PPSC paper 1

1. Which one of the following is not a purpose b. A single firm supplies natural
of taxation? resources to an entire industry
a. To dissuade people from increasing c. A single firm can supply the market
their income by extra work output more efficiently than many
b. To raise revenue for the firms
government d. None of the above
c. To switch labour from services to 9a. Type of focus group, in which two
manufacturing activities moderators intentionally take opposite sides, is
d. To discourage consumption of called:
commodities injurious to health a. Two-way focus group
2. Income tax is based on the principle of b. Dual moderator focus group
a. Benefit c. Dueling moderator focus group
b. Ability to pay d. Respondent moderator focus group
c. Service 10. Time-series data may exhibit which of the
d. Cost of service following behaviours?
3. Public debt management refers to a. Trend
a. Terms of new bonds b. Random variations
b. Proportion of different components c. Seasonality
of public debt d. All of the above
c. Pattern of maturity 11. Depreciation is a process of
d. All of the above a. Valuation
4. Budget is an instrument of b. Allocation
a. Fiscal policy c. Both valuation and allocation
b. Monetary policy d. None of the above
c. Economic policy 11a. A monopoly is a market structure in which
d. Export policy a. A single firm exercises its power
5. The Laffer curve is the essence of over smaller firms
a. Rational expectation hypothesis b. A singe firm produces a product
b. Supply side economics with a wide variety of very close
c. Demand management economics substitutes
d. Classical economics c. Each firm is run by a small
6. When we say that the demand for a product proprietor
has declined, we mean that d. There is only one firm producing a
a. The demand curve has shifted to product which as no close
the right. substitutes
b. The demand curve has shifted to 12. PPC is based on an assumption
the left. a. Technology is constant
c. The price of the product has b. Resources are constant
increased. c. Full employment
d. Buyers would be willing to pay d. Under employment
more for the good if only they had 13. Joint demand is also known as
more income. a. Complementary demand
7. An improvement in production technology b. Direct demand
will c. Indirect demand
a. Tend to increase equilibrium price. d. Composite demand
b. Shift the supply curve to the left. 14. When TU is maximum, MU is
c. Shift the supply curve to the right. a. Negative
d. Shift the demand curve to the left. b. Zero
8. Costs incurred only when production occurs c. One
are known as: d. Positive
a. Explicit costs 15. For consumer equilibrium the slope of
b. Fixed costs indifference curve should equal
c. Variable costs a. Slope of income
d. Implicit costs b. Slope of price line
9. A natural monopoly is a market situation in c. Slope of demand curve
which d. Slope of supply curve
a. All firms sell natural resources 15a. Local bodies can impose tax on

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PPSC paper 1

a. Income c. Only factors less intensively used

b. Sales in the declining sector lose
c. House d. Only the most abundant factor in
d. Wealth the country loses
16. In short time period which of the following 23. Construction of a dam may reduce river
input is a variable? flow, causing an increase in the cost of
a. Land dredging of the dam site is an example of
b. Labour __________
c. Technology a. Direct cost
d. Capital b. Indirect cost
17. Which cost curve is known as envelope c. Tangible cost
curve? d. Intangible cost
a. TC 24. Nations output minus the capital used to
b. MC obtain is called as
c. STC a. GDP
d. LAC b. GNP
18. Price of perishable goods is influenced by c. NDP
a. Demand d. NNP
b. Supply 25. If Govt. spending (G) is less than tax
c. Technology revenue (T) then the budget will be
d. Population a. Surplus
19. Under dumping a commodity is sold at b. Deficit
which price in a foreign market? c. Balanced
a. Lower d. None of the above
b. Higher 26. National Income cannot be measured by:
c. Equal a. Production Method
d. Not equal b. Expenditure Method
19a. Who classified public expenditure on the c. GDP Deflator
basis of functions? d. Income Method
a. Pigou 27. The long-run growth model
b. Nicholson a. Analyzes the adjustment process
c. Adam Smith the economy experiences
d. Dalton aftershocks.
20. Inflation has which kind of relationship with b. Is based on sticky prices
value of money? c. Analyze the economy after
a. Positive complete adjustment has occurred
b. Negative in response to any disturbance
c. Neutral d. Clearly demonstrates the usefulness
d. No of fiscal and monetary policy in
21. Factor-intensity reversal refers to the situation fighting recessions
where 28. The vicious circle argument points out the
a. Both commodities are more L- connection between
intensive in one nation than in the a. Income and population
other nation b. Investment and technology
b. One commodity is the L-intensive c. Productivity and income
commodity in one nation and the d. Savings and capital
K-intensive commodity in other 29. The demand for money
nation. a. Varies positively with the interest
c. The same commodity is more L- rate
intensive in one nation than in the b. Varies positively with GDP
other nation c. Varies negatively with the price
d. Any of the above level
22. After trade opens up, in the short-run: d. Varies positively with the Dow-
a. All groups tied to the declining Jones stock price index
sectors lose
b. Only factors more intensively used
30. 
If ˆ  4.6 and S .E ˆ  2.3 , then the
in the declining sector lose value of t-statistic will be:

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PPSC paper 1

a. 1.0 d. Below equilibrium with the result

b. 2.0 that quantity supplied exceeds
c. 3.0 quantity demanded
d. None of the above 38. Which of the following is irrelevant for
31. If two nations have the same opportunity rational decision making?
costs for two goods, then it must be the case a. Average variable cost (AVC)
that b. Average fixed cost (AFC)
a. Neither has an absolute advantage c. Marginal cost (MC)
in either good d. Total variable cost (TVC)
b. One nation will have a comparative 38a. When demand and supply decrease equally,
advantage in one of the good there will be no change in what?
c. Trade can occur at the right terms a. Demand
of trade b. Supply
d. Neither nation has a comparative c. Quantity
advantage in either good d. Price
32. Curriculum organization used for different
concepts at the same class is called 38a. The basis of corporate tax is
a. Vertical e. Total turnover of the company
b. Horizontal f. Profit after distribution of dividend
c. Logical g. Profit before distribution of
d. None dividend
33. In Rostow’s theory, the drive to maturity h. All of the above
a. Starts the development process
b. Completes the development 39. Positive cross elasticity is found in case of
process a. Complementary goods
c. Comes before the take-off b. Substitute goods
d. Follows the take-off c. Related goods
34. The most important component of lesson d. Unrelated goods
plan is 40. When the total product is maximum, then
a. Curriculum evaluation marginal product is
b. Objectives a. One
c. I.Q b. Minimum
d. Educational institution c. Maximum
35. Which one of the following is not the d. Zero
characteristics of tax? 40a. That part of consumption which depends
a. Direct quid pro quo upon the level of income is called as
b. Compulsory payment a. Autonomous Consumption
c. Reciprocal benefits b. Induced Consumption
d. Punishment to tax evader c. Consumption Function
36. A progressive tax aims at d. None of the above
a. Increased domestic production
b. Distribution of sacrifice is a more 41. Product differentiation is the main feature of
just manner which market?
c. Economic progress of the society a. Imperfect market
d. Harmony in tax system b. Monopoly market
37. A surplus of a product will arise when price c. Perfect market
is d. Duopoly
a. Above equilibrium with the result 42. Real balance effects is also known as
that quantity demanded exceeds a. Output effect
quantity supplied. b. Pigou effect
b. Above equilibrium with the result c. Demonstration effect
that quantity supplied exceeds d. Ratchet effect
quantity demanded. 43. The Stolper-Samuelson theorem postulates
c. Below equilibrium with the result that the imposition of a tariff by a nation
that quantity demanded exceeds causes the real income of the nation’s
quantity supplied a. Scarce factor to rise
b. Scarce factor to fall

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PPSC paper 1

c. Abundant factor to rise a. Exploratory Research

d. Scarce and abundant factors to rise b. Descriptive Research
44. For Heckscher and Ohlin, the most c. Diagnostic Research
important cause of the difference in relative d. Fundamental Research
commodity prices and trade between 50b. Demand reflects the quantity that consumers
nations is difference in a. Want at alternative prices
a. Factor endowments b. Need at alternative prices
b. Technology c. Are willing and able to buy at
c. tastes alternative prices
d. demand conditions d. Can buy at alternative prices
44a. Subject centered designs revolve around? 50c. Cyclical unemployment is unemployment
a. Ideas associated with:
b. Psychological foundation a. Changes in the composition of
c. Society aggregate spending
d. Content b. Changes in technology or its usage
45. A straight line production possibilities curve c. Changes in the level of aggregate
refers to spending
a. Constant costs d. Inflation
b. Increasing costs 50d. Which of the following would not be
c. Decreasing costs associated with cost-push inflation?
d. Any of the above a. The market power of businesses
46. A method, similar to group interviews, used b. Additions to aggregate spending
to generate data is called: c. Union power
a. Basic Research d. Oil price rises
b. Focus Group 50e. Assume that the marginal propensity to
c. Diagnostic Research consume is 0.8 in a private closed economy.
d. Fundamental Research The multiplier in this economy would be:
47. A method to gain knowledge by experience a. 4
or observation is called: b. 5
a. Historical research c. 0.2
b. Empirical research d. 1.25
c. Diagnostic research 50f. The aggregate demand curve shows the
d. Descriptive research relationship between the
48. If equilibrium income is less than full a. Price level and real domestic output
employment income level then the economy produced
is facing: b. Price level and real domestic output
a. inflationary gap purchased
b. recessionary gap c. Price level that producers are
c. deficit in budget willing to accept
d. balanced budget d. Real output purchased and
49. Unemployment rate is defined as produced
a. Total number of unemployed 50g. As a medium of exchange, money:
divided by total population a. Provides a relative measure of
b. Total number of unemployed worth of heterogeneous goods
divided by labour force b. Must have some valuable
c. Labour force divided by total commodity backing it to give it its
population value
d. Population minus labour force c. Is useable to purchase goods and
50. That output which an economy is capable of services
producing by utilizing all of its resources d. Encourages to use of barter
fully is called as: 50h. The total quantity of money demanded is:
a. Actual Output a. Directly related to nominal GDP and
b. Equilibrium Output the rate of interest
c. Potential Output b. Directed related to nominal GDP and
d. Output Gap directed related to the rate of interest
50a. Research that is conducted to explore new c. Inversely related to nominal GDP and
idea or topic is called directly related to the rate of interest

