Economics MCQ questions and Answers





Economics MCQ questions and Answers In each examination few questions having on economics that’s why i am giving here few important questions and answers on economics terms in the style of MCQ. Check below the Economics MCQ questions and solutions –

1. Sales Maximization Concept is given by ———?

A. Adam Smith
B. Samuelson
C. Marshall
D. Baumol

ANSWER: D

2. Micro economic theory is also known as —————–?

A. Business Theory
B. Price Theory
C. Individual Theory
D. Cost theory

ANSWER: B

3. Profit = ——————–?

A. TR+ TC
B. TR – TC
C. TR X TC
D. TR/TC.

ANSWER: B

4. Economics is derived from the Greek word oikonomikus which means

A. Business Management
B. Economics
C. House Management
D. Wealth Management

ANSWER: C

5. Who is assumed as father of Economics?

A. Adam smith
B. Robinson
C. Marshall
D. George Bernard

ANSWER:A



6. Who expressed the view that Economics is neutral between ends?

A. Robbins
B. Marshall
C. Pigou
D. Adam smith

ANSWER: A

7. Economics is the science of wealth who gave this definition?

A. J.K.Mehta
B. Marshall
C. Adam Smith
D. Robbins

ANSWER: C

8. The existence of both public and private sector enterprises constitutes

A. .capitalist economy
B. Mixed economy
C. Socialist economy
D. None of the Above

ANSWER: B

9. Capitalism refers to

A. the use of markets
B. government ownership of capital goods
C. private ownership of capital goods
D. private ownership of homes & cars

ANSWER: C



10. An Enquiry into the Nature and Causes of Wealth of Nations is the book of economist

A. Adam Smith
B. Marshall.
C. Robbins.
D. Samuelson.

ANSWER: A

11. Who has given scarcity definition of economics?

A. Adam smith
B. Marshall
C. Robbins
D. Robertson

ANSWER: C

12. The extra utility from consuming one more unit of a commodity is called

A. Marginal utility
B. Additional utility
C. Surplus utility
D. Bonus utility

ANSWER: A

13. If marginal utility is zero

A. Total utility is zero
B. An additional unit of consumption will decrease total utility
C. consumption will increase total utility
D. Total utility is maximized

ANSWER: D

14. When the total utility curve reaches its maximum level, marginal utility is

A. Zero
B. Positive
C. Rising
D. Negative

ANSWER: A

15. Who has given the concept of consumer surplus?

A. Marshall
B. Robbins
C. Pigou
D. None of these

ANSWER: A



16. Utility means

A. Power to satisfy a want.
B. Usefulness.
C. Willingness of a person
D. Harmfulness

ANSWER: A

17. Marginal utility is equal to average utility at that time when average utility is

A. Increasing
B. Maximum.
C. Falling.
D. Minimum

ANSWER: D

18. Sales Maximization is suitable for ———— market

A. Oligopoly
B. Duopoly
C. Monopoly
D. Monopsony

ANSWER: A

19. Demand is a function of ———–

A. Income.
B. Advertisement
C. Consumers
D. Price

ANSWER: D

20. Marginal rate of substitution represents the slope of_________ curve.

A. Supply
B. Demand
C. Isoquant
D. Indifference

ANSWER: D

20. When we know the quantity of a product that buyers wish to purchase at each possible price,we know

A. Demand
B. Supply
C. Excess demand
D. Excesses supply

ANSWER: A

21. Which will cause a change in the demand for commodity X
A. A Change In Tastes.
B. A Change In Income.
C. A Change In The Price of X .
D. A Change In Price Of Complementary Product

ANSWER: C

22. Other things being equal, the law of demand implies that as

A. the demand for increases, the price will decrease.
B. income increases, the quantity of demanded will increase.
C. the price of increases, the quantity of demanded will decrease
D. the price of increases, the quantity of demanded will increase

ANSWER: C

23. For inferior commodities, income effect is ______________.

A. Zero.
B. Negative.
C. Infinite.
D. Positive

ANSWER: B

24. In Relatively Elastic Demand ED is =————

A. E=1
B. E=0
C. E>1
D. E<1

ANSWER: C

25. A Relative change in quantity demanded is less than the relative change in money income is—————— Income elasticity

A. High
B. Zero
C. Low
D. Negative

ANSWER: C

26. If two goods are close substitutes, __________________?

A. an increase in the price of one will decrease the demand for the other.
B. an increase in the price of one will increase the demand for the other.
C. a decrease in the price of one will increase the demand for the other.
D. a decrease in the price of one will have no effect on the demand for the other

