Instructor/Lecturer Economics PPSC

Punjab Public Service Commission Pakistan

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How do you define own-price elasticity theoretically and empirically?
asked 6 months ago in Instructor/Lecturer Economics PPSC by Microeconomics
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Elaborate the cross-price elasticity theoretically and empirically
asked 6 months ago in Instructor/Lecturer Economics PPSC by Microeconomics
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Elaborate the income elasticity theoretically and empirically
asked 6 months ago in Instructor/Lecturer Economics PPSC by Microeconomics
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Explain the macroeconomic outlook of economy of Pakistan and suggest any policy framework for formulation of budget and reducing budget deficit.
asked 6 months ago in Instructor/Lecturer Economics PPSC by Economy of Pakistan
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Differentiate between the exchange rate systems vis-à-vis fixed, flexible and managed floating exchange rate system. Which regime is currently being pursued by Pakistan?
asked 6 months ago in Instructor/Lecturer Economics PPSC by Economy of Pakistan

Fani Warraich ECONOMICS   -   Microeconomics

Who is the father of economics?

Fani Warraich

GOOD

Fani Warraich

xcxcb

Janib Khan

Right

Fani Warraich ECONOMICS   -   Macroeconomics

Macroeconomics distinguishes between the real economy and the

Spending is influenced by both the amounts of products and services purchased and their dollar-denominated pricing.
Fani Warraich ECONOMICS   -   Macroeconomics

Until the First World War, the prices

The price-level was balanced over long periods of 20-50 years.
Janib Khan ECONOMICS   -   Microeconomics

The branch of economics that deals with the allocation of resources is called ______.

Fani Warraich

macroeconomics

Sumera Nawaz ECONOMICS   -   Microeconomics

Which of the following factors does NOT influence the demand for a good?

The cost of production is a determinant of supply, not demand. Demand is influenced by factors such as price of related goods, income, and future expectations.
Sumera Nawaz ECONOMICS   -   Microeconomics

If the demand for a product increases while its supply remains constant, what will happen to the equilibrium price and quantity?

An increase in demand with constant supply will lead to an increase in both equilibrium price and quantity traded.
Sumera Nawaz ECONOMICS   -   Microeconomics

Which of the following statements about elasticity of demand is true?

Elasticity of demand measures how much quantity demanded responds to a change in price. Elastic demand means consumers are sensitive to price changes.
Sumera Nawaz ECONOMICS   -   Microeconomics

Which of the following events would lead to a decrease in the equilibrium price of oranges?

A decrease in the price of a complement to oranges (orange juice) would increase the demand for oranges, leading to a decrease in equilibrium price.
Sumera Nawaz ECONOMICS   -   Microeconomics

If demand is perfectly elastic, what is the value of price elasticity of demand?

Perfectly elastic demand means any change in price results in an infinite change in quantity demanded.
Sumera Nawaz ECONOMICS   -   Microeconomics

When is the price elasticity of supply perfectly inelastic?

Perfectly inelastic supply means the quantity supplied does not change at all in response to changes in price.
Sumera Nawaz ECONOMICS   -   Microeconomics

If both supply and demand increase but the increase in supply is larger, what will happen to equilibrium price and quantity?

When both supply and demand increase, but the increase in supply is larger, the increase in quantity supplied will outweigh the increase in quantity demanded, leading to a decrease in price and an increase in quantity.
Sumera Nawaz ECONOMICS   -   Microeconomics

Which of the following is an example of a substitute good?

Substitute goods are those that can be used in place of each other, such as tea and coffee.
Sumera Nawaz ECONOMICS   -   Microeconomics

Which of the following would lead to a rightward shift of the supply curve?

An improvement in technology increases efficiency and lowers production costs, leading to an increase in supply.
Sumera Nawaz ECONOMICS   -   Microeconomics

If the price elasticity of demand for a good is less than 1, the demand is considered

If the price elasticity of demand is less than 1, it indicates that quantity demanded is not very responsive to changes in price, hence the demand is considered inelastic.
Sumera Nawaz ECONOMICS   -   Macroeconomics

Which of the following is NOT included in the calculation of Gross Domestic Product (GDP)?

Transfer payments are not counted in GDP as they do not represent production of goods and services.
Sumera Nawaz ECONOMICS   -   Macroeconomics

Which of the following measures is used to adjust Gross Domestic Product (GDP) for inflation?

