Important Economic Curves and Indicators CDS Questions

CDS Economy

Important Economic Curves and Indicators MCQ Questions


7.
The Laffer Curve suggests that very high tax rates can lead to:
A.
Maximum tax revenue
B.
A decrease in tax revenue
C.
No change in tax revenue
D.
An increase in economic growth
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ANSWER :
B. A decrease in tax revenue
8.
What is indicated by a shift to the right in the Phillips Curve?
A.
Decrease in natural unemployment rate
B.
Higher tax revenue
C.
Increase in natural unemployment rate
D.
Lower consumption rates
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ANSWER :
C. Increase in natural unemployment rate
9.
The Engel Curve indicates that as income rises, the proportion of income spent on necessities:
A.
Increases
B.
Decreases
C.
Remains constant
D.
Becomes zero
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ANSWER :
B. Decreases
10.
What happens at the peak of the Laffer Curve?
A.
Maximum unemployment
B.
Maximum tax revenue
C.
Minimum inflation
D.
Maximum consumption
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ANSWER :
B. Maximum tax revenue
11.
Engel Curve for inferior goods slopes:
A.
Upward
B.
Downward
C.
Horizontally
D.
Vertically
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ANSWER :
B. Downward
12.
Which curve would be used to analyze government policy effectiveness on revenue?
A.
Engel Curve
B.
Demand Curve
C.
Laffer Curve
D.
Supply Curve
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ANSWER :
C. Laffer Curve