ANSWER: B

27. People demand more of product X when the price of product Y decreases. This means X and Y are_______________.

A. complements.
B. substitutes
C. not related.
D. both inexpensive

ANSWER: B

28. An increase in consumer income will increase demand for a ———— But decrease demand for a

A. Substitute good, inferior good
B. Normal good, inferior good
C. Inferior good, normal good
D. Normal good, complementary good

ANSWER: B

29. The demand for a good is highly inelastic if __________________

A. the price elasticity of the good is close to zero.
B. the income elasticity of the good is close to one
C. if it is a necessity
D. both a and c

ANSWER: D

30. A perfectly inelastic demand curve __________________.

A. is a vertical line parallel to Y-axis.
B. is a vertical line parallel to X-axis.
C. indicates a good with no close substitutes.
D. a and c.

ANSWER: D

31. Demand curve is a _____________.

A. falling curve
B. rising curve
C. Downward sloping curve
D. upward sloping curve

ANSWER: C

32. A positive cross elasticity of demand coefficient indicates that ———–

A. A product is an inferior good
B. A product is a normal good
C. Two products are substitute goods
D. Two products are complementary goods

ANSWER: C

33. Forecasts ___________________.

A. becomes more accurate with longer time horizons.
B. is rarely perfect.
C. is more accurate for individual items than for groups of items.
D. all of the above

ANSWER: A

34. Forecasts are usually classified by time horizon into three categories they are
_________________.

A. short-range, medium-range, and long-range
B. finance/accounting, marketing, and operations
C. strategic, tactical, and operational
D. exponential smoothing, regression, and time series

ANSWER: A

35. The three major types of forecasts used by business organizations are ________________.

A. strategic, tactical, and operational
B. economic, technological and demand
C. exponential smoothing, Delphi, and regression
D. causal, time-series, and seasonal

ANSWER: D

36. Which of the following uses three types of participants: decision makers, staff personnel, and respondents

A. Executive Opinions.
B. Sales Force Composites.
C. The Delphi Method
D. Consumer Surveys.

ANSWER: D

37. Time-series data may exhibit which of the following behaviors?

A. Trend.
B. Random Variations.
C. Seasonality.
D. Cycles.

ANSWER: A

38. Gradual, long-term movement in time-series data is called _____________.

A. seasonal variation.
B. cycles.
C. trends.
D. exponential variation

ANSWER: A

39. Which of the following is not present in a time series?

A. Seasonality.
B. Operational Variations.
C. Trend.
D. Random Variations

ANSWER: D

40. In Sample survey method ——– Technique is adopted

A. Deliberate
B. Convenience
C. Quota
D. Random

ANSWER: D

41. In time series, which of the following cannot be predicted?

A. Large Increases In Demand.
B. Technological Trends.
C. Seasonal Fluctuations.
D. Random Fluctuations

ANSWER: C

42. Car and petrol are ———— goods

A. Substitutes
B. Complementary
C. producers
D. None of the above.

ANSWER: B

43. Tea and coffee are ———- Goods

A. Substitutes
B. Complementary
C. Producers
D. None of the above

ANSWER: A

44. In cross elasticity of demand, for unrelated goods the demand curve will be ———-

A. Horizontal straight line
B. Rectangular hyperbola
C. Vertical line
D. None of the above

ANSWER: C

45. The total outlay method explains the relationship between Price and ——-

A. Demand
B. Supply
C. Expenditure
D. Income

ANSWER: C

46. Which of the following is included in exceptions to the law of demand

A. Giffen Goods
B. Prestigious goods
C. Both of the above
D. None of the above

ANSWER: C

47. When a commodity with many uses is demanded then it is called

A. Direct demand
B. Joint demand
C. Composite demand
D. None of these

ANSWER: C

48. A fall in the price of a commodity leads to _______________.

A. a shift in demand
B. a fall in demand
C. a rise in the consumer’s real income
D. a fall in the consumer’s real income

ANSWER: C

49. An increase in demand can result from ____________.

A. a decline in market price
B. an increase in income
C. a reduction in the price of a substitute
D. an increase in the price of complements

ANSWER: B

50. Giffen goods are goods ___________.

A. for which demand increases as price increases
B. which have a high income elasticity of demand
C. which has a low cross elasticity of demand
D. which are in very short supply

ANSWER: A

51. Elasticity of demand is _______________.

A. slope of the demand curve
B. usually unity
C. usually zero
D. degree of responsiveness of quantity demanded to a change in price.