Real GDP adjusts for inflation by removing the effects of price changes, providing a measure of GDP in constant prices.
Sumera Nawaz ECONOMICS   -   Macroeconomics

If Gross Domestic Product (GDP) is $10 trillion and Gross National Product (GNP) is $11 trillion, what is the value of net factor income from abroad (NFIA)?

GNP - GDP = NFIA, so $11 trillion - $10 trillion = $1 trillion.
Sumera Nawaz ECONOMICS   -   Macroeconomics

Which of the following transactions would be included in the calculation of Gross Domestic Product (GDP)?

Only final goods and services produced within the country's borders are included in GDP. The purchase of a used car (A), military equipment from a foreign country (C), and tuition fees (D) are not counted in GDP.
Sumera Nawaz ECONOMICS   -   Macroeconomics

Which of the following is NOT a component of the expenditure approach to calculating Gross Domestic Product (GDP)?

All of the listed options are components of the expenditure approach to GDP calculation.
Sumera Nawaz ECONOMICS   -   Macroeconomics

If a country's Gross Domestic Product (GDP) is $500 billion and its population is 100 million, what is the country's GDP per capita?

GDP per capita is calculated by dividing GDP by the population, so $500 billion / 100 million = $5,000.
Sumera Nawaz ECONOMICS   -   Macroeconomics

Which of the following is an example of a transfer payment?

Transfer payments are payments made by the government to individuals or households without the expectation of goods or services in return.
Sumera Nawaz ECONOMICS   -   Macroeconomics

Which of the following is NOT a limitation of Gross Domestic Product (GDP) as a measure of economic welfare?

GDP can be adjusted for inflation to calculate real GDP, addressing this limitation.
Sumera Nawaz ECONOMICS   -   Macroeconomics

In the circular flow of income, which sector consists of households?

The household sector represents individuals or households who consume goods and services and provide factors of production to firms.
Sumera Nawaz ECONOMICS   -   Macroeconomics

If a country's Gross Domestic Product (GDP) is $800 billion and its Gross National Product (GNP) is $750 billion, what is the value of net factor income from abroad (NFIA)?

GNP - GDP = NFIA, so $750 billion - $800 billion = -$50 billion. Since NFIA is negative, it means the country has a net outflow of income to the rest of the world, so the absolute value of NFIA is $50 billion.
Sumera Nawaz ECONOMICS   -   Econometrics

What is the primary purpose of using Instrumental Variables (IV) in econometrics?

Instrumental Variables (IV) are used in econometrics to address endogeneity problems, which occur when an explanatory variable is correlated with the error term. IVs help in obtaining consistent estimates by providing a source of variation that is correlated with the endogenous explanatory variable but uncorrelated with the error term.
Sumera Nawaz ECONOMICS   -   Econometrics

When is the use of a fixed-effects model preferable to a random-effects model in panel data analysis?

The fixed-effects model is preferable when the individual effects are correlated with the explanatory variables. This model accounts for unobserved heterogeneity by allowing each cross-sectional unit to have its own intercept, thus controlling for time-invariant characteristics.
Sumera Nawaz ECONOMICS   -   Econometrics

Which test is commonly used to detect autocorrelation in the residuals of a regression model?

The Durbin-Watson test is commonly used to detect autocorrelation in the residuals of a regression model. It tests the null hypothesis that there is no first-order autocorrelation in the residuals, with values near 2 indicating no autocorrelation and values approaching 0 or 4 indicating positive or negative autocorrelation, respectively.
Sumera Nawaz ECONOMICS   -   Econometrics

Why is multicollinearity a problem in multiple regression analysis?

Multicollinearity is a problem because it causes the standard errors of the regression coefficients to be inflated, which can lead to less precise estimates and make it difficult to determine the individual effect of each explanatory variable. This reduces the reliability of hypothesis tests.
Sumera Nawaz ECONOMICS   -   Econometrics

How to address heteroskedasticity in a regression model?

Heteroskedasticity can be addressed by applying robust standard errors, which provide consistent standard error estimates even when heteroskedasticity is present. This adjustment ensures that inference drawn from the regression coefficients remains valid despite the presence of non-constant variance in the error terms.
Sumera Nawaz ECONOMICS   -   Managerial Economics

What is the main reason for a firm to engage in price discrimination?