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PPSC paper 1

d. Inversely related to nominal GDP and c. Interest rates to rise, investment

the rate of interest spending to fall, and aggregate
50i. According to the classical theory of demand to fall
employment, a fall in the rate of interest will: d. Interest rates to fall, investment
a. Reduce saving and investment spending to fall, and aggregate
b. Increase saving and reduce investment demand to fall
c. Increase saving and investment 52. Factor-intensity reversal refers to the
d. Reduce saving and increase investment situation where
50j. Monetarists believe that a reduction in the a. Both commodities are more L-
supply of money will: intensive in one nation than in the
a. Reduce the rate of interest other nation
b. Increase nominal income b. One commodity is the L-intensive
c. Reduce the level of nominal GDP commodity in one nation and the
d. Increase the price level K-intensive commodity in other
50k. Monetary policy operates by influencing: nation
a. Interest rates and credit availability c. The same commodity is more L-
b. The money supply so as to alter interest intensive in one nation than in the
rates other nation
c. Interest rates so as to alter the supply of d. Any of the above
money 53. Ricardo predicted the economy would end in
d. Directly the cost of credit a stationary state because
50L. In the long run, demand pull forces will: a. People would tire of working
a. Decrease the unemployment rate b. The economy would run out of
b. Decrease the level of nominal wages gold
c. Increase the level of prices c. Innovation would dry up
d. Increase real national output d. The economy would run out of
50M. Economic growth brings benefits to a arable land
society because: 54. Teacher training is less emphasized in
a. The population enjoys a greater nominal a. Subject centered curriculum
income b. Learner centered curriculum
b. The standard of living increases c. Activity centered curriculum
c. The burden of scarcity is removed d. None
d. Growth eliminates an economy’s 55. Detailed contents of the subjects for a class
production constraints are called?
50N. Which of the following is not a supply factor a. Course
in economic growth? b. Behavior
a. An expansion in consumer spending c. Design
b. An increase in the number and quality d. Logical sequence
of productive inputs
c. An improvement in the quality of 55a. Coase theorem is concerned with
natural resources a. Externalities
d. More advanced technology b. Social justice
50O. If exchange rates float freely, the exchange c. Equity
rate for any currency is determined by: d. Efficiency
a. The demand for it
b. The supply of it 56. If the demand is perfectly elastic, the
c. The demand for and the supply of it incidence of sales tax will be
d. The official reserves that ‘back’ it a. Only on seller
51. An increase in the money supply causes; b. Only on buyer
a. Interest rates to fall, investment c. More on seller than buyer
spending to rise, and aggregate d. More on buyer than seller
demand to rise 57. The deficit budget in which the deficits are
b. Interest rates to rise, investment covered through taxes is called
spending to rise, and aggregate a. Balanced budget
demand to rise b. Unbalanced budget
c. Surplus budget
d. Zero-based budget

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PPSC paper 1

58. The balanced budget theorem states that the d. None

balanced budget multiplier is always
a. Less than zero 65a. Public good is characterized by
b. Greater than zero a. Rivalness
c. Equal to unity b. Non-excludability
d. Infinity c. Contestability
59. Which of the following in not the d. All of the above
consequence of black money?
a. Economic stability 66. Under which model each seller assumes that
b. Loss of revenue to the government his rival’s price remains constant?
c. Lavish consumption spending a. Cournot
d. Distortion of production pattern b. Bertrand
59a. An increase in product price will cause c. Edgeworth
a. Quantity demanded to decrease d. Sweezy
b. Quantity supplied to decrease 67. According to classical economists if there is
c. Quantity demanded to increase unemployment in an economy that is of
d. The supply curve to shift to the which type?
right a. Temporary
60. The total product curve may initially show b. Permanent
output increasing at an increasing rate as c. Variable
more labour is hired because of the: d. Rare
a. Declining quality of the labour 68. Relative income hypothesis was propounded
force. by whom?
b. Principle of comparative advantage a. Pigou
c. Law of diminishing marginal b. Bertrand
returns c. Duesenberry
d. Increase in marginal physical d. Sweezy
product 69. Which of the following must be true if a large
61. Present value is nation imposes a tariff on an imported good?
a. The value now of a future amount a. The price received by domestic
b. The amount that must be invested producers will fall
now to produce a known future b. The price received by foreign
value producers will fall
c. Always smaller than the future c. Domestic consumers will gain
value d. The nation will gain
d. All of the above 70. The imposition of an import tariff by a nation
62. One purpose of short range forecasts is to will increase the nation’s welfare
determine a. Always
a. Production planning b. Never
b. Inventory budgets c. Sometimes
c. Facility location d. None of the above
d. Job assignments 71. The opportunity cost theory assumes that
63. In case of cross elasticity demand for one a. Labour is the only factor of
good depends on production
a. The price of other good b. The price or cost of a commodity
b. The demand for other good can be inferred from its labour
c. The price of same good content
d. The price of demand for other good c. Labour is homogeneous
64. Excess capacity is found in which market? d. None of the above
a. Perfect competition 72. Research that is conducted to expand
b. Monopolistic competition knowledge of the researcher is called:
c. Monopoly a. Action Research
d. None b. Conceptual Research
65. Explanatory methods are used in c. Basic Research
a. Subject centered curriculum d. Diagnostic Research
b. Learner centered curriculum 73. A problem that motivates the researcher to
c. Activity centered curriculum carry out research study is called:

6
PPSC paper 1
a. Research Hypotheses
b. Research Problem
c. Research Technique
d. Research Method
74. If government spending increases, the
aggregate demand (AD) curve will
a. shift to the rightward
b. shift to the leftward
c. remain constant
d. None of the Above
75. Difference between Disposable Income and
Consumption is:
a. Savings
b. Consumption
c. Investment
d. Net Income
76. In his theory of development, Schumpeter
stressed
a. The need for balanced growth
b. The need for infrastructure
c. The role of innovation
d. The exploitation of the indigenous
people
76a. The H-O theory postulates that as a result of
trade , the difference in factor price between
nations
a. Diminishes
b. Increases
c. Remain unchanged
d. Any of the above is possible.
77. An aggregate supply schedule drawn to be
consistent with completely flexible prices
would
a. Be horizontal at some price level
determined by aggregate demand
b. Be horizontal at some price level
determined by interest rates and
government policy.
c. Be vertical above an arbitrary level
of GDP
d. Be vertical above a level of GDP
determined by the capital stock,
availability of labour, and
technology embodied in production
across the economy
78. In long-run, increases in the money supply
will
a. Increase GDP by increasing
investment
b. Increase inflation
c. Decrease GDP by reducing the real
wage and thus labour supply
d. Increase the real wage
79. The lump-sum capital argument sees the
primary cause of underdevelopment as
a. The small size of the market
b. The lack of savings
c. The low level of technology
d. Foreign landlords
80. The selection of the particular design is
influenced by
a. Types of Education
b. Elements of Education
c. Foundation of Education
d. Principle of Education
81. If tax yields a meagre revenue to the
government, it violates the canon of
a. Elasticity
b. Flexibility
c. Productivity
d. Certainty
82. Equity in taxation can best be achieved by
applying the principle of
a. Equal absolute sacrifice
b. Benefit
c. Equal marginal sacrifice
d. Equal proportional sacrifice
82a. When the price of a product rises,
consumers shift their purchases to other
products whose prices are now relatively
lower. “This statement describes
a. An inferior good
b. The substitution effect
c. The law of supply
d. The income effect
83. The demand for a product is said to be
inelastic with respect to price if
a. Consumers are largely
unresponsive to a per unit price
change
b. The elasticity coefficient is greater
than 1
c. A drop in price is accompanied by
a decrease in the quantity
demanded
d. A drop in price is accompanied by
an increase in the quantity
demanded.
84. A monopolist will maximize profits by
a. Setting his price as high as possible
b. Setting his price at the level that
will maximize per unit profit
c. Producing the output where
marginal revenue equals marginal
cost and charging a price along the
demand curve
d. Producing the output where price
equals marginal cost
85. Productivity can be improved by
a. Increasing inputs while holding
outputs steady
b. Decreasing outputs while holding
inputs steady
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PPSC paper 1

c. Increasing inputs and outputs in the b. Non-Food Inflation

same proportion c. Cost-Push Inflation
d. Decreasing inputs while holding d. All of the above
outputs steady
86. In long run, under perfect competition a firm 91. Economies of scale is a term that refers to
always attains the production situation where the growth of
a. Normal profits output in relation to the increase in the use
b. Less loss of inputs is
c. More loss a. Greater
d. Super normal profits b. Less
87. Movement along supply curve refers to c. Equal
change in supply of a commodity due to d. Any of the above
change in 92. Potential GDP is a measure of
a. Price a. All the goods and services
b. Other factors produced by an economy from its
c. Tax inception to the present.
d. Subsidy b. The value of the goods and services
87a. When a nation imposes an import tariff, the that could be produced if the
nation’s offer curve will economy were operating with all of
a. Shift away from the axis measuring its people employed.
its export commodity, c. The value of the goods and services
b. Shift away from the axis measuring that could be produced if the
its import commodity economy were operating at the full
c. None tariff capacity of its capital stock with its
d. Any of the above is possible entire labour force fully employed.
d. The rate at which an economy’s
88. In which market demand is of kinked shape? GDP could grow if its rate of
a. Imperfect market investment were maximized.
b. Monopoly market 93. The economist who stressed the role of the
c. Perfect market entrepreneur in development was
d. Oligopoly market a. Hirschman
88a. According to classical economists money b. Nurske
plays which type of role in an economy? c. Rosenstein-Rodan
a. Store of value d. Scitovsky
b. Deferred payments 94. Rote learning is a demerit of
c. Medium of exchange a. Subject centered curriculum
d. Paper money b. Learner centered curriculum
c. Activity centered curriculum
89. Economies of scale is a term that refers to the d. None
production situation where the growth of output 95. Motivational research is a type of
in relation to the increase in the use of inputs is a. Basic Research
a. Greater b. Quantitative Research
b. Less c. Qualitative Research
c. Equal d. Conceptual Research
d. Any of the above
90. The research that just describes the fact 95a. The H-O theory postulates that as a result of
without providing any reason behind is trade , the difference in factor price between
called: nations
a. Diagnostic Research e. Diminishes
b. Descriptive Research f. Increases
c. Exploratory Research g. Remain unchanged
d. Qualitative Research h. Any of the above is possible
96. Which of the following statements is false?
90a. That inflation which emerges in an economy a. Consumption patterns do not matter
due to an increase in Cost of Production is for welfare gains or losses of
called as: neutral factors
a. Demand-Pull Inflation