ANSWER: D

52. If demand is elastic and price increases ______________.

A. total revenue will remain unchanged.
B. total revenue will fall.
C. total revenue will rise.
D. total revenue will become zero

ANSWER: B

53. .How would you indicate relatively inelastic demand by using one of the following measures_________________.

A. E = Zero.
B. E is less than 1.
C. E is greater than 1.
D. E = 1.

ANSWER: B

54. If the income elasticity of demand is greater than unity, the commodity is ____________.

A. a necessity
B. a luxury
C. an inferior good
D. a non-related good

ANSWER: B

55. A demand curve which is a horizontal straight line has an elasticity that is ___________.

A. zero
B. greater than zero but less than one
C. one
D. infinite

ANSWER: D

56. Demand forecasting means _________________.

A. simply guessing about future demand
B. establishing relations between demand and its determinants
C. predicting level of demand at a future date
D. all the above

ANSWER: C

57. Opinion polling method refers to _______________.

A. executive polling method;
B. sales force polling method;
C. consumer intentions surveys;
D. all the three

ANSWER: C

58. The demand for labor slopes down and to the right because of _______________.

A. the law of demand
B. the iron law of wages
C. the law of diminishing marginal returns
D. economies of scale

ANSWER: C

59. Normal goods experience an increase in consumption when _______________.

A. real income increase
B. real income falls.
C. Price changes
D. .tastes change

ANSWER: D

60. The demand for a good is price inelastic if ___________________.

A. the price elasticity is one.
B. the price elasticity is less than one.
C. the price elasticity is greater than one.
D. zero

ANSWER: B

61. A demand curve with unitary elasticity at all points is __________________.

A. a straight line
B. a parabola
C. a hyperbola
D. convex to the origin

ANSWER: C

62. Supply is a function of ———–

A. Income.
B. Advertisement
C. Consumers
D. Price

ANSWER: D

63. Passive factor of production is ________________.

A. Only land.
B. Only capital.
C. . Both land and capital
D. Neither land nor capital

ANSWER: C

64. ——– Economies views on reducing the Production costs

A. Internal
B. Inventory
C. Pecuniary
D. External

ANSWER: D

65. Which of the following are not related with factors of production (FOP)

A. Land
B. Capital
C. Raw material
D. Labour

ANSWER: C

66. Which factor of production is considered as fixed input?

A. Labour
B. Technology
C. Capital
D. Land

ANSWER: D

67. ———– is the remuneration for organization

A. Rent
B. Wages
C. Interest
D. Profit

ANSWER: D

68. In the Law of Variable Proportion when TP is Maximum then the MP = —————-

A. MP = 1
B. MP < 0

C. MP = 0

D. MP > 1

ANSWER: C

69. When the output increases in the same proportion as the increase in input it is ————–Returns.

A. Constant
B. Average
C. Decreasing
D. Increasing

ANSWER: A

70. Cobb Douglas production function mainly studies —————?

A. Capital & labour
B. Labour & Entrepreneur
C. Land & Labour
D. Land & capital

ANSWER: A

71. Marginal cost is defined as

A. Change in total cost due change in output.
B. Total cost divided by output
C. change in output due to a one unit change in an input
D. Total product divided by the quantity of input

ANSWER: A

72. The cost with which the concept of marginal cost is closely related

A. Variable cost
B. Fixed cost
C. Opportunity cost
D. Economic Cost

ANSWER: A

73. Opportunity Cost is also Known as —————

A. outlay cost
B. Sunk Cost
C. Alternative Cost
D. Total Cost

ANSWER: C

74. The vertical difference between TVC and TC is equal to ————

A. MC
B. AVC
C. TFC
D. None

ANSWER: C

75. The costs that depend on output in the short run are _____________.

A. . total variable costs only.
B. both total variable costs and total costs.
C. total costs only.
D. total fixed cost only