Price discrimination allows a firm to charge different prices to different customers based on their willingness to pay. By doing so, the firm can capture more consumer surplus and convert it into additional revenue, thereby maximizing its overall revenue.
Sumera Nawaz ECONOMICS   -   Managerial Economics

When should a firm continue producing in the short run even if it is incurring losses?

A firm should continue producing in the short run if its total revenue covers variable costs. This is because, in the short run, fixed costs are sunk and must be paid regardless of production. If the firm can cover its variable costs, it minimizes its losses by contributing to fixed costs.
Sumera Nawaz ECONOMICS   -   Managerial Economics

Where is the optimal point of production for a firm operating under perfect competition in the long run?

In the long run, a perfectly competitive firm will produce at the point where marginal cost (MC) equals average total cost (ATC), and this is also where MC equals marginal revenue (MR). At this point, the firm is making normal profit (zero economic profit), as any deviation would prompt market entry or exit, driving profits to zero.
Sumera Nawaz ECONOMICS   -   Managerial Economics

How to determine the profit-maximizing output level for a monopolist?

A monopolist maximizes profit by producing the output level where marginal revenue (MR) equals marginal cost (MC). At this point, the additional revenue from selling one more unit equals the additional cost of producing that unit, maximizing the firm's profit.
Sumera Nawaz ECONOMICS   -   Managerial Economics

Which factor can lead to economies of scale in production?

Economies of scale occur when a firm's per-unit costs decrease as production increases. One way this can happen is through bulk purchasing of raw materials at a discounted rate, which reduces the average cost of inputs and contributes to lower overall production costs.
Fani Warraich ECONOMICS   -   Managerial Economics

Which pricing strategy involves setting a high initial price for a new or innovative product to "skim" segments of the market willing to pay the higher price?

Price skimming involves setting a high initial price for a new or innovative product to capture the maximum consumer surplus from segments of the market willing to pay the higher price. As these segments are exhausted, the price is gradually lowered to attract more price-sensitive customers.
Fani Warraich ECONOMICS   -   Managerial Economics

How to determine the optimal capital structure for a firm according to the Modigliani-Miller theorem without taxes?

According to the Modigliani-Miller theorem without taxes, in an efficient market, the value of a firm is unaffected by its capital structure. The theorem posits that the firm's value is determined by its operating income and the risk of its underlying assets, not by how it is financed.
Fani Warraich ECONOMICS   -   Managerial Economics

Why is the kinked demand curve model used in oligopoly markets?

The kinked demand curve model is used to explain why prices in oligopoly markets tend to be rigid. The model suggests that firms are reluctant to change prices because they expect competitors to match price decreases but not price increases, leading to a kink in the demand curve and resulting in price stability.
Fani Warraich ECONOMICS   -   Managerial Economics

What is the primary characteristic of a Nash Equilibrium in game theory?

A Nash Equilibrium occurs when players choose strategies such that no player can benefit by unilaterally changing their strategy. At this equilibrium, each player's strategy is optimal given the strategies of all other players, leading to no incentive for any player to deviate.
Fani Warraich ECONOMICS   -   Managerial Economics

When analyzing a firm's cost structure, what does the term "economies of scope" refer to?

Economies of scope refer to cost savings that a firm experiences by producing a variety of products. These savings arise when the production of one good reduces the cost of producing another related good, often due to shared resources, technologies, or distribution channels.
Fani Warraich ECONOMICS   -   Economy of Pakistan

What is the estimated percentage of Pakistan's population living below the poverty line, according to the 2022 World Bank report?

Fani Warraich ECONOMICS   -   Economy of Pakistan

Which of the following industries is the largest contributor to Pakistan's exports, accounting for approximately 60% of total exports?

Fani Warraich ECONOMICS   -   Economy of Pakistan

What is the name of the flagship program launched by the Government of Pakistan in 2022 to provide subsidized loans to small and medium-sized enterprises (SMEs)?

Fani Warraich ECONOMICS   -   Economy of Pakistan

According to the Pakistan Bureau of Statistics (PBS), what is the estimated growth rate of Pakistan's GDP in the fiscal year 2022-23?

Fani Warraich ECONOMICS   -   Economy of Pakistan

Which international organization has provided the largest amount of foreign assistance to Pakistan in the form of loans and grants, with a total commitment of over $10 billion since 2010?