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PPSC paper 1
b. Consumption patterns do affect the
size of the gains or losses to all
factors
c. Consumption patterns do not affect
the direction of gains or losses for
the most specialized factors
d. Consumption patterns do not matter
for the welfare gains or losses of a
nation as a whole
96a. Changes in tax revenue will not necessarily
change long-run GDP because
a. Long-run GDP is independent of
labour supply
b. Changes in government spending
typically accompany tax changes
c. Labour supply depends on average
tax rates.
d. Labour supply depends on marginal
tax rates.
97. Cost directly borne by the project is known
as
a. Primary cost
b. Secondary cost
c. Sunk cost
d. Tangible cost
98. Which of the following is a true statement
about opportunity costs?
a. The opportunity cost of an activity
includes the expected benefit of the
most attractive alternative passed
up
b. Opportunity cost implies that
people are always pleased with the
decisions they make
c. Opportunity cost is an objective
notion
d. When making choices, people
exhaustively calculate costs and
benefits fo all possible alternatives
99. Which type of trade is not explained by the
Heckscher-Oholin trade model?
a. Intra-industry trade
b. Trade based on economies of scales
c. Trade based on imitation gaps and
product cycles
d. All of the above
100. Sociological foundations are concerned with?
a. Ideas
b. Psychological foundation
c. Society
d. Content
100a. According to classical theory of
employment, full employment is a normal
feature of which economy?
a. Mixed
b. Capitalist
c. Open
d. Socialistic
100b. The aggregate demand curve slopes
downwards as a result of:
a. The interest rate effect
b. The real balances effect
c. The foreign purchases effect
d. All of the above
100c. Floating exchange rates:
a. Tend to correct balance of
payments imbalances
b. Reduce the uncertainties and risks
associated with international trade
c. Increase the world’s need for
international monetary reserves
d. Tend to expand the volume of
world trade
100d. Current deposits are money because they
are:
a. Legal tender
b. Fiat money
c. Token money
d. A medium of exchange
100e. When the Reserve Bank engages in open
market operations so as to reduce the cash
rate it is:
a. Easing monetary policy and attempting
to lower interest rates
b. Easing monetary policy and directly
providing additional credit in the
economy
c. Tightening monetary policy and
attempting to lower interest rates
d. Easing monetary policy by altering
money growth rates
100f. Which of the following would not be
classified as saving?
a. Payments for superannuation
b. Undistributed profits
c. Moneys that are put away for
precautionary purposes
d. Distributed profits
101. The complete, plan, structure and strategy,
within which a research is conducted is
called:
a. Research Design
b. Research Problem
c. Research Methods
d. Research Hypotheses
102. For an efficient quanity of any good to be
produced
a. Marginal benefit must fall short of
marginal cost to avoid over-
production of the good
b. Marginal benefit must exceed
marginal cost, otherwise the good
isn’t worth producing
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PPSC paper 1

c. Marginal benefit must diminish at a c. A single firm can supply the market
slower rate than marginal cost output more efficiently than many
d. Marginal benefit must equal firms
marginal cost on the last unit d. None of the above
produced 111. Type of focus group, in which two
PPSC PAPER 2 moderators intentionally take opposite sides,
is called:
103. Income tax is based on the principle of a. Two-way focus group
a. Benefit b. Dual moderator focus group
b. Ability to pay c. Dueling moderator focus group
c. Service d. Respondent moderator focus group
d. Cost of service 112. Time-series data may exhibit which of the
104. Public debt management refers to following behaviours?
a. Terms of new bonds a. Trend
b. Proportion of different components b. Random variations
of public debt c. Seasonality
c. Pattern of maturity d. All of the above
d. All of the above 113. A monopoly is a market structure in which
105. Budget is an instrument of a. A single firm exercises its power
a. Fiscal policy over smaller firms
b. Monetary policy b. A singe firm produces a product
c. Economic policy with a wide variety of very close
d. Export policy substitutes
106. The Laffer curve is the essence of c. Each firm is run by a small
a. Rational expectation hypothesis proprietor
b. Supply side economics d. There is only one firm producing a
c. Demand management economics product which has no close
d. Classical economics substitutes
107. When we say that the demand for a product 114. Depreciation is a process of
has declined, we mean that a. Valuation
a. The demand curve has shifted to b. Allocation
the right. c. Both valuation and allocation
b. The demand curve has shifted to d. None of the above
the left. 115. Production possibility curve is based on an
c. The price of the product has assumption
increased. a. Technology is constant
d. The demand curve will remain the b. Resources are constant
same. c. Full employment
108. An improvement in production technology d. Under employment
will 116. Joint demand is also known as
a. Tend to increase equilibrium price. a. Complementary demand
b. Shift the supply curve to the left. b. Direct demand
c. Shift the supply curve to the right. c. Indirect demand
d. Shift the demand curve to the left. d. Composite demand
109. Costs incurred only when production occurs 117. Local bodies can impose tax on
are known as: a. Income
a. Explicit costs b. Sales
b. Fixed costs c. House
c. Variable costs d. Wealth
d. Implicit costs 118. When total utility is maximum, marginal
110. A natural monopoly is a market situation in utility is
which a. Negative
a. All firms sell natural resources b. Zero
b. A single firm supplies natural c. One
resources to an entire industry d. Positive
119. For consumer equilibrium the slope of
indifference curve should equal

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PPSC paper 1

a. Slope of income b. Is based on sticky prices

b. Slope of budget line c. Analyzes the economy after
c. Slope of demand curve complete adjustment has occurred
d. Slope of supply curve in response to any disturbance
120. Who classified public expenditure on the d. Clearly demonstrates the usefulness
basis of functions? of fiscal and monetary policy in
a. Pigou fighting recessions
b. Nicholson 129. The vicious circle of poverty argument
c. Adam Smith points out the connection between
d. Dalton a. Income and population
121. Which cost curve is known as envelope b. Investment and technology
curve? c. Productivity and income
a. Total cost d. Savings and capital
b. Marginal cost 130. The demand for money
c. Short run total cost a. Varies positively with the interest
d. Long run total cost rate
122. Under dumping a commodity is sold at b. Varies positively with GDP
which price in a foreign market? c. Varies negatively with the price
a. Lower level
b. Higher d. Varies positively with the Dow-
c. Equal Jones stock price index

123.
d. Not equal
Inflation has which kind of relationship with
131. 
If ˆ  2.4 and S .E ˆ  1.2 , then the
value of money? value of t-statistic will be:
a. Positive a. 1.0
b. Negative b. 2.0
c. Neutral c. 3.0
d. No d. None of the above
124. Construction of a dam may reduce river 132. If two nations have the same opportunity
flow, causing an increase in the cost of costs for two goods, then it must be the case
dredging of the dam site is an example of that
__________ a. Neither has an absolute advantage
a. Direct cost in either good
b. Indirect cost b. One nation will have a comparative
c. Tangible cost advantage in one of the good
d. Intangible cost c. Trade can occur at the right terms
125. Nations output minus the capital used to of trade
obtain is called as d. Neither nation has a comparative
a. GDP advantage in either good
b. GNP 133. Curriculum organization used for different
c. NDP concepts at the same class is called
d. NNP a. Vertical
126. If Govt. spending (G) is less than tax b. Horizontal
revenue (T) then the budget will be c. Logical
a. Surplus d. None
b. Deficit 134. In Rostow’s theory, the drive to maturity
c. Balanced a. Starts the development process
d. None of the above b. Completes the development
127. National Income cannot be measured by: process
a. Production Method c. Comes before the take-off
b. Expenditure Method d. Follows the take-off
c. GDP Deflator 135. The most important component of lesson
d. Income Method plan is
128. The long-run growth model a. Curriculum evaluation
a. Analyzes the adjustment process b. Objectives
the economy experiences c. I.Q
aftershocks. d. Educational institution