ANSWER: A

76. The rate at which a firm can substitute capital for labour and hold output constant is the_____.

A. marginal rate of production
B. law of diminishing marginal returns
C. marginal rate of factor substitution
D. isoquant

ANSWER: C

77. A graph showing all the combinations of capital and labour available for a given total cost is the______________.

A. isoquant
B. budget constraint
C. isocost line
D. expenditure set

ANSWER: A

78. The formula for average fixed costs is __________________.

A. TFC/Q
B. DQ/DFC.
C. Q/TFC.
D. TFC _ Q

ANSWER: A

79. The formula for average variable cost (AVC) is __________________.
A. DQ/DTVC.
B. . DTVC/DQ.
C. TVC/Q.
D. Q/TVC.

ANSWER: C

80. Implicit costs are ________________.

A. equal to total fixed costs.
B. comprised entirely of variable costs.
C. payments for self-employed resources
D. always greater in the short run than in the long run

ANSWER: C

81. If a firm’s revenues just cover all its opportunity costs, then ________________.

A. normal profit is zero.
B. economic profit is zero.
C. total revenues equal its explicit costs.
D. total revenues equal its implicit costs.

ANSWER: A

82. The short run is a time period in which ____________________.

A. all resources are fixed.
B. the level of output is fixed.
C. the size of the production plant is variable.
D. some resources are fixed and others are variable.

ANSWER: A

83. Variable costs are __________________.

A. sunk costs. .
B. multiplied by fixed costs.
C. costs that change with the level of production
D. defined as the change in total cost resulting from the production of an additional unit of
output.

ANSWER: C

84. Opportunity cost of a factor of production with specific use is ____________.

A. very high
B. infinite
C. zero
D. constant

ANSWER: C

85. Incremental cost is closely related to _____________.

A. average cost. .
B. marginal cost
C. total cost
D. fixed cost.

ANSWER: B

86. When inputs are increased in a given proportion and output increases in a greater proportion, the returns to scale said to be—————

A. Constant returns to scale
B. Increasing returns to scale
C. Decreasing retuns to scale
D. None

ANSWER: B

87. Money paid to unskilled labour is called

A. Wages
B. Salary
C. Royalty
D. None

ANSWER: A

88. Which of the following curve is not U-shaped?

A. AVC
B. AFC
C. AC
D. MC

ANSWER: B

89. Off all the factors of production given below, which one is perishable in nature
____________.

A. labour.
B. land
C. capital
D. entrepreneurship

ANSWER: A

90. An isoquant is ________________.

A. least cost combination of inputs.
B. combination that gives rise to same level of output provided the firm is minimizing production cost.
C. locus of input combinations of factor inputs which firm can buy with a given outlay and factor prices.
D. factors unchanged

ANSWER: B

91. Internal economies of scale may not arise due to _______________.

A. division of labour
B. vertical integration
C. bulk purchases
D. high cost.

ANSWER: D

92. Opportunity cost is a term which describes ________________.

A. a bargain price for a factor of production
B. costs related to an optimum level of production.
C. variable costs
D. cost of one product in terms of production of others forgone

ANSWER: D

93. Marginal cost curve cuts the average cost curve _____________.

A. at the left of its lowest point
B. at its lowest point
C. at the right of its lowest point
D. at its highest point

ANSWER: B

94. Marginal cost means ______________.

A. Situational cost. .
B. addition to the total cost.
C. multiplication to the total cost
D. variable cost

ANSWER: B

95. The marginal product equals the average product when the latter is _______________.

A. Halfof its maximum value
B. quarter of its maximum value
C. equals to its maximum value
D. equals to its minimum value

ANSWER: D

96. In case of oligopoly, number of firms is

A. larger
B. Infinite
C. One
D. Few

ANSWER: D

97. A distinguishing characteristic of monopolistic competition is

A. Large number of firms
B. Low entry barriers
C. Product standardization
D. Product differentiation

ANSWER: D

98. In case of perfect competition, no of selling firm would be

A. Large
B. Single
C. Varied but too many
D. None of the above

ANSWER: A

99. If firms can neither enter nor leave an industry, the relevant time period is the

A. Short run
B. Intermediate run
C. Long run
D. Immediate run

ANSWER: A

100. Which of the following is a characteristic of a perfectly competitive market?

A. Firms are price setters.
B. There are few sellers in the market.
C. Firms can exit and enter the market freely.
D. All of the above are correct.

