1. This is an economic system driven by purely self-interest of consumers and producers.

a .Command economy b.Market economy/ c.Communism d.Mixed economy

2. Economists prefer to use real GNP than current or nominal GNP as a measure of
aggregate output because
a.Real GNP adjusts current GNP for inflation b.All of the choices c.Real GNP adjusts for the
unequal distribution of income d. Current GNP always understates actual output changes

3. The shift in the production possibilities frontier results from:

a. Changes in the combination of good produced b.Inflation
c. Changes in production techniques d. Increase in economic resources

4. This economic decision addresses the tendency of overprotection.

a. For whom to produce? b.When to produce? c.How to produce? d.How much to produce?

5. The expenditures of the domestic economy on imported goods are called:

a. transfer payments b.imports c. investment income d.exports

6. It is an increase in the capacity of an economy to produce goods and services, compared

from one period of time to another. a.Economic Growth
b.Economic Development c.Economic Growth rate d.Technological Change

7. What is the probable opportunity cost of increasing three times the budget of the
Agriculture sector than the previous year?
a. Improvement in the facilities and programs in Agriculture
b. Growth in the service sector
c. Decrease in performance of other sector
d. d.Increase farm subsides

8. Fiscal policies are government policies related to:

a. wages and prices b.Money supply,credit and interest rates
b. Government expenditures and taxation d.Investment

9. A negative inflation rate or declining prices is known as

a. Reinflation b.Disinflation c.Preinflation d.Deflation

10. Economics is a___science.

a. Agricultural b.environmental c.social d.Biological

11. Which economy has an absolute advantage in sugarcane production?

a. Singapore b.Philippines c.China d.Brazil

12. Given the following equations:S=-25+0.4Y;G=20;I=15;T=0 Suppose the Nominal GDP in

2009 was 500 billion pesos and the CPI was 125,then the real GDP must be:
a. P 499 billion
b. P 500 billion
c. P 125 billion
d. P 300 billion

13. Which of the following are two fundamental conflicting problems,the reason why
economist exist?
a. Limited income and limited goods
b. Choice and allocation
c. Scarcity and unlimited goods
d. Limited resources and unlimited wants/needs

14. By open market operations we mean the actions of the government to:
a. Increase or decrease government spending b.Buy and sell investment goods and
services c. Increase or decreases taxes d .Buy and sell government securities of bonds

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15. An economic concept that utilizes available resources to its best and efficient use.
a. Allocation
b. distribution
c. Ceteris paribus
d. opportunity cost

16. As a result of tariff imposition,the imposing country suffers from efficiency losses which
include the following:

a. Production distortion losses

b. Consumption distortion losses
c. Production distortion losses and consumption distortion losses

17. The opposite of depreciation is called:

a. appreciation
b. evaluation
c. revaluation
d. Depreciation

18. The fixed exchange rate,on the other hand is determined by:
a. forces of supply and demand through foreign exchange
b. the supply for a particular currency alone
c. the government through the Central Bank
d. the demand for a particular currency alone

19. Which of the following would make the demand for a product elastic?

a. it is considered a necessity
b. it is unique
c. it is very cheap
d. it has many possible uses

20. The following are perceived to be more beneficial,except:

a. Economic growth
b. Per capita income growth
c. Population growth
d. Economic development

21. When evaluation or depreciation occurs,it means that:

a. the foreigners cannot determine how much to pay for the devalued currency
b. the foreigners have to pay less for the devalued currency
c. the foreigners have to lay more for the devalued currency
d. the foreigners have to pay the same for the devalued currency

22. The opposite of devaluation is called:

a. Appreciation b.evaluation c.revaluationd.Depreciation

23. The bulk of government spending is a accounted for by

a. maintenance and operating expenses b.capital outlay
c.debt service d.personal services

24. An economic system often associated with Hitler’s Germany,Mussolini’s Italy,and the
militaristic government of Japan all before the end of the second world war.

