Input-Output Analysis MCQs with Answers

In input-output analysis, which of the following represents the flow of goods and services from one sector to another?
a) Inputs
b) Outputs
c) Intermediate consumption
d) Final demand
Answer: c) Intermediate consumption

What is the main purpose of input-output analysis?
a) To analyze the production structure of an economy
b) To calculate the GDP of an economy
c) To determine the inflation rate of an economy
d) To forecast future economic growth
Answer: a) To analyze the production structure of an economy

In input-output analysis, what does the coefficient of direct requirements represent?
a) The total value of outputs produced by a sector
b) The total value of inputs required by a sector
c) The total value of final demand in the economy
d) The total value of intermediate consumption in the economy
Answer: b) The total value of inputs required by a sector

Which of the following is not a key assumption of input-output analysis?
a) Fixed coefficients of production
b) Constant returns to scale
c) Perfect competition in the economy
d) Exogenous changes in final demand
Answer: d) Exogenous changes in final demand

In input-output analysis, what is the Leontief inverse matrix used for?
a) Calculating the total output of each sector
b) Estimating the multiplier effects in the economy
c) Determining the equilibrium prices in the economy
d) Analyzing the distribution of income in the economy
Answer: c) Determining the equilibrium prices in the economy

Which of the following is a limitation of input-output analysis?
a) It assumes constant returns to scale in the economy
b) It does not account for changes in technology over time
c) It requires detailed data on the intersectoral transactions
d) It cannot capture the dynamic nature of the economy
Answer: d) It cannot capture the dynamic nature of the economy

What is the input-output coefficient of a sector?
a) The total output of the sector
b) The total value of inputs required by the sector
c) The total value of intermediate consumption by the sector
d) The total value of final demand for the sector’s products
Answer: b) The total value of inputs required by the sector

Which of the following represents the final demand in input-output analysis?
a) Household consumption
b) Government expenditure
c) Investment expenditure
d) All of the above
Answer: d) All of the above

What does the input-output coefficient matrix represent?
a) The technical coefficients of production in the economy
b) The intermediate consumption matrix in the economy
c) The final demand matrix in the economy
d) The Leontief inverse matrix in the economy
Answer: a) The technical coefficients of production in the economy

In input-output analysis, which of the following represents the total value of inputs required to produce one unit of output?
a) Average input coefficient
b) Marginal input coefficient
c) Total input coefficient
d) Direct input coefficient
Answer: d) Direct input coefficient

What is the main advantage of input-output analysis?
a) It provides a detailed breakdown of economic activities
b) It allows for the analysis of complex interrelationships in the economy
c) It can capture the dynamic nature of the economy
d) It can provide accurate forecasts of economic growth
Answer: b) It allows for the analysis of complex interrelationships in the economy

Which of the following is an application of input-output analysis?
a) Economic impact studies
b) Cost-benefit analysis
c) Environmental assessment
d) All of the above
Answer: d) All of the above

What is the primary source of data for input-output analysis?
a) National income accounts
b) Household surveys
c) Business surveys
d) Trade data
Answer: a) National income accounts

In input-output analysis, what does the term “value-added” refer to?
a) The total output of a sector
b) The difference between a sector’s output and its intermediate consumption
c) The final demand for a sector’s products
d) The total value of inputs required by a sector
Answer: b) The difference between a sector’s output and its intermediate consumption

Which of the following is not a type of input-output model?
a) Leontief model
b) Sraffa model
c) Wassily model
d) Rasmussen model
Answer: c) Wassily model

What does the term “intermediate consumption” refer to in input-output analysis?
a) The consumption of goods and services by households
b) The consumption of goods and services by businesses
c) The use of inputs by a sector to produce its output
d) The use of final goods and services by households and businesses
Answer: c) The use of inputs by a sector to produce its output

In input-output analysis, which of the following represents the difference between a sector’s output and its intermediate consumption?
a) Value-added
b) Final demand
c) Direct requirements
d) Intermediate consumption matrix
Answer: a) Value-added

Which of the following is not a sector in input-output analysis?
a) Agriculture
b) Manufacturing
c) Services
d) Households
Answer: d) Households

What is the basic unit of analysis in input-output analysis?
a) Sectors
b) Industries
c) Firms
d) Individuals
Answer: a) Sectors

In input-output analysis, which of the following represents the total output of a sector?
a) Intermediate consumption
b) Final demand
c) Direct requirements
d) Value-added
Answer: d) Value-added

What is the input-output equation used for in input-output analysis?
a) Estimating the value-added of each sector
b) Estimating the direct requirements of each sector
c) Balancing the total output and total demand in the economy
d) Calculating the multiplier effects in the economy
Answer: c) Balancing the total output and total demand in the economy

In input-output analysis, what does the term “multiplier” refer to?
a) The ratio of total output to final demand in the economy
b) The ratio of total output to intermediate consumption in the economy
c) The ratio of total output to direct requirements in the economy
d) The ratio of total output to value-added in the economy
Answer: a) The ratio of total output to final demand in the economy

Which of the following is not a key component of input-output analysis?
a) Input coefficient matrix
b) Output coefficient matrix
c) Final demand matrix
d) Marginal utility matrix
Answer: d) Marginal utility matrix

What does the term “coefficient of direct requirements” represent in input-output analysis?
a) The ratio of final demand to total output in the economy
b) The ratio of intermediate consumption to total output in the economy
c) The ratio of direct requirements to total output in the economy
d) The ratio of value-added to total output in the economy
Answer: c) The ratio of direct requirements to total output in the economy

In input-output analysis, which of the following represents the demand for a sector’s products by other sectors?
a) Intermediate consumption
b) Final demand
c) Direct requirements
d) Value-added
Answer: c) Direct requirements