ANSWER: C

101. Imperfect competition was introduced by :-

A. Marshall
B. Chamberlin
C. Keynes
D. None of these

ANSWER: B

102. In case of Monopoly, a firm in long run can have

A. Loss
B. Profit
C. Super normal profit
D. All of above

ANSWER: D

103. In Perfect Competition equilibrium is attained when ———

A. AR = AC
B. TR = TC
C. MR = MC
D. Q = P

ANSWER: C

104. Kinked demand curve is associated with _______________.

A. cournot
B. .chamberlain
C. .edgeworth
D. sweezy

ANSWER: D

105. The important difference between perfect competition and monopolistic competition is that monopolistic competitor’s _________________.

A. .Do not try to maximize profits.
B. .Have an inelastic demand curve facing them.
C. Worry about their influence on the market.
D. .Sell similar but not identical products

ANSWER: D

106. The upper portion of the kinked demand curve is relatively

A. More inelastic
B. More elastic
C. Less elastic
D. Less inelastic

ANSWER: B

107. Concentration of monopoly is implemented under

A. FERA
B. MRTP
C. FEMA
D. None

ANSWER: B

108. Which of the following is a characteristic of pure monopoly?

A. One Seller Of The Product
B. Low Barriers To Entry
C. Close Substitute products
D. perfect information

ANSWER: A

109. Cartel is a part of

A. Monopoly
B. Oligopoly
C. Duopoly
D. Perfect Competition

ANSWER: B

110. Which method is better in measuring the national income

A. Expenditure census method
B. Social accounting method
C. Opportunity method
D. Incremental method

ANSWER: A

111. How to calculate per capita income.

A. National income /Total population
B. National income /Total Employed population
C. National income /Total personal Income- Commercial
D. All the above

ANSWER: A

112. In perfectly inelastic, demand curve will be

A. Horizontal Straight line
B. Vertical line
C. Rectangular hyperbola
D. None

ANSWER: B

113. In relatively inelastic, demand curve will be

A. Horizontal Straight line
B. Vertical line
C. Steeper
D. Flatter

ANSWER: C

114. Deductive method explains things from

A. General to particular
B. Particular to General
C. Both
D. None

ANSWER: A

115. The monopolist can fix any price for his product, but cannot determine ——for his product.

A. Revenue
B. Cost
C. Suppy
D. Demand

ANSWER: D

116. The primary objective for discriminating monopolist is

A. Loss minimization
B. Profit maximization
C. To cover production cost
D. All the above

ANSWER: B

117. A monopolistic competitive firm sells ——— products

A. Differentiated
B. Homogenous
C. All of the above
D. None

ANSWER: A

118. Selling expenses includes, which of the following ——- (i) advertisment cost (ii)
Transportation Cost(iii) offer discount to customers (iv) incentive to dealers.

A. (i) only
B. (i) (ii) and (iv)
C. (i) (iii) and (iv)
D. None

ANSWER: C

119. A firm shut-down point is reached when:

A. average revenue fails to cover average total cost
B. average revenue fails to cover average variable cost.
C. average revenue fails to cover average fixed cost
D. average fails to cover marginal cost

ANSWER: B

120. In a perfectly competitive market, the firm will be ________________.

A. a price maker
B. .attempting to maximise profits
C. producing a product which will be different from its competitors
D. a price taker

ANSWER: D

121. In an Oligopolistic market, there are ________________.

A. .a large number of sellers and few buyers
B. few sellers and few buyers
C. few sellers and a large number of buyers
D. only one seller

ANSWER: B

122. Which one is not collusive oligopoly ___________________.

A. price leadership
B. market-sharing cartel
C. .price discrimination
D. price fixing cartel

ANSWER: B

123. Equilibrium implies a state of ________________. .

A. rest
B. inactivity
C. absence of motion
D. movement

ANSWER: A

124. A monopolistic firm will expand its output when ________________.

A. marginal revenue exceeds marginal cost .
B. .marginal cost exceeds marginal revenue.
C. marginal cost equals marginal revenue.
D. marginal revenue is negative

ANSWER: A

125. A monopolist will never produce at a point where ____________________.

A. demand is price-inelastic.
B. demand is price-elastic.
C. .MC is positive.
D. Marginal cost is increasing

ANSWER: D

126. . Dynamic Theory of profit given by

A. J.B.Clark
B. Hawley
C. .Schumpeter
D. .J.S.Mill

ANSWER: A

1.Net exports are always?
(a) Positive
(b) Negative
(c) Balance
(d) None of these@

2. if all the firms have same costs, then the price will be agreed at?

a) oligopoly level
b) perfect competition@
c) monopoly level
d) none of these

3.The firm’s profit will be maximum when its?