11
PPSC paper 1

136. When demand and supply decrease equally, b. Minimum

there will be no change in
a. Demand
b. Supply
c. Quantity
d. Price
137. The basis of corporate tax is
a. Total turnover of the company
b. Profit after distribution of dividend
c. Profit before distribution of
dividend
d. None of the above
138. That part of consumption which depends
upon the level of income is called as
a. Autonomous Consumption
b. Induced Consumption
c. Consumption Function
d. Marginal propensity to consume
139. Which one of the following is not the
characteristics of tax?
a. Direct quid pro quo
b. Compulsory payment
c. Reciprocal benefits
d. Punishment to tax evader
140. A surplus of a product will arise when price
is
a. Above equilibrium with the result
that quantity demanded exceeds
quantity supplied.
b. Above equilibrium with the result
that quantity supplied exceeds
quantity demanded.
c. Below equilibrium with the result
that quantity demanded exceeds
quantity supplied
d. Below equilibrium with the result
that quantity supplied exceeds
quantity demanded
141. Subject centered designs revolve around
a. Ideas
b. Psychological foundation
c. Society
d. Content
142. Which of the following is irrelevant for
rational decision making?
a. Average variable cost (AVC)
b. Average fixed cost (AFC)
c. Marginal cost (MC)
d. Total variable cost (TVC)
143. Positive cross elasticity is found in case of
a. Complementary goods
b. Substitute goods
c. Related goods
d. Unrelated goods
144. When the total product is maximum, then
marginal product is
a. One
c. Maximum
d. Zero
145. Product differentiation is the main feature of
which market?
a. Imperfect market
b. Monopoly market
c. Perfect market
d. Duopoly
146. Real balance effect is also known as
a. Output effect
b. Pigou effect
c. Demonstration effect
d. Ratchet effect
51. Research that is conducted to explore new
idea or topic is called
e. Exploratory Research
f. Descriptive Research
g. Diagnostic Research
h. Fundamental Research
52. Cyclical unemployment is that
unemployment which is associated with
e. Changes in the composition of
aggregate spending
f. Changes in technology or its usage
g. Changes in the level of aggregate
spending
h. Change in prices
53. Which of the following would not be
associated with cost-push inflation?
e. The market power of businesses
f. Additions to aggregate spending
g. Union power
h. Increase in oil prices
54. Assume that the marginal propensity to
consume is 0.8 in a private closed economy.
The multiplier in this economy would be:
e. 4
f. 5
g. 0.2
h. 1.25
55. The aggregate demand curve shows the
relationship between the
e. Price level and real domestic output
produced
f. Price level and real domestic output
purchased
g. Price level that producers are
willing to accept
h. Real output purchased and
produced
56. As a medium of exchange, money:
e. Provides a relative measure of
worth of heterogeneous goods
f. Must have some valuable
commodity backing it to give it its
value

12
PPSC paper 1
g. Is useable to purchase goods and
services
h. Encourages to use of barter
57. The total quantity of money demanded is:
e. Directly related to nominal GDP
and the rate of interest
f. Directly related to nominal GDP
and inversely related to the rate of
interest
g. Inversely related to nominal GDP
and directly related to the rate of
interest
h. Inversely related to nominal GDP
and the rate of interest
58. According to the classical theory of
employment, a fall in the rate of interest
will:
e. Reduce saving and investment
f. Increase saving and reduce
investment
g. Increase saving and investment
h. Reduce saving and increase
investment
59. Monetarists believe that a reduction in the
supply of money will:
e. Reduce the rate of interest
f. Increase nominal income
g. Reduce the level of nominal GDP
h. Increase the price level
60. Monetary policy operates by influencing:
e. Interest rates and credit availability
f. The money supply so as to alter
interest rates
g. Interest rates so as to alter the
supply of money
h. Directly the cost of credit
61. In the long run, demand pull forces will:
e. Decrease the unemployment rate
f. Decrease the level of nominal
wages
g. Increase the level of prices
h. Increase real national output
62. Economic growth brings benefits to a
society because:
e. The population enjoys a greater
nominal income
f. The standard of living increases
g. The burden of scarcity is removed
h. Growth eliminates an economy’s
production constraints
63. Which of the following is not a supply factor
in economic growth?
e. An expansion in consumer
spending
f. An increase in the number and
quality of productive inputs
g. An improvement in the quality of
natural resources
h. More advanced technology
64. If exchange rates float freely, the exchange
rate for any currency is determined by:
e. The demand for it
f. The supply of it
g. The demand for and the supply of it
h. The official reserves that ‘back’ it
66. The Stolper-Samuelson theorem postulates
that the imposition of a tariff by a nation
causes the real income of the nation’s
a. Scarce factor to rise
b. Scarce factor to fall
c. Abundant factor to rise
d. Scarce and abundant factors to rise
67. For Heckscher and Ohlin, the most
important cause of the difference in relative
commodity prices and trade between
nations is difference in
a. Factor endowments
b. Technology
c. tastes
d. demand conditions
68. A straight line production possibilities curve
refers to
a. Constant costs
b. Increasing costs
c. Decreasing costs
d. Any of the above
69. A method, similar to group interviews, used
to generate data is called:
a. Basic Research
b. Focus Group
c. Diagnostic Research
d. Fundamental Research
70. A method to gain knowledge by experience
or observation is called:
a. Historical research
b. Empirical research
c. Diagnostic research
d. Descriptive research
71. If equilibrium income is less than full
employment income level then the economy
is facing:
a. inflationary gap
b. recessionary gap
c. deficit in budget
d. balanced budget
72. Unemployment rate is defined as
a. Total number of unemployed
divided by total population
b. Total number of unemployed
divided by labour force
c. Labour force divided by total
population
d. Population minus labour force
13
PPSC paper 1

73. That output which an economy is capable of 81. The balanced budget theorem states that the
producing by utilizing all of its resources balanced budget multiplier is always
fully is called as: a. Less than zero
a. Actual Output b. Greater than zero
b. Equilibrium Output c. Equal to unity
c. Potential Output d. Infinity
d. Output Gap 82. Which of the following in not the
74. An increase in the money supply causes; consequence of black money?
a. Interest rates to fall, investment a. Economic stability
spending to rise, and aggregate b. Loss of revenue to the government
demand to rise c. Lavish consumption spending
b. Interest rates to rise, investment d. Distortion of production pattern
spending to rise, and aggregate 83. An increase in product price will cause
demand to rise a. Quantity demanded to decrease
c. Interest rates to rise, investment b. Quantity supplied to decrease
spending to fall, and aggregate c. Quantity demanded to increase
demand to fall d. The supply curve to shift to the
d. Interest rates to fall, investment right
spending to fall, and aggregate 84. The total product curve may initially show
demand to fall output increasing at an increasing rate as
75. Ricardo predicted the economy would end in more labour is hired because of the:
a stationary state because a. Declining quality of the labour
a. People would tire of working force.
b. The economy would run out of b. Principle of comparative advantage
gold c. Law of diminishing marginal
c. Innovation would dry up returns
d. The economy would run out of d. Increase in marginal physical
arable land product
76. Teacher training is less emphasized in 85. Present value is
a. Subject centered curriculum a. The value now of a future amount
b. Learner centered curriculum b. The amount that must be invested
c. Activity centered curriculum now to produce a known future
d. None value
77. Detailed contents of the subjects for a class c. Always smaller than the future
are called? value
a. Course d. All of the above
b. Behavior 86. One purpose of short range forecasts is to
c. Design determine
d. Logical sequence a. Production planning
78. Coase theorem is concerned with b. Inventory budgets
a. Externalities c. Facility location
b. Social justice d. Job assignments
c. Equity 87. The cross elasticity of demand for one good
d. Efficiency depends on
79. If the demand is perfectly elastic, the a. The price of other good
incidence of sales tax will be b. The demand for other good
a. Only on seller c. The price of same good
b. Only on buyer d. Income of the consumer
c. More on seller than buyer 88. Excess capacity is found in which market?
d. More on buyer than seller a. Perfect competition
80. The deficit budget in which the deficits are b. Monopolistic competition
covered through taxes is called c. Monopoly
a. Balanced budget d. None
b. Unbalanced budget 89. Explanatory methods are used in
c. Surplus budget a. Subject centered curriculum
d. Zero-based budget b. Learner centered curriculum
c. Activity centered curriculum

14
PPSC paper 1

d. None c. Research Technique

90. Public good is characterized by d. Research Method
a. Rivalness 99. If government spending increases, the
b. Non-excludability aggregate demand (AD) curve will
c. Contestability a. shift to the right
d. All of the above b. shift to the left
91. Under which model each seller assumes that c. remain constant
his rival’s price remains constant? d. None of the Above
a. Cournot 100. Difference between Disposable Income and
b. Bertrand Consumption is:
c. Edgeworth a. Savings
d. Sweezy b. Consumption
92. According to classical economists if there is c. Investment
unemployment in an economy that may be d. Net Income
a. Temporary 101. In his theory of development, Schumpeter
b. Permanent stressed
c. Variable a. The need for balanced growth
d. Rare b. The need for infrastructure
93. Relative income hypothesis was propounded c. The role of innovation
by whom? d. The exploitation of the indigenous
a. Pigou people
b. Bertrand 102. An aggregate supply schedule drawn to be
c. Duesenberry consistent with completely flexible prices
d. Sweezy would be
94. Which of the following must be true if a a. horizontal at some price level
large nation imposes a tariff on an imported determined by aggregate demand
good? b. horizontal at some price level
a. The price received by domestic determined by interest rates and
producers will fall government policy.
b. The price received by foreign c. vertical above an arbitrary level of
producers will fall GDP
c. Domestic consumers will gain d. vertical above a level of GDP
d. The nation will gain determined by the capital stock,
95. The imposition of an import tariff by a availability of labour, and
nation will increase the nation’s welfare technology embodied in production
a. Always across the economy
b. Never 103. In long-run, increases in the money supply
c. Sometimes will
d. None of the above a. Increase GDP by increasing
96. The opportunity cost theory assumes that investment
a. Labour is the only factor of b. Increase inflation
production c. Decrease GDP by reducing the real
b. The price or cost of a commodity wage and thus labour supply
can be inferred from its labour d. Increase the real wage
content 104. The lump-sum capital argument sees the
c. Labour is homogeneous primary cause of underdevelopment as
d. None of the above a. The small size of the market
97. Research that is conducted to expand b. The lack of savings
knowledge of the researcher is called: c. The low level of technology
a. Action Research d. Foreign landlords
b. Conceptual Research 105. The selection of the particular design is
c. Basic Research influenced by
d. Diagnostic Research a. Types of Education
98. A problem that motivates the researcher to b. Elements of Education
carry out research study is called: c. Foundation of Education
a. Research Hypothesis d. Principle of Education
b. Research Problem