What is the key assumption of input-output analysis regarding production technology?
a) Fixed coefficients of production
b) Constant returns to scale
c) Perfect competition
d) Endogenous technological change
Answer: a) Fixed coefficients of production

Which of the following is an example of a sector in input-output analysis?
a) Automobile manufacturing
b) Banking services
c) Construction industry
d) All of the above
Answer: d) All of the above

What is the purpose of input-output analysis in economic planning?
a) To determine the optimal allocation of resources
b) To estimate the impact of policy changes on the economy
c) To forecast future economic growth
d) All of the above
Answer: d) All of the above

Which of the following represents the total value of final demand in the economy?
a) Intermediate consumption
b) Value-added
c) Direct requirements
d) Final demand matrix
Answer: d) Final demand matrix

In input-output analysis, what does the term “direct requirements” refer to?
a) The value of intermediate consumption by a sector
b) The value of inputs required by a sector
c) The value of final demand for a sector’s products
d) The value of value-added by a sector
Answer: c) The value of final demand for a sector’s products

What is the input-output coefficient matrix used for in input-output analysis?
a) Balancing the total output and total demand in the economy
b) Estimating the value-added of each sector
c) Calculating the multiplier effects in the economy
d) Analyzing the intersectoral relationships in the economy
Answer: d) Analyzing the intersectoral relationships in the economy

Which of the following is not a type of input-output table?
a) Supply and use table
b) Input coefficient table
c) Leontief inverse table
d) Value-added table
Answer: d) Value-added table

In input-output analysis, what does the term “final demand” refer to?
a) The demand for intermediate inputs in the economy
b) The demand for a sector’s products by other sectors
c) The demand for final goods and services by households and businesses
d) The demand for value-added in the economy
Answer: c) The demand for final goods and services by households and businesses

What is the key assumption of input-output analysis regarding the behavior of economic agents?
a) Fixed consumption patterns
b) Perfect competition
c) Rational behavior
d) Constant returns to scale
Answer: b) Perfect competition

In input-output analysis, what does the term “intermediate consumption” refer to?
a) The consumption of goods and services by households
b) The consumption of goods and services by businesses
c) The use of inputs by a sector to produce its output
d) The use of final goods and services by households and businesses
Answer: c) The use of inputs by a sector to produce its output

Which of the following is not a measure of interdependence in input-output analysis?
a) Coefficient of direct requirements
b) Coefficient of value-added
c) Coefficient of intermediate consumption
d) Coefficient of final demand
Answer: b) Coefficient of value-added

What does the term “value-added coefficient” represent in input-output analysis?
a) The ratio of value-added to total output in the economy
b) The ratio of intermediate consumption to total output in the economy
c) The ratio of final demand to total output in the economy
d) The ratio of direct requirements to total output in the economy
Answer: a) The ratio of value-added to total output in the economy

Which of the following is a measure of economic efficiency in input-output analysis?
a) Input-output ratio
b) Value-added ratio
c) Multiplier effect
d) Elasticity of substitution
Answer: a) Input-output ratio

In input-output analysis, what does the term “coefficient of final demand” represent?
a) The ratio of final demand to total output in the economy
b) The ratio of intermediate consumption to total output in the economy
c) The ratio of direct requirements to total output in the economy
d) The ratio of value-added to total output in the economy
Answer: a) The ratio of final demand to total output in the economy

Which of the following is not a limitation of input-output analysis?
a) It assumes fixed coefficients of production
b) It requires detailed data on intersectoral transactions
c) It cannot capture the dynamic nature of the economy
d) It does not account for changes in technology over time
Answer: d) It does not account for changes in technology over time

In input-output analysis, which of the following represents the total value of inputs required to produce one unit of output?
a) Average input coefficient
b) Marginal input coefficient
c) Total input coefficient
d) Direct input coefficient
Answer: c) Total input coefficient

What is the input-output model used for in input-output analysis?
a) Balancing the total output and total demand in the economy
b) Estimating the value-added of each sector
c) Calculating the multiplier effects in the economy
d) Analyzing the intersectoral relationships in the economy
Answer: a) Balancing the total output and total demand in the economy

In input-output analysis, which of the following represents the difference between a sector’s output and its intermediate consumption?
a) Value-added
b) Final demand
c) Direct requirements
d) Intermediate consumption matrix
Answer: a) Value-added

Which of the following is not a component of the input-output equation in input-output analysis?
a) Intermediate consumption matrix
b) Output vector
c) Final demand vector
d) Value-added matrix
Answer: d) Value-added matrix

In input-output analysis, what does the term “value-added matrix” represent?
a) The matrix of intermediate consumption coefficients in the economy
b) The matrix of direct requirements in the economy
c) The matrix of final demand coefficients in the economy
d) The matrix of value-added coefficients in the economy
Answer: d) The matrix of value-added coefficients in the economy

Which of the following represents the total value of intermediate consumption in the economy?
a) Intermediate consumption matrix
b) Final demand vector
c) Output vector
d) Value-added matrix
Answer: a) Intermediate consumption matrix

What is the main purpose of the Leontief inverse matrix in input-output analysis?
a) Balancing the total output and total demand in the economy
b) Estimating the value-added of each sector
c) Calculating the multiplier effects in the economy
d) Determining the equilibrium prices in the economy
Answer: d) Determining the equilibrium prices in the economy

Which of the following is not an application of input-output analysis?
a) Economic impact assessment
b) Input-output modeling
c) Industrial policy formulation
d) Monetary policy evaluation
Answer: d) Monetary policy evaluation

What is the key assumption of input-output analysis regarding economic behavior?
a) Fixed consumption patterns
b) Rational behavior
c) Constant returns to scale
d) Perfect competition
Answer: d) Perfect competition

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