Fani Warraich ECONOMICS   -   Macroeconomics

Which of the following is not typically an element in the structural change that accompanies development?

Structural change usually involves a decrease in the share of agriculture in GDP as economies develop.
Fani Warraich ECONOMICS   -   Macroeconomics

A supply side vicious circle of poverty suggests that poor nations remain poor because:

Low savings and investment create a cycle of poverty by limiting capital accumulation and growth in poor nations.
Fani Warraich ECONOMICS   -   Macroeconomics

When the manufacturer of power looms expands, there are forward linkage effects due to:

Forward linkage effects relate to increased production in downstream industries, like woven cloth in this case.
Fani Warraich ECONOMICS   -   Macroeconomics

A certain amount of goods and services is necessary for a minimum standard of living. This is called:

Basic needs refer to the minimum level of goods and services necessary to sustain a basic standard of living.
Fani Warraich ECONOMICS   -   Macroeconomics

With perfect income equality the Gini coefficient in a country would be

A Gini coefficient of 0 indicates perfect income equality, with no disparity in income distribution.
Fani Warraich ECONOMICS   -   Macroeconomics

There are strong theoretical reasons to expect that changes in wealth are responsible for changes in consumption. Nonetheless, one reason that we observe a tight link between consumption and disposable income is:

Household savings act as a buffer, making consumption less volatile relative to income fluctuations.
Fani Warraich ECONOMICS   -   Macroeconomics

The accelerator principle states:

The accelerator principle posits that investment is positively related to expected growth in output.
Fani Warraich ECONOMICS   -   Macroeconomics

Economic growth measures the:

Economic growth is commonly measured by the increase in a country's output of goods and services (GDP).
Fani Warraich ECONOMICS   -   Macroeconomics

Non-traded goods do not enter measured GDP because:

Non-traded goods, like services, are not included in GDP as they do not enter the market and hence lack market prices.
Fani Warraich ECONOMICS   -   Macroeconomics

The Keynesian assumption is a convenient analytical short cut and turns out to be a rather accurate description of the reality. What does it assume?

Keynesian economics often assumes constant prices in the short run to simplify analysis of demand-driven economic fluctuations.
Fani Warraich ECONOMICS   -   Macroeconomics

What is not a component of the GDP?

Employment rate is not directly a component of GDP, which measures the total output produced within a country.
Fani Warraich ECONOMICS   -   Macroeconomics

In short-run macroeconomic analysis, demand is often viewed as the driving force. Which component of total demand is often regarded as being independent of economic conditions and thus exogenous in the model?

Government spending and tax receipts are often treated as exogenous in short-run models, as they are determined by policy rather than economic conditions.
Fani Warraich ECONOMICS   -   Macroeconomics

Which kind of demand fluctuates the most?

Private demand for investment is highly volatile due to changes in business expectations, interest rates, and other factors.
Fani Warraich ECONOMICS   -   Macroeconomics

It is the _______ interest rate that matters for spending decisions and the _______ interest rate that is relevant when we look at monetary questions.

The real interest rate influences spending decisions by reflecting the true cost of borrowing, while nominal rates are used in monetary policy.
Fani Warraich ECONOMICS   -   Macroeconomics

The aggregate production function for the Solow growth model assumes ___________ returns to scale and _____________ marginal productivity of labour and capital.

The Solow model assumes constant returns to scale and diminishing marginal productivity for both labor and capital.
Fani Warraich ECONOMICS   -   Macroeconomics

The labour measure (L) is:

The labor measure (L) is typically the total number of employed workers multiplied by the average hours worked, reflecting the actual labor input.
Fani Warraich ECONOMICS   -   Microeconomics

The optimal capital stock is achieved when the user cost of capital is equal to:

Optimal capital stock occurs when the marginal product of capital equals the user cost of capital, balancing the costs and benefits of capital.
Fani Warraich ECONOMICS   -   Microeconomics

The essence of Engel's law is that as family income rise:

Engel's law states that as income increases, the proportion of income spent on food decreases.
Fani Warraich ECONOMICS   -   Microeconomics

The concept of opportunity cost is based upon the principle of:

Opportunity cost is based on the concept of scarcity, where choosing one option means forgoing the next best alternative.
Fani Warraich ECONOMICS   -   Microeconomics

Which of the following is an INCORRECT statement about a budget constraint?

