Top 50+ Solved History of Economic Thought MCQ Questions Answer
Q. Which two philosophers developed the principal concept of Marxism?
a. Marx and Engels
b. Marx and Aristotle
c. Marx and Adam
d. Plato and Aristotle
Q. Walras’ law implies that if there are N markets, we only need to find equilibrium prices in
a. N-1 markets.
b. N-2 markets.
c. all markets
d. N-3 markets
Q. The Fisher effect .
a. States that nominal interest rates are equal to the real interest rates plus the expected inflation rate
b. States that nominal interest rates are equal to real interest rates minus the expected inflation rate
c. Predicts that as the expected inflation rate rises, so do nominal interest rates
d. Predicts that as the expected inflation rate rises, real interest rates fall
Q. If you want a 4% real interest rate and the expected inflation rate is 3%, you should set the
a. 1%
b. 4%
c. 7%
d. 20%
Q. The average number of times that a dollar is spent in buying the total amount of final goods and
a. gross national product
b. the spending multiplier
c. the money multiplier.
d. Velocity
Q. Adam Smith begins with the Wealth of Nations with an example of a pin factory in order to
a. the accumulation of capital
b. the division of labor
c. the perils of governmentregulation
d. All of the above
Q. Ricardo Theory Of Rent is based on ------ reasoning
a. Deductive
b. Empirical
c. illogical
d. Inductive
Q. According to Ricardo, as an economy grows, the are the only group that would benefit.
a. Workers
b. Land-owners
c. Bussiness Man
d. None of the above
Q. According the law of diminishing returns:
a. The marginal product of a variable factor eventually falls as more units of it are added to a fixed factor
b. Marginal utility falls as more units of a product are consumed
c. The total product falls as more units of a variable factor are added to a fixed factor
d. The marginal product eventually increases as more units of a variable factor are added to a fixed factor
Q. The quantity theory of money is expressed by the identity equation
a. MV/PY
b. MV=Y
c. M= PYV
d. MV=PY
Q. Both sides of the quantity theory of money identity represent . *
a. Real GDP
b. Inflation.
c. Nominal GDP.
d. The Money Supply.
Q. In the quantity theory of money, P and Y represent the price and quantity of:
a. all raw materials and natural resources sold in an economy
b. all financial services sold in an economy.
c. all durable capital (tractors, manufacturing equipment) purchased in the economy
d. all finished goods and services sold in an economy
Q. Nominal GDP in terms of is represented by how much money there is and how many times it is spent, while Nominal GDP in terms of is represented by all goods and services and their prices.
a. buyers & sellers
b. domestic production& international production
c. profit & loss
d. imports & exports
Q. Say's law states that
a. we can have an inflation or recession, but never both at the same time
b. the normal state of economic affairs is recession
c. demand creates its own supply
d. supply creates its own demand
Q. Adam Smith in his book, The Wealth of Nations, developed a theory about:
a. communism
b. capitalism
c. regulating foreign investment
d. ensuring internal order