15
PPSC paper 1
106. If tax yields a meagre revenue to the
government, it violates the canon of
a. Elasticity
b. Flexibility
c. Productivity
d. Certainty
107. Equity in taxation can best be achieved by
applying the principle of
a. Equal absolute sacrifice
b. Benefit
c. Equal marginal sacrifice
d. Equal proportional sacrifice
108. The demand for a product is said to be
inelastic with respect to price if
a. Consumers are largely
unresponsive to a per unit price
change
b. The elasticity coefficient is greater
than 1
c. A drop in price is accompanied by
a decrease in the quantity
demanded
d. A drop in price is accompanied by
an increase in the quantity
demanded.
109. A monopolist will maximize profits by
a. Setting his price as high as possible
b. Setting his price at the level that
will maximize per unit profit
c. Producing the output where
marginal revenue equals marginal
cost and charging a price along the
demand curve
d. Producing the output where price
equals marginal cost
110. Productivity can be improved by
a. Increasing inputs while holding
outputs steady
b. Decreasing outputs while holding
inputs steady
c. Increasing inputs and outputs in the
same proportion
d. Decreasing inputs while holding
outputs steady
111. In long run, under perfect competition a firm
always attains
a. Normal profits
b. Less loss
c. More loss
d. Super normal profits
112. Movement along supply curve refers to
change in supply of a commodity due to
change in
a. Price
b. Other factors
c. Tax
d. Subsidy
113. In which market demand curve is of kinked
shape?
a. Imperfect market
b. Monopoly market
c. Perfect market
d. Oligopoly market
114. The research that just describes the fact
without providing any reason behind is
called:
a. Diagnostic Research
b. Descriptive Research
c. Exploratory Research
d. Qualitative Research
115. Potential GDP is a measure of
a. All the goods and services
produced by an economy from its
inception to the present.
b. The value of the goods and services
that could be produced if the
economy were operating with all of
its people employed.
c. The value of the goods and services
that could be produced if the
economy were operating at the full
capacity of its capital stock with its
entire labour force fully employed.
d. The rate at which an economy’s
GDP could grow if its rate of
investment were maximized.
116. The economist who stressed the role of the
entrepreneur in development was
a. Hirschman
b. Nurske
c. Rosenstein-Rodan
d. Scitovsky
117. Rote learning is a demerit of
a. Subject centered curriculum
b. Learner centered curriculum
c. Activity centered curriculum
d. None
118. Motivational research is a type of
a. Basic Research
b. Quantitative Research
c. Qualitative Research
d. Conceptual Research
119. Cost directly borne by the project is known
as
a. Primary cost
b. Secondary cost
c. Sunk cost
d. Tangible cost
120. Which of the following is a true statement
about opportunity costs?
a. The opportunity cost of an activity
includes the expected benefit of the
most attractive alternative passed
up
16
PPSC paper 1
b. Opportunity cost implies that
people are always pleased with the
decisions they make
c. Opportunity cost is an objective
notion
d. When making choices, people
exhaustively calculate costs and
benefits fo all possible alternatives
121. Which type of trade is not explained by the
Heckscher-Oholin trade model?
a. Intra-industry trade
b. Trade based on economies of scales
c. Trade based on imitation gaps and
product cycles
d. All of the above
122. Sociological foundations are concerned with?
a. Ideas
b. Psychological foundation
c. Society
d. Content
123. The complete, plan, structure and strategy,
within which a research is conducted is
called:
a. Research Design
b. Research Problem
c. Research Methods
d. Research Hypotheses
124. For an efficient quantity of any good to be
produced
a. Marginal benefit must fall short of
marginal cost to avoid over-
production of the good
b. Marginal benefit must exceed
marginal cost, otherwise the good
isn’t worth producing
c. Marginal benefit must diminish at a
slower rate than marginal cost
d. Marginal benefit must equal
marginal cost on the last unit
produced
125. When the price of a product rises,
consumers shift their purchases to other
products whose prices are now relatively
lower. “This statement describes
a. An inferior good
b. The substitution effect
c. The law of supply
d. The income effect
126. According to classical economists money
plays which type of role in an economy?
a. Store of value
b. Deferred payments
c. Medium of exchange
d. Paper money
127. That inflation which emerges in an economy
due to an increase in Cost of Production is
called as:
a. Demand-Pull Inflation
b. Non-Food Inflation
c. Cost-Push Inflation
d. All of the above
128. The H-O theory postulates that as a result of
trade , the difference in factor price between
nations
a. Diminishes
b. Increases
c. Remain unchanged
d. Any of the above is possible
129. Changes in tax revenue will not necessarily
change long-run GDP because
a. Long-run GDP is independent of
labour supply
b. Changes in government spending
typically accompany tax changes
c. Labour supply depends on average
tax rates.
d. Labour supply depends on marginal
tax rates.
130. According to classical theory of
employment, full employment is a normal
feature of which economy?
a. Mixed
b. Capitalist
c. Open
d. Socialistic
131. The aggregate demand curve slopes
downwards as a result of:
a. The interest rate effect
b. The real balances effect
c. The foreign purchases effect
d. All of the above
132. Floating exchange rates:
a. Tend to correct balance of
payments imbalances
b. Reduce the uncertainties and risks
associated with international trade
c. Increase the world’s need for
international monetary reserves
d. Tend to expand the volume of
world trade
133. Current deposits are money because they
are:
a. Legal tender
b. Fiat money
c. Token money
d. A medium of exchange
134. When the Central Bank engages in open
market operations so as to reduce the cash
rate it is:
a. Easing monetary policy and
attempting to lower interest rates
b. Easing monetary policy and
directly providing additional credit
in the economy
17
PPSC paper 1
c. Tightening monetary policy and
attempting to lower interest rates
d. Easing monetary policy by altering
money growth rates
135. Which of the following would not be
classified as saving?
a. Payments for superannuation
b. Undistributed profits
c. Moneys that are put away for
precautionary purposes
d. Distributed profits
136. Investment is:
a. The purchase of stocks and bonds
b. The purchase of capital equipment
and structures
c. When we place our saving in the
bank
d. The purchase of goods and services
137. Which of the following sets of government
policies is the most growth-oriented?
a. Lower taxes on the returns to
savings, provide investment tax
credits and lower the deficit
b. Lower taxes on the returns to
savings, provide investment tax
credits and increase the deficit
c. Increase taxes on the returns to
savings, provide investment tax
credits and lower the deficit
d. Increase taxes on the returns to
savings, provide investment tax
credits and increase the deficit
138. If the government increases investment tax
credits and reduce taxes on the return to
saving at the same time:
a. The real interest rate should rise
b. The real interest rate should fall
c. The real interest rate should not
change
d. The impact on the real interest rate
is indeterminate
139. An increase in the budget surplus
a. Shifts the demand for loanable
funds to the right and increases the
real interest rate
b. Shift the demand for loanable funds
to the left and reduces the real
interest rate
c. Shifts the supply of loanable funds
to the left and increases the real
interest rate
d. Shifts the supply of loanable funds
to the right and reduces the real
interest rate.
140. Inflation can be measured by all of the
following except the:
a. GDP deflator
b. Consumer price index
c. Producer price index
d. Finished goods price index
141. Which of the following statement is correct?
a. The real interest rate is the sum of
the nominal interest rate and the
inflation rate
b. The real interest rate is the nominal
interest rate minus the inflation rate
c. The nominal interest rate is the
inflation rate minus the real interest
rate
d. The nominal interest rate is the real
interest rate minus the inflation rate
142. If borrowers and lenders agree on a nominal
interest rate and inflation turns out to be less
than they expected:
a. Borrowers will gain at the expense
of lenders
b. Lenders will gain at the expense of
borrowers
c. Neither borrowers nor lenders will
gain because the nominal interest
rate has been fixed by contract
d. None of the above
143. Copper is an example of
a. Human capital
b. Physical capital
c. A renewable natural resource
d. A non-renewable natural resource
144. To increase growth, government should do
all of the following except:
a. Encourage saving and investment
b. Encourage foreigners to investment
in their country
c. Encourage research and
development
d. Nationalize major industries
145. If a nation has an absolute advantage in the
production of a good:
a. It can produce that good at a lower
opportunity cost than its trading
partner
b. It can produce that good using
fewer resources than its trading
partner
c. It can benefit by restricting imports
of that good
d. It will specialize in the production
of that good and export it
146. If a nation has a comparative advantage in
the production of a good
a. It can produce that good at a lower
opportunity cost than its trading
partner
18
PPSC paper 1
b. It can produce that good using
fewer resources than its trading
partner
c. It can benefit by restricting imports
of that good
d. It must be the only country with the
ability to produce that good
147. An inferior good is a product for which
a. Quality is below average
b. Price elasticity of demand is very
low
c. Income elasticity is negative
d. Demand increases slowly as
income increases
148. Price elasticity of supply tends to be higher
a. The longer the time period
b. The more adaptable the firms can
be to changing market conditions
c. For manufactured goods than for
antiques
d. For all of the above
149. A binding price ceiling causes
a. Shortages
b. Quantity supplied greater than
quantity demanded
c. Competition among buyers, driving
price up to equilibrium
d. Excess supply
150. A tax will be split equally between buyers
and sellers when:
a. The government splits the tax
equally between buyers and sellers
b. Supply and demand are equal
c. Supply and demand have equal
elasticities
d. Supply has an infinite elasticity and
demand has a zero elasticity
151. A tax on buyers is
a. Equivalent to a tax on sellers
b. Likely to be harder on the poor
than a tax on sellers
c. Harder to shift than a tax on sellers
d. Easier to shift than a tax on sellers
152. Which of the following is an example of a
price floor?
a. Rent control
b. Minimum wage
c. Subsidized pharmaceutical drugs
d. Medicare
153. An economy that interacts with other
economies is known as:
a. An export economy
b. An import economy
c. A closed economy
d. An open economy
154. When people take advantage of differences
in prices for the same good by buying it
where it is cheap and selling it where it is
expensive, this is known as:
a. Purchasing-power parity
b. Net foreign investment
c. Arbitrage
d. Net exports
155. Which of the following would not cause a
shift in the long run aggregate supply curve?
a. An increase in the available labour
b. An increase in the available capital
c. An increase in the available
technology
d. An increase in price expectations
156. The natural rate hypothesis argues that
a. Unemployment is always above the
natural rate
b. Unemployment is always below the
natural rate
c. Unemployment is always equal to
the natural rate
d. In the long run, the unemployment
rate returns to the natural rate,
regardless of inflation
157. The discrepancy between policy
announcements and policy actions in known
as the
a. Political business cycle
b. Time inconsistency of policy
c. Discretionary effect
d. Substitution effect
158. Tax reform that encourages saving tends to:
a. Shift the tax burden towards high-
income people away from low-
income people
b. Shift the tax burden towards low-
income people away from high-
income people
c. Reduce the rate of growth of output
d. Reduce the deficit
159. Grouping of data is termed as
a. Editing
b. Coding
c. Classification
d. Tabulation
160. When there are two variables in a
population, it is called
a. Univariate population
b. Bivariate population
c. Multivariate population
d. Semivariate population
161. In which of the following, we calculate the
mean value
a. Measures of central tendency
b. Measures of dispersion
c. Measures of skewness
d. Measures of relationship
19
PPSC paper 1

