Important Economic Curves and Indicators CDS Questions

CDS Economy

Important Economic Curves and Indicators MCQ Questions


13.
Which policy is most closely associated with the Phillips Curve?
A.
Fiscal policy
B.
Monetary policy
C.
Trade policy
D.
Income policy
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ANSWER :
B. Monetary policy
14.
What concept explains why increasing taxes beyond a point reduces revenue?
A.
Phillips Curve
B.
Engel Curve
C.
Laffer Curve
D.
Demand Curve
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ANSWER :
C. Laffer Curve
15.
The Engel Curve is derived by plotting:
A.
Consumption vs Price
B.
Consumption vs Income
C.
Income vs Savings
D.
Price vs Demand
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ANSWER :
B. Consumption vs Income
16.
The Laffer Curve is used to argue against:
A.
High inflation rates
B.
Excessive taxation
C.
Low interest rates
D.
Excessive subsidies
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ANSWER :
B. Excessive taxation
17.
An Engel Curve for luxury goods typically:
A.
Slopes downward
B.
Slopes upward
C.
Is a vertical line
D.
Is a horizontal line
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ANSWER :
B. Slopes upward
18.
In the short run, the Phillips Curve demonstrates:
A.
A trade-off between inflation and unemployment
B.
A direct relationship between inflation and unemployment
C.
No relationship between inflation and unemployment
D.
Equal levels of inflation and unemployment
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ANSWER :
A. A trade-off between inflation and unemployment