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a. Capitalism b.communism c.socialism d.Fascism

25. Economies and diseconomies of scale occur mainly because:

a. Firms in an industry must be relatively large in order to use the most efficient productive
techniques
b. of the law diminishing returns
c. of the inherent difficulties involved in managing and coordinating a large business
enterprise
d. The short run average total cost curve rises when marginal product is greater than
average total cost

26. William of Ockman introduced this important economic principle:

a. Ceteris paribus b.absolute advantage c.opportunity cost d.Allocation

27. When the Philippine currency depreciates against the US dollar due to forces of supply
and demand, it means that:
a. the value of the peso remains the same
b. b.none of the choices is correct
c. the value of the peso declines relative to the dollar
d. the value of the peso increases against the dollar

28. An extremely high inflation known as

a. Hyperinflation b.stagflation c.super inflation d.Megainflation

29. The following are currently categorized as communist countries, except:

a. China b.Japan c.Laos d.Cuba

30. If there is a negative relationship between the price of good X and the demand for good
Y,then: a.Goods X and Y are substitutes b.Goods X and Y are complement
c.Good Y is an inferior good d.Good Y is a normal good

31. This is a phase in the business cycle when economic prosperity is experienced
a. peak phase b.recessional phase c.expansion phase d.trough phase

32. Commodities whose demand varies directly with money income refers to:
a. Complementary goods b.normal goods c.Substitute goods d.inferior goods

33. Act as the grease in the marketing machinery

a. Transportation b.Selling c.Market intelligence d.All of the choices

34. It refers to the tabular representation of the relationship between price and quantity
demanded.a.Law of supply b.Demand schedule c.Law of demand d.Supply schedule

35. Marginal cost and average cost are related in this way:
a. When MC is equal to AC,MC is at a minimum b.When MC is less than AC,AC is falling
c.When MC is greater than AC,AC is falling d.None of the choices

36. In the Philippines,national income is done and maintained by what office/agency?

a. Department of Finance b.National Economic Development Authority(NEDA)
c.Department of Budget and Management d.Department of Trade and Industry

37. Trade liberalization is the result of the following except one:

a. elimination of export subsidies b.limited flow of goods from abroad
c.tariff reduction d.elimination of production subsidies

38. When the exchange rate(P/S)increases,the value of the peso relative to the dollar
becomes:a.Stronger b.cannot be determined c.remains the same d.weaker

39. Which of the following is least likely to have an elastic demand?

a. Imported wine b.Cars c.Gasoline d.Jewelries

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40. He is widely regarded as father of modern economics.
a. Heinrech Anton de Bary b.James Naismith c.Adam Smith

41. These are actual costs or“out of pocket”expenses incurred in the production of goods
and services: a.explicit costs b.implicit costs c.variable costs d.fixed costs

42. The concept of opportunity costs refers to the following except:

a. Trade-offs in all decisions b.A result of choices c.Result of allocation d.Sufficiency of
resources

43. A field in international economics which focuses on real transactions that involve a
physical movement of goods or a tangible commitment of economic revenues is:
a. Production economics b.International Trade c.Marketing economics d.International
Finance

44. The following are forms of trade restrictions except one:

a. Quota b.Subsidy c.tariff d.Import licenses

45. When a country engages in international transactions, it always involves at least two
kinds of currencies.The value of domestic currency relative to the foreign currency is
called:
a. foreign exchange rate b.domestic exchange rate c.foreign exchange d.none of the
choices

46. The stage of production which is considered to be rational stage of production:

a. Stage 2 b.Stage 4 c.Stage 3 d.Stage 1

47. These are taxes imposed as a fraction of the value of the imported goods(i.e.20%of the
important value)a.all of the choices b.export tariffs c.Ad Valorem tariffs d.Import tariffs

48. When the Central Bank of the Philippines devaluates its currency against the US dollar, it
means that:
a. the value of the peso declines relative to the dollar
the value of the peso increases against the dollar
b. the value of the peso remains the same
c. none of the choices is correct

49. The economic framework which has been defined by GATT-WTO calls for the expansion
and stabilization of world trade through the following except one:
a. Reduction of domestic price and export subsidies
b. Increase tariffs on all agricultural products
c. Tariffication of quantitative restrictions
d. Market access commitments and harmonization of sanitary and phyto-sanitary measures

50. The addition to total output resulting from employing an additional unit of resource is:
a. Marginal product b.Total product c.A production function d.Average product