162. In which of the following, we calculate the 171. The type of error occurred due to rejecting
scattering of values from the mean H0 when it is true is called
a. Measures of central tendency a. Type I error
b. Measures of dispersion b. Type II error
c. Measures of skewness c. Type III error
d. Measures of relationship d. Type IV error
163. Which of the following explains the cause 172. The type of error occurred due to accepting
and effect relationship between variables in H0 when it is false is called
a data series? a. Type I error
a. Causal analysis b. Type II error
b. Partial correlation c. Type III error
c. Multiple correlation d. Type IV error
d. Regression 173. …………..is used to conduct the
164. Correlation provides information about the quantitative study that includes objective
a. Means value variables.
b. Peakedness of the curve a. Deductive hypothesis
c. Scattering of values from the mean b. Inductive hypothesis
d. Association between the variables c. Directional hypothesis
165. Multiple correlation provides information d. Non-directional hypothesis
about the 174. The type of hypothesis that moves from
a. Mean value specific to generic is known as
b. Peakedness of the curve a. Deductive hypothesis
c. Association between more than two b. Inductive hypothesis
variables c. Directional hypothesis
d. Scattering of values around mean d. Null hypothesis
166. If the value of the upper limit is not included 175. The type of hypothesis that moves from
in the class magnitude, then it is known as generic to specific is known as
a. Frequency distribution a. Deductive hypothesis
b. Cross tabulation b. Inductive hypothesis
c. Exclusive class interval c. Directional hypothesis
d. Inclusive class interval d. Null hypothesis
167. In time series, a long term trend is known as 176. The type of hypothesis that is assumed to be
a. Secular trend true is
b. Seasonal trend a. Deductive hypothesis
c. Cyclical trend b. Inductive hypothesis
d. Irregular trend c. Directional hypothesis
168. ………… refers to the hypothesis in which d. Null hypothesis
the direction of relationship between two 177. Which one of the following tests is used
variables cannot be specified when the population is normal and finite,
a. Deductive hypothesis sample size is large, population variance is
b. Inductive hypothesis unknown, and test can be two tailed or one
c. Directional hypothesis tailed?
d. Non-directional hypothesis a. t test
169. ………….is used to conduct the qualitative b. z test
studies of subjective variables c. F test
a. Deductive hypothesis d. Chi-square test
b. Inductive hypothesis 178. ………..refers to the tests in which the
c. Directional hypothesis researcher does not make assumption about
d. Non-directional hypothesis the parameters of the population from which
170. The type of hypothesis, which says that the sample is derived
there is a relation between the variables is a. Parametric test
called b. Non-parametric test
a. Deductive hypothesis c. T test
b. Inductive hypothesis d. F test
c. Alternative hypothesis 179. ANOVA is an example of ………test of
d. Non-directional hypothesis hypothesis
a. Parametric test

20
PPSC paper 1

b. Non-parametric test c. Left side

c. T test d. Within
d. F test 189. The variation occurred in between the
180. The test used to study the relationship samples can be calculated by the formula of
between the sample and population is called ….
a. One-sample test a. SS between
b. Two-sample test b. SS within
c. Three sample test c. MS between
d. More than three sample test d. MS within
181. Which one of the following is not a 190. Two sample sign test is also called
population parameter? a. One sample sign test
a. Mean b. Two sample sign test
b. Standard deviation c. Paired sign test
c. Variance d. Paired t test
d. Binomial distribution 191. The type of tests used to study the
182. The type of tests used to study the difference correlation between the ranks of different
between the variance of two samples datasets is known as
a. T test a. Signed rank test
b. Paired test b. Rank correlation test
c. F test c. Sign test
d. Chi-square test d. Rank sum test
183. The type of tests used to study the related 192. ……………is used to find out which sample
samples is more appropriate for solving the problem
a. T test under concern
b. Paired test a. Chi-square test of goodness of fit
c. F test b. One way ANOVA
d. Chi-square test c. ANOVA
184. Which one of the following tests is used d. Chi-square test of independence
when population is normal and infinite, 193. Which of the following tests is used to find
sample size is small, and population out whether the two attributes are associated
variance is unknown? with each other or not?
a. T test a. Two Way ANOVA
b. Z test b. One Way ANOVA
c. F test c. ANOVA
d. Chi-square test d. Chi-square test of independence
185. The type of tests used to study difference 194. Which of the following type of test is used
between means in large sample size to study both the direction and magnitude of
a. T test the samples under study?
b. Z test a. Signed rank test
c. F test b. Rank sum test
d. Chi-square test c. ANOVA
186. ………….refers to the test that is used to d. Chi-square test of independence
study variances of population and sample 195. The type of decision-making model in which
a. T test the decision maker is perfectly and
b. Z test completely rational in every way
c. F test a. Rational model
d. Chi-square test b. Intuitive model
187. The only requirement to apply …….. test is c. Recognition Primed Decision-
that the population should be continuous Making Model
a. Mann Whitney test d. Ultimate model
b. Kruskal Wallis test PPSC PAPER 3
c. ANOVA
d. Chi-square test of independence
188. SS within is the variation occurred
…….….the samples 147. Which one of the following is not a purpose
a. Between of taxation?
b. Upper side

21
PPSC paper 1

a. To dissuade people from increasing c. Profit before distribution of

their income by extra work dividend
b. To raise revenue for the d. All of the above
government 157. Who classified public expenditure on the
c. To switch labour from services to basis of functions?
manufacturing activities a. Pigou
d. To discourage consumption of b. Nicholson
commodities injurious to health c. Adam Smith
148. Public good is characterized by d. Dalton
a. Rivalness 158. Public debt management refers to
b. Non-excludability a. Terms of new bonds
c. Contestability b. Proportion of different components
d. All of the above of public debt
149. Coase theorem is concerned with c. Pattern of maturity
a. Externalities d. All of the above
b. Social justice 159. The deficit budget in which the deficits are
c. Equity covered through taxes is called
d. Efficiency a. Balanced budget
150. Which one of the following is not the b. Unbalanced budget
characteristics of tax? c. Surplus budget
a. Direct quid pro quo d. Zero-based budget
b. Compulsory payment 160. Budget is an instrument of
c. Reciprocal benefits a. Fiscal policy
d. Punishment to tax evader b. Monetary policy
151. If tax yields a meagre revenue to the c. Economic policy
government, it violates the canon of d. Export policy
a. Elasticity 161. The balanced budget theorem states that the
b. Flexibility balanced budget multiplier is always
c. Productivity a. Less than zero
d. Certainty b. Greater than zero
152. Equity in taxation can best be achieved by c. Equal to unity
applying the principle of d. Infinity
a. Equal absolute sacrifice 162. The Laffer curve is the essence of
b. Benefit a. Rational expectation hypothesis
c. Equal marginal sacrifice b. Supply side economics
d. Equal proportional sacrifice c. Demand management economics
153. A progressive tax aims at d. Classical economics
a. Increased domestic production 163. Local bodies can impose tax on
b. Distribution of sacrifice is a more a. Income
just manner b. Sales
c. Economic progress of the society c. House
d. Harmony in tax system d. Wealth
154. If the demand is perfectly elastic, the 164. Which of the following in not the
incidence of sales tax will be consequence of black money?
a. Only on seller a. Economic stability
b. Only on buyer b. Loss of revenue to the government
c. More on seller than buyer c. Lavish consumption spending
d. More on buyer than seller d. Distortion of production pattern
155. Income tax is based on the principle of 165. If the demand for a product increases and
a. Benefit the supply of that product falls, then the
b. Ability to pay a. Equilibrium price falls but the
c. Service change in the equilibrium quantity
d. Cost of service is indeterminate.
156. The basis of corporate tax is
a. Total turnover of the company
b. Profit after distribution of dividend
22
PPSC paper 1
b. Equilibrium quantity falls but the
change in the equilibrium price is
indeterminate.
c. Equilibrium quantity rises but the
change in the equilibrium price is
indeterminate.
d. Equilibrium price rises but the
change in the equilibrium quantity
is indeterminate.
166. When we say that the demand for a product
has declined, we mean that
a. The demand curve has shifted to
the right.
b. The demand curve has shifted to
the left.
c. The price of the product has
increased.
d. Buyers would be willing to pay
more for the good if only they had
more income.
167. When the price of a product rises,
consumers shift their purchases to other
products whose prices are now relatively
lower. “This statement describes
a. An inferior good
b. The substitution effect
c. The law of supply
d. The income effect
168. An increase in product price will cause
a. Quantity demanded to decrease
b. Quantity supplied to decrease
c. Quantity demanded to increase
d. The supply curve to shift to the
right
169. An improvement in production technology
will
a. Tend to increase equilibrium price.
b. Shift the supply curve to the left.
c. Shift the supply curve to the right.
d. Shift the demand curve to the left.
170. A surplus of a product will arise when price
is
a. Above equilibrium with the result
that quantity demanded exceeds
quantity supplied.
b. Above equilibrium with the result
that quantity supplied exceeds
quantity demanded.
c. Below equilibrium with the result
that quantity demanded exceeds
quantity supplied
d. Below equilibrium with the result
that quantity supplied exceeds
quantity demanded
171. If the supply of product X is perfectly
elastic, an increase in the demand for it will
increase
a. Equilibrium quantity but reduce
equilibrium price.
b. Equilibrium quantity but
equilibrium price will be
unchanged
c. Equilibrium price but reduce
equilibrium quantity
d. Equilibrium price but equilibrium
quantity will be unchanged
172. For a liner demand curve
a. Elasticity is constant along the
curve
b. Elasticity is unity at every point on
the curve
c. Demand is elastic at low prices
d. Demand is inelastic at high prices
173. The demand for a product is said to be
inelastic with respect to price if
a. Consumers are largely
unresponsive to a per unit price
change
b. The elasticity coefficient is greater
than 1
c. A drop in price is accompanied by
a decrease in the quantity
demanded
d. A drop in price is accompanied by
an increase in the quantity
demanded.
174. The total product curve may initially show
output increasing at an increasing rate as
more labour is hired because of the:
a. Declining quality of the labour
force.
b. Principle of comparative advantage
c. Law of diminishing marginal
returns
d. Increase in marginal physical
product
175. Costs incurred only when production occurs
are known as:
a. Explicit costs
b. Fixed costs
c. Variable costs
d. Implicit costs
176. Which of the following is irrelevant for
rational decision making?
a. Average variable cost (AVC)
b. Average fixed cost (AFC)
c. Marginal cost (MC)
d. Total variable cost (TVC)
177. A monopoly is a market structure in which
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PPSC paper 1