Indifference between points on the budget constraint is incorrect; preferences between them can vary based on individual utility.
Fani Warraich ECONOMICS   -   Macroeconomics

Goal 1 of Sustainable Development Goals relates to:

Goal 1 of the SDGs focuses on ending poverty in all its forms everywhere, with a key focus on hunger.
Fani Warraich ECONOMICS   -   Macroeconomics

Financial Inclusion means:

Financial inclusion refers to ensuring that individuals and businesses have access to useful and affordable financial products and services.
Fani Warraich ECONOMICS   -   Macroeconomics

Gini coefficient is the measure of:

The Gini coefficient measures income inequality within a country, with 0 representing perfect equality and 1 indicating maximum inequality.
Fani Warraich ECONOMICS   -   Macroeconomics

Economic development is measured by:

Economic development encompasses various aspects, including sustenance, freedom, and self-esteem, reflecting overall human well-being.
Fani Warraich ECONOMICS   -   Economy of Pakistan

During FY 2022-23, Pakistan?s industrial sector growth rate is:

The industrial sector in Pakistan contracted by -2.94% during FY 2022-23.
Fani Warraich ECONOMICS   -   Economy of Pakistan

Pakistan sought ?International Monetary Fund?s Financial Assistance? ________ times in 75 years.

Pakistan has approached the IMF for financial assistance 23 times in its 75-year history.
Fani Warraich ECONOMICS   -   Economy of Pakistan

Unemployment rate is relatively higher in _______ in Pakistan as per Labor Force Survey 2020-21.

The Labor Force Survey 2020-21 indicates that the unemployment rate is relatively higher among the youth in Pakistan.
Fani Warraich ECONOMICS   -   Economy of Pakistan

Pakistan?s 1st digital population census was conducted in the year:

Pakistan conducted its first digital population census in 2023, using technology to enhance data accuracy and collection efficiency.
Fani Warraich ECONOMICS   -   Economy of Pakistan

According to the State Bank of Pakistan (SBP) redefined Act 2022, the primary function of SBP is:

The SBP Act 2022 redefines the central bank's primary objective as maintaining price stability in Pakistan.
Fani Warraich ECONOMICS   -   Economy of Pakistan

The CPI inflation for FY 2022-23 is:

The Consumer Price Index (CPI) inflation for Pakistan in FY 2022-23 was 29.3%, reflecting a significant rise in prices.
Fani Warraich ECONOMICS   -   Macroeconomics

Core inflation measures:

Core inflation typically excludes volatile items such as food and energy, focusing on the CPI to measure underlying inflation trends.
Fani Warraich ECONOMICS   -   Macroeconomics

Okun?s Law defines the relationship between:

Okun's Law states that there is an inverse relationship between unemployment and GDP growth, with higher growth reducing unemployment.
Fani Warraich ECONOMICS   -   Macroeconomics

GDP measures ?all goods and services _________________________ produced in a given year?.

GDP measures the total market value of all goods and services produced within a country's borders in a given year.
Fani Warraich ECONOMICS   -   Macroeconomics

The monetary policy tools are used for:

Monetary policy tools are used by central banks to achieve multiple objectives, including price stability, financial stability, and economic growth.
Fani Warraich ECONOMICS   -   Macroeconomics

Quantity theory of money states that when the quantity of money increases, the value of money:

According to the quantity theory of money, an increase in the money supply leads to a proportional decrease in the value of money, leading to inflation.
Fani Warraich ECONOMICS   -   Macroeconomics

Fiscal and monetary policies are used to:

Fiscal and monetary policies are primarily used to stabilize the economy by managing demand and controlling inflation.
Fani Warraich ECONOMICS   -   Macroeconomics

GNP measures:

Gross National Product (GNP) measures the total production and income of a nation, including income earned abroad by its residents.
Fani Warraich ECONOMICS   -   Macroeconomics

In Pakistan, investment as a percentage of GDP is lower than:

Pakistan's investment as a percentage of GDP is lower compared to India, China, and Bangladesh, indicating challenges in attracting investment.
Fani Warraich ECONOMICS   -   Macroeconomics

Economic recession is defined as reduced economic activities and employment levels for at least:

An economic recession is typically defined as two consecutive quarters of negative GDP growth, leading to reduced economic activity and higher unemployment.

Contributor(3)

Fani Warraich
Janib Khan
Sumera Nawaz