity of money?

A. Money supply B. Money demand C. Price level D. Velocity

73. What strategy sets a specific inflation rate as a goal?

A. Price targeting B. Inflation targeting C. Output targeting D. Exchange rate targeting

74. What suggests that unemployment cannot be permanently reduced by inflation?

A. Natural rate hypothesis B. Phillips curve C. Okun's law D. Laffer curve

75. What is the money multiplier?

A. Monetary base B. Money supply C. Reserve ratio D. Money multiplier

76. What is quantitative easing?

A. Quantitative easing B. Open market operations C. Discount rate D. Reserve requirement

77. What is the transactions motive for holding money?

A. Speculative B. Precautionary C. Liquidity D. Transactions

78. What describes the relationship between interest rates and maturities?

A. Yield curve B. Term structure C. Phillips curve D. Laffer curve

79. What does an inverted yield curve often signal?

A. Expansion B. Growth C. Recession D. Recovery

80. What does producer theory explain?

A. How firms maximize profit B. Consumer behavior C. Market structure D. Welfare analysis

81. What is the marginal product of an input?

A. Average product B. Total product C. Marginal product D. Fixed product

82. What is the marginal rate of technical substitution (MRTS)?

A. MRTS B. MRS C. MR D. MC

83. What is total cost?

A. Fixed cost B. Total cost C. Variable cost D. Marginal cost

84. What does decreasing returns to scale mean?

A. Less B. More C. Equal D. Zero

85. What does constant returns to scale mean?

A. Less B. More C. Equal D. Zero

86. What condition defines cost-minimizing input combination?

A. MRS B. MR C. MC D. MRTS = input price ratio

87. What does accounting profit include?

A. Economic profit B. Normal profit C. Gross profit D. Accounting profit

88. What is the supply curve of a perfectly competitive firm?

A. ATC B. AVC C. MC above AVC D. AFC

89. What are public goods?

A. Private goods B. Club goods C. Public goods D. Common goods

90. What occurs when people benefit from a public good without paying?

A. Public goods B. Private goods C. Club goods D. Free-rider problem

91. What is a tax?

A. Subsidy B. Tax C. Transfer D. Expenditure

92. What type of tax takes the same percentage from all income groups?

A. Progressive B. Regressive C. Flat D. Proportional

93. What are transfer payments?

A. Subsidies B. Grants C. Loans D. Transfer payments

94. What is public debt?

A. Deficit B. Surplus C. Public debt D. Expenditure

95. What is fiscal policy?

A. Monetary policy B. Trade policy C. Industrial policy D. Fiscal policy

96. What fiscal policy involves decreasing spending or increasing taxes?

A. Contractionary B. Expansionary C. Neutral D. Loose

97. What is a subsidy?

A. Tax B. Subsidy C. Loan D. Grant

98. What does the Laffer curve say about very high tax rates?

A. Increases B. Constant C. Reduces D. Zero

99. What is a value-added tax (VAT)?

A. Sales tax B. Income tax C. Property tax D. VAT

100. What is a sales tax?

A. VAT B. Sales tax C. Income tax D. Property tax

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