a. A single firm exercises its power c. Always smaller than the future
over smaller firms value
b. A singe firm produces a product d. All of the above
with a wide variety of very close 184. Depreciation is a process of
substitutes a. Valuation
c. Each firm is run by a small b. Allocation
proprietor c. Both valuation and allocation
d. There is only one firm producing a d. None of the above
product which as no close 185. PPC is based on an assumption
substitutes a. Technology is constant
178. A natural monopoly is a market situation in b. Resources are constant
which c. Full employment
a. All firms sell natural resources d. Under employment
b. A single firm supplies natural 186. In long run, under perfect competition a firm
resources to an entire industry always attains
c. A single firm can supply the market a. Normal profits
output more efficiently than many b. Less loss
firms c. More loss
d. None of the above d. Super normal profits
179. A monopolist will maximize profits by 187. Joint demand is also known as
a. Setting his price as high as possible a. Complementary demand
b. Setting his price at the level that b. Direct demand
will maximize per unit profit c. Indirect demand
c. Producing the output where d. Composite demand
marginal revenue equals marginal 188. In case of cross elasticity demand for one
cost and charging a price along the good depends on
demand curve a. The price of other good
d. Producing the output where price b. The demand for other good
equals marginal cost c. The price of same good
180. One purpose of short range forecasts is to d. The price of demand for other good
determine 189. Positive cross elasticity is found in case of
a. Production planning a. Complementary goods
b. Inventory budgets b. Substitute goods
c. Facility location c. Related goods
d. Job assignments d. Unrelated goods
181. Time-series data may exhibit which of the 190. When TU is maximum, MU is
following behaviours? a. Negative
a. Trend b. Zero
b. Random variations c. One
c. Seasonality d. Positive
d. All of the above 191. For consumer equilibrium the slope of
182. Productivity can be improved by indifference curve should equal
a. Increasing inputs while holding a. Slope of income
outputs steady b. Slope of price line
b. Decreasing outputs while holding c. Slope of demand curve
inputs steady d. Slope of supply curve
c. Increasing inputs and outputs in the 192. Movement along supply curve refers to
same proportion change in supply of a commodity due to
d. Decreasing inputs while holding change in
outputs steady a. Price
183. Present value is b. Other factors
a. The value now of a future amount c. Tax
b. The amount that must be invested d. Subsidy
now to produce a known future 193. In short time period which of the following
value input is a variable?
a. Land
24
PPSC paper 1

b. Labour a. Cournot
c. Technology b. Bertrand
d. Capital c. Edgeworth
194. When the total product is maximum, then d. Sweezy
marginal product is 204. The concept of input-output analysis was
a. One first developed by:
b. Minimum a. Quesney
c. Maximum b. Keynes
d. Zero c. Jevons
195. Which cost change with the change in level d. Leontief
of output even when output is zero? 205. According to classical theory of
a. Money cost employment, full employment is a normal
b. Real cost feature of which economy?
c. Variable cost a. Mixed
d. Fixed cost b. Capitalist
196. Which cost curve is known as envelope c. Open
curve? d. Socialistic
a. TC 206. According to classical economists money
b. MC plays which type of role in an economy?
c. STC a. Store of value
d. LAC b. Deferred payments
197. When demand and supply decrease equally, c. Medium of exchange
there will be no change in what? d. Paper money
a. Demand 207. According to classical economists if there is
b. Supply unemployment in an economy that is of
c. Quantity which type?
d. Price a. Temporary
198. Product differentiation is the main feature of b. Permanent
which market? c. Variable
a. Imperfect market d. Rare
b. Monopoly market 208. Real balance effects is also known as
c. Perfect market a. Output effect
d. Duopoly b. Pigou effect
199. In which market demand is of kinked shape? c. Demonstration effect
a. Imperfect market d. Ratchet effect
b. Monopoly market 209. Relative income hypothesis was propounded
c. Perfect market by whom?
d. Oligopoly market a. Pigou
200. Price of perishable goods is influenced by b. Bertrand
a. Demand c. Duesenberry
b. Supply d. Sweezy
c. Technology 210. Inflation has which kind of relationship with
d. Population value of money?
201. Excess capacity is found in which market? a. Positive
a. Perfect competition b. Negative
b. Monopolistic competition c. Neutral
c. Monopoly d. No
d. None
202. Under dumping a commodity is sold at 211. If a tariff is imposed on an imported good by a
which price in a foreign market? small nation, which of the following will occur?
a. Lower
a. The price of the imported good and
b. Higher
c. Equal domestic competing good will both
d. Not equal increase.
203. Under which model each seller assumes that
his rival’s price remains constant?
25
PPSC paper 1

b. The quantity consumed by a. World welfare will increase if all

domestic consumers will increase. large nations impose the tariff
c. Domestic consumers will gain. b. The large nation’s gains are equal
d. The nation will gain. to its trading partners’ losses
212. If a prohibitive tariff is imposed on imports of c. World welfare will fall
automobiles, then d. Large nation should impose a
a. Imports will be zero prohibitive tariff
b. Consumer surplus will be zero 217. The Stolper-Samuelson theorem postulates that
c. Domestic production will fall to the imposition of a tariff by a nation causes the
zero real income of the nation’s
d. Domestic consumption will fall to a. Scarce factor to rise
zero b. Scarce factor to fall
213. If the consumption effect of a tariff were 50 units c. Abundant factor to rise
and the production effect of a tariff were 40 d. Scarce and abundant factors to rise
units, then imports would 218. When a nation imposes an import tariff, the
a. Increase by 10 units nation’s offer curve will
b. Increase by 90 units a. Shift away from the axis measuring
c. Decrease by 90 units its export commodity,
d. Decrease by 10 units b. Shift away from the axis measuring
214. Which of the following must be true if a large its import commodity
nation imposes a tariff on an imported good? c. None tariff
a. The price received by domestic d. Any of the above is possible
producers will fall 219. The imposition of an import tariff by a nation
b. The price received by foreign will increase the nation’s welfare
producers will fall a. Always
c. Domestic consumers will gain b. Never
d. The nation will gain c. Sometimes
215. If a tariff of $10 per unit reduces the world price d. None of the above
by $4, then 220. The only arguments in favour of a tariff which
a. The nation imposing the tariff must could be valid (when are qualified) are
be a small nation a. Protection of domestic labour
b. Domestic consumers pay $6 of the against cheap foreign labour, the
$10 per unit tariff scientific tariff, and the reduction
c. Foreign producers pay $6 per unit of domestic unemployment
of the $10 per unit tariff b. Correction of a deficit in the
d. The nation imposing the tariff must nation’s balance of payments and
necessarily loss improvement of the n nation’s
216. Given that imposition of a tariff will improve the terms of trade
welfare of a large nation, which of the following c. The infant-industry arguments,
is true? strategic trade, and protection

