Randomly Generated Economics Multiple-Choice Practice Exam
Grade: 12
Number of questions: 10

1. The upward slopping aggregate supply and downward slopping aggregate demand curves mean that:
   increase in both demand and supply reduces equilibrium level of output   
   outward shift in supply curve reduces equilibrium level of output while an inward shift increases it   
   inward shift in supply reduces equilibrium price   
   outward shift in demand curve increases equilibrium level of output while an inward shift decreases it   

2. When the relative costs for commodities are different between countries, a basis for beneficial trade exists. This situation describes the principle of ____________
   economic growth   
   comparative advantage   
   absolute advantage   

3. Which of the following statements correctly describes the consumption and saving linkage of the household?
   Increase in the income of a household has a negative influence on both consuming and saving behavior of the household.   
   If the average propensity to consumer of a household is 0.80, the average propensity to save for the same household can be 0.40.   
   If the marginal propensity to consume of a household is 0.80, the marginal propensity to save for the same household ban be 0.40.   
   if marginal propensity to consume( MPB) rises marginal propensity to save (MPS) must necessarily fall.   

4. If a retailer plants to increase the price of a product he sells, he must think that
   Demand for the product is perfectly elastic.   
   Demand for the product is price inelastic   
   The price of complements will also increase.   
   The good is inferior.   

5. In a closed economy without government, private saving is
   The amount of income that businesses have left after paying for the factors of production.   
   Always equal to investment.   
   The amount of tax revenue that the government has left after paying for its spending.   
   The amount of income that households have left after paying their taxes and paying for their consumption.   

6. The total population in Ethiopia in the year 2005 was 73,044,000. Out of this population,45% was below the age of 15 and 3% was above the age of 65. What was the dependency Ratio in the year 2005?

7. A fast growing recent adoption of technical innovations in the service sector in Ethiopia has occurred in ______________
   road transport   
   marine transportation   
   postal services   

8. What is the price - quantity pair that clears the market for commodity
Answer this Questions based on the following pieces of information.
The demand curve for commodity X is given by P = 300 -6Qd while the supply curve is represented by Qs = 10 + 1/2 P.
   (30, 60)   
   (60, 40)   
   (120, 30)   

9. Exchange rate determination is purely a task of the forces of supply and demand in __________
   flexible exchange rate regimes   
   managed float systems   
   adjustable peg systems   
   fixed exchange rate regimes   

10. Household consumption expenditure is influenced negatively by both___________
   Consumer's expectation of prices and consumer's income  
   The amount of household wealth and household size.   
   The Level of personal income and income tax   
   The level of household indebtedness and income tax   

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