(a) Marginal cost is greater than marginal revenue
(b) Marginal revenue is greater than marginal cost
(c) Marginal cost is equal to marginal revenue@
(d) Both (a) and (b)

4.When Slope of the Aggregate Expenditure Curve increases; (Keynesian Cross model)?

(a) National Income will increase@
(b) National Income will decrease
(c) There will be recessionary gap
(d) There will be inflationary gap

5.how many types of trade cycle??

a. 2; b.3; c.4;@ d.5

6.The investment demand curve is always:

(a) Negatively sloped@
(b) Positively sloped
(c) Vertical
(d) Horizontal

7.Real interest rate is:

(a) Interest rate divided by prices
(b) Interest rate divided by inflation
(c) Interest rate minus inflation@
(d) Interest rate plus inflation

8.Macroeconomics is the study of ___________________

A) individual building blocks in the economy
B) the relationship between different sectors of the economy
C) household purchase decisions
D) the economy as a whole@

9.foreign goods become cheaper when exchange rate

a) rises
b) falls@
c) remains same
d) none of the above

10.Inflation can be best defined as?

I: goods are in short supply
II: annual increase in general price level @
III: increase in input prices
IV: none of them

11.Economics is the study of?

A) production technology
B) consumption decisions
C) how society decides what, how, and for whom to produce@
D) the best way to run society

12.The law of demand states that?

a. as the quantity demanded rises, the price rises
b. as the price rises, the quantity demanded rises
c. as the price rises, the quantity demanded falls@
d. as supply rises, the demand rises

13.International Development Association (IDA) is called the ‘soft’ window of the World
Bank (WB) because?

a) it lends for software and It development
b) taking loans from it is very easy
c) its loans are interest free@
d) none

14.The value of marginal propensity to consume is always?

I: less than 0
II: greater than 1
III: equal to 1
IV: less than or equal to 1@

15.Nobel Prize for Economics was instituted in the year?

I: 1901 II: 1936 III: 1957 IV: 1968@

16.when exchange rate rises, exports will

a) decreases
b) increases@
c) remains same
d) none

17.Which economist is famous for his theory of comparative advantage?

a) Karl Marx
b) John Maynard Keynes
c) F. Hayek
d) David Ricardo@.

18.The fundamental economic problem faced by all societies is:

a. unemployment
b. inequality
c. poverty
d. scarcity@

19. Gini coefficient having value= 1 represents

a) perfect inequality@
b) perfect equality
c) less equality
d) none of the above

20. if any increase in population can raise per capita income is said to be?

a) over population b) under population@ c) optimum population d) all of them

21.The country which adopted Gold standard first

a)U.K@
b)U.S.A
c)France
d)Germany

22.Absolute Advantage theory given by

a)David ricardo
b)Adam smith@
c)A.C pigu
d)Bertil ohlin

23.Which of the following is the basic characteristic of Oligopoly?

a) a few sellers, one buyer
b) a few sellers, many buyers@
c) a few sellers, a few buyers
d) many sellers, few buy

24.Shadow prices are

a) market prices@
b)Real prices
c)International prices
d)None of the aboveers

25.Countries or states which impose no tax or very low tax is called as

a) Tax terrorism
b) Tax Heavens@
c) Tax Keepers
d) Tax generators

26..The term ‘narrow banking’ is best described as ?

a) banks acting only as payment banks
b) banking by non-banking financial companies
c) limited areas of operation by banks
d) banks lending only to risk free sectors@

27.In the terminology of economics and money demand, the terms M1 and M2 are also known as?

a) Short money
b) Long money
c) Broad money
d) Narrow money@

28.passive factor is?

a) land @ b) labor c) capital d) organization

Micro economic theory is also known as —————–?

A. Business Theory
B. Price Theory@
C. Individual Theory
D. Cost theory

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