26
PPSC paper 1

against dumping and for industries a. Greater

important for national defense b. Less
d. All of the above c. Equal
221. For Heckscher and Ohlin, the most important d. Any of the above
cause of the difference in relative commodity 226. After trade opens up, in the short-run:
prices and trade between nations is difference in a. All groups tied to the declining
a. Factor endowments sectors lose
b. Technology b. Only factors more intensively used
c. tastes in the declining sector lose
d. demand conditions c. Only factors less intensively used
222. The H-O theory postulates that as a result of in the declining sector lose
trade , the difference in factor price between d. Only the most abundant factor in
nations the country loses
a. Diminishes 227. A straight line production possibilities curve
b. Increases refers to
c. Remain unchanged a. Constant costs
d. Any of the above is possible. b. Increasing costs
223. Factor-intensity reversal refers to the situation c. Decreasing costs
where d. Any of the above
a. Both commodities are more L- 228. The opportunity cost theory assumes that
intensive in one nation than in the a. Labour is the only factor of
other nation production
b. One commodity is the L-intensive b. The price or cost of a commodity
commodity in one nation and the can be inferred from its labour
K-intensive commodity in other content
nation. c. Labour is homogeneous
c. The same commodity is more L- d. None of the above
intensive in one nation than in the 229. If a nation can produce three more units of X by
other nation producing one less unit of Y, then
d. Any of the above a. (Px/Py) = 1/3
224. Which type of trade is not explained by the b. ∆Y/∆X = 3/1
Heckscher-Oholin trade model? c. The opportunity cost of one unit of
a. Intra-industry trade Y is one-third unit of X
b. Trade based on economies of scales d. The opportunity cost of one unit of
c. Trade based on imitation gaps and X is three units of Y
product cycles 230. Which of the following statements is false?
d. All of the above a. Consumption patterns do not matter
225. Economies of scale is a term that refers to the for welfare gains or losses of
production situation where the growth of output neutral factors
in relation to the increase in the use of inputs is

27
PPSC paper 1

b. Consumption patterns do affect the d. Descriptive research

size of the gains or losses to all 238. Research that is conducted to explore new
idea or topic is called
factors a. Exploratory Research
c. Consumption patterns do not affect b. Descriptive Research
c. Diagnostic Research
the direction of gains or losses for
d. Fundamental Research
the most specialized factors 239. A method to gain knowledge by experience
d. Consumption patterns do not matter or observation is called:
a. Historical research
for the welfare gains or losses of a b. Empirical research
nation as a whole c. Diagnostic research
d. Descriptive research
231. Research that is conducted to expand
240. Type of focus group, in which two
knowledge of the researcher is called:
moderators intentionally take opposite sides,
a. Action Research
is called:
b. Conceptual Research
a. Two-way focus group
c. Basic Research
b. Dual moderator focus group
d. Diagnostic Research
c. Dueling moderator focus group
232. Motivational research is a type of
d. Respondent moderator focus group
a. Basic Research
241. Nations output minus the capital used to
b. Quantitative Research
obtain is called as
c. Qualitative Research
a. GDP
d. Conceptual Research
b. GNP
233. A method, similar to group interviews, used
c. NDP
to generate data is called:
d. NNP
a. Basic Research
242. If equilibrium income is less than full
b. Focus Group
employment income level then the economy
c. Diagnostic Research
is facing:
d. Fundamental Research
a. inflationary gap
234. The research that just describes the fact
b. recessionary gap
without providing any reason behind is
c. deficit in budget
called:
d. balanced budget
a. Diagnostic Research
243. If government spending increases, the
b. Descriptive Research
aggregate demand (AD) curve will
c. Exploratory Research
a. shift to the rightward
d. Qualitative Research
b. shift to the leftward
235. A problem that motivates the researcher to
c. remain constant
carry out research study is called:
d. None of the Above
a. Research Hypotheses
244. Unemployment rate is defined as
b. Research Problem
a. Total number of unemployed
c. Research Technique
divided by total population
d. Research Method
b. Total number of unemployed
236. The complete, plan, structure and strategy,
divided by labour force
within which a research is conducted is
c. Labour force divided by total
called:
population
a. Research Design
d. Population minus labour force
b. Research Problem
245. That part of consumption which depends
c. Research Methods
upon the level of income is called as
d. Research Hypotheses
a. Autonomous Consumption
237. The research which aims to explore new
b. Induced Consumption
concepts or ideas (theories) and upgrade or
c. Consumption Function
redefine the existing concepts is called:
d. None of the above
a. Conceptual research
246. If Govt. spending (G) is less than tax
b. Empirical research
revenue (T) then the budget will be
c. Analytical research
a. Surplus
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PPSC paper 1

b. Deficit 254. Economies of scale is a term that refers to

c. Balanced the production situation where the growth of
d. None of the above output in relation to the increase in the use
247. That inflation which emerges in an economy of inputs is
due to an increase in Cost of Production is a. Greater
called as: b. Less
a. Demand-Pull Inflation c. Equal
b. Non-Food Inflation d. Any of the above
c. Cost-Push Inflation 255. The vicious circle argument points out the
d. All of the above connection between
248. That output which an economy is capable of a. Income and population
producing by utilizing all of its resources b. Investment and technology
fully is called as: c. Productivity and income
a. Actual Output d. Savings and capital
b. Equilibrium Output 256. In his theory of development, Schumpeter
c. Potential Output stressed
d. Output Gap a. The need for balanced growth
249. National Income cannot be measured by: b. The need for infrastructure
a. Production Method c. The role of innovation
b. Expenditure Method d. The exploitation of the indigenous
c. GDP Deflator people
d. Income Method 257. Potential GDP is a measure of
250. Difference between Disposable Income and a. All the goods and services
Consumption is: produced by an economy from its
a. Savings inception to the present.
b. Consumption b. The value of the goods and services
c. Investment that could be produced if the
d. Net Income economy were operating with all of
251. The long-run growth model its people employed.
a. Analyzes the adjustment process c. The value of the goods and services
the economy experiences that could be produced if the
aftershocks. economy were operating at the full
b. Is based on sticky prices capacity of its capital stock with its
c. Analyze the economy after entire labour force fully employed.
complete adjustment has occurred d. The rate at which an economy’s
in response to any disturbance GDP could grow if its rate of
d. Clearly demonstrates the usefulness investment were maximized.
of fiscal and monetary policy in 258. An aggregate supply schedule drawn to be
fighting recessions consistent with completely flexible prices
252. Changes in tax revenue will not necessarily would
change long-run GDP because a. Be horizontal at some price level
a. Long-run GDP is independent of determined by aggregate demand
labour supply b. Be horizontal at some price level
b. Changes in government spending determined by interest rates and
typically accompany tax changes government policy.
c. Labour supply depends on average c. Be vertical above an arbitrary level
tax rates. of GDP
d. Labour supply depends on marginal d. Be vertical above a level of GDP
tax rates. determined by the capital stock,
253. The H-O theory postulates that as a result of availability of labour, and
trade , the difference in factor price between technology embodied in production
nations across the economy
a. Diminishes 259. In long-run, increases in the money supply
b. Increases will
c. Remain unchanged a. Increase GDP by increasing
d. Any of the above is possible investment
29
PPSC paper 1
b. Increase inflation
c. Decrease GDP by reducing the real
wage and thus labour supply
d. Increase the real wage
260. The demand for money
a. Varies positively with the interest
rate
b. Varies positively with GDP
c. Varies negatively with the price
level
d. Varies positively with the Dow-
Jones stock price index
261. An increase in the money supply causes;
a. Interest rates to fall, investment
spending to rise, and aggregate
demand to rise
b. Interest rates to rise, investment
spending to rise, and aggregate
demand to rise
c. Interest rates to rise, investment
spending to fall, and aggregate
demand to fall
d. Interest rates to fall, investment
spending to fall, and aggregate
demand to fall
262. 
If ˆ  4.6 and S .E ˆ  2.3 , then the
value of t-statistic will be:
a. 1.0
b. 2.0
c. 3.0
d. None of the above
263. Factor-intensity reversal refers to the
situation where
a. Both commodities are more L-
intensive in one nation than in the
other nation
b. One commodity is the L-intensive
commodity in one nation and the
K-intensive commodity in other
nation
c. The same commodity is more L-
intensive in one nation than in the
other nation
d. Any of the above
264. If two nations have the same opportunity costs
for two goods, then it must be the case that
a. Neither has an absolute advantage
in either good
b. One nation will have a comparative
advantage in one of the good
c. Trade can occur at the right terms
of trade
d. Neither nation has a comparative
advantage in either good
265. A straight line production possibilities curve
refers to
a. Constant costs
b. Increasing costs
c. Decreasing costs
d. Any of the above
266. A factor not directly related to growth potential
is
a. The abundance of natural resources
b. The number of free elections
c. The level of technology
d. The character of the people
267. Ricardo predicted the economy would end in a
stationary state because
a. People would tire of working
b. The economy would run out of
gold
c. Innovation would dry up
d. The economy would run out of
arable land
268. The lump-sum capital argument sees the primary
cause of underdevelopment as
a. The small size of the market
b. The lack of savings
c. The low level of technology
d. Foreign landlords
269. The economist who stressed the role of the
entrepreneur in development was
a. Hirschman
b. Nurske
c. Rosenstein-Rodan
d. Scitovsky
270. In Rostow’s theory, the drive to maturity
a. Starts the development process
b. Completes the development
process
c. Comes before the take-off
d. Follows the take-off
271. Curriculum organization used for different
concepts at the same class is called
a. Vertical
b. Horizontal
c. Logical
d. None
272. Teacher training is less emphasized in
a. Subject centered curriculum
b. Learner centered curriculum
c. Activity centered curriculum
d. None
273. The selection of the particular design is
influenced by
a. Types of Education
b. Elements of Education
c. Foundation of Education
d. Principle of Education
274. Explanatory methods are used in
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PPSC paper 1

a. Subject centered curriculum

b. Learner centered curriculum
c. Activity centered curriculum
d. None
275. Detailed contents of the subjects for a class are
called
a. Course
b. Behavior
c. Design
d. Logical sequence
276. Rote learning is a demerit of
a. Subject centered curriculum
b. Learner centered curriculum
c. Activity centered curriculum
d. None
277. The most important component of lesson plan is
a. Curriculum evaluation
b. Objectives
c. I.Q
d. Educational institution
278. Sociological foundations are concerned with?
a. Ideas
b. Psychological foundation
c. Society
d. Content
279. Subject centered designs revolve around?
a. Ideas
b. Psychological foundation
c. Society
d. Content
280. Detailed contents of the subjects for a class are
called?
a. Course
b. Behavior
c. Design
d. Logical sequence

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