Mcqs on economics

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Mcqs on economics

Looking to test your knowledge of economics? Look no further! This post features a set of multiple-choice questions (MCQs) on various topics in economics, including microeconomics, macroeconomics, international trade, and economic policies.

Whether you’re a student studying for an exam or just looking to refresh your understanding of economic concepts, these MCQs will provide you with a fun and challenging way to test your knowledge.

Each question is designed to be both informative and engaging, providing you with an opportunity to learn while having fun. From basic economic principles to more advanced topics, these MCQs cover a wide range of concepts and ideas.

So, if you’re ready to put your economic knowledge to the test, dive in and start answering these MCQs today!

Q1. Who is called the father of economics?

A. Ricardo

B. Malthus

C. Adam Smith

D. J. M. Keynes

C. Adam Smith

Q2. Which of the following is an example of a capital resource?

a) A hammer

b) A tree

c) A computer

d) A pencil

c) A computer

Q3. When the price of a good increases, what happens to the quantity demanded?

a) It increases

b) It decreases

c) It stays the same

d) It depends on the type of good

b) It decreases

Q4. In a market economy, who determines what goods and services will be produced?

a) The government

b) The consumers

c) The producers

d) The workers

b) The consumers

Q5. What is the name for the study of how people make decisions in the face of scarcity?

a) Microeconomics

b) Macroeconomics

c) Behavioural economics

d) Managerial economics

a) Microeconomics

Q6. What is the name for the measure of the overall level of prices in an economy?

a) Inflation

b) Deflation

c) Stagflation

d) Hyperinflation

a) Inflation

Q7. Which of the following is a characteristic of a monopoly?

a) There are many firms in the market

b) There are no barriers to entry

c) The firm has no control over the price of its product

d) The firm is the only seller of its product

d) The firm is the only seller of its product

Q8. Which of the following is an example of a public good?

a) Cable TV

b) A private beach

c) National defence

d) A luxury car

c) National defence

Q9. Which of the following is a key factor in determining a country’s standard of living?

a) The level of education of its citizens

b) Its political system

c) The number of natural resources it has

d) The size of its population

a) The level of education of its citizens

Q10. What is the name for the rate at which one currency can be exchanged for another?

a) Inflation rate

b) Exchange rate

c) Interest rate

d) GDP rate

b) Exchange rate

Q11. Which of the following is an example of a market externality?

a) A person smoking cigarettes in their own home

b) A company providing free health insurance to its employees

c) A factory polluting a nearby river

d) A restaurant offering a discount to senior citizens

c) A factory polluting a nearby river

Q12.Which of the following is an example of a non-renewable resource?

a) Wind power

b) Coal

c) Solar energy

d) Hydroelectric power

b) Coal

Q13. What is the name for the total value of all final goods and services produced in an economy in a given period of time?

a) Gross Domestic Product (GDP)

b) Gross National Product (GNP)

c) Net National Product (NNP)

d) National Income

a) Gross Domestic Product (GDP)

Q14. Which of the following is an example of a progressive tax?

a) Sales tax

b) Property tax

c) Income tax

d) Excise tax

c) Income tax

Q15. Which of the following is a characteristic of a perfectly competitive market?

a) There is only one firm in the market

b) There are many firms in the market

c) The firms can influence the price of the product

d) The firms have barriers to entry

b) There are many firms in the market

Q16. What is the name for the level of output at which a firm’s average total cost is minimised?

a) Marginal cost

b) Average fixed cost

c) Average variable cost

d) Minimum efficient scale

d) Minimum efficient scale

Q17. Which of the following is an example of a factor of production?

a) A book

b) A factory building

c) A computer software

d) A restaurant meal

b) A factory building

Q18. Which of the following is a type of unemployment that results from a lack of demand for labour?

a) Frictional unemployment

b) Structural unemployment

b) Cyclical unemployment

d) Seasonal unemployment

b) Cyclical unemployment

Q19. What is the name for the measure of the responsiveness of quantity demanded to changes in price?

a) Price elasticity of supply

b) Price elasticity of demand

c) Income elasticity of demand

d) Cross elasticity of demand

b) Price elasticity of demand

Q20. Which of the following is a function of money?

a) To regulate the economy

b) To generate wealth

c) To facilitate exchange

d) To provide government services

c) To facilitate exchange

Q21. Which of the following is an example of a regressive tax?

a) Income tax

b) Sales tax

c) Property tax

d) Corporate tax

b) Sales tax

MCQS on economics class 12

Q1. Which of the following is an example of a market-oriented economic system?

a) Command economy

b) Mixed economy

c) Traditional economy

d) Socialist economy

Answer: b) Mixed economy

Q2.In economics, the term “inflation” refers to:

a) A decrease in the overall level of prices

b) A stable price level

c) An increase in the overall level of prices

d) The absence of price changes

Answer: c) An increase in the overall level of prices

Q3. Which of the following is NOT a factor of production?

a) Labor

b) Capital

c) Entrepreneurship

d) Demand

Answer: d) Demand

Q4.The law of demand states that:

a) As price increases, quantity demanded decreases

b) As price increases, quantity demanded increases

c) As price decreases, quantity demanded remains constant

d) As price decreases, quantity demanded decreases

Answer: a) As price increases, quantity demanded decreases

Q5.Which of the following is a characteristic of a perfectly competitive market?

a) Many buyers and sellers

b) Product differentiation

c) Barriers to entry

d) Price control by a single firm

Answer: a) Many buyers and sellers

Q6.The term “GDP” stands for:

a) Gross Domestic Product

b) Gross Domestic Profit

c) Government Development Program

d) Government Debt Payment

Answer: a) Gross Domestic Product

Q7.Which of the following is NOT a fiscal policy tool?

a) Government spending

b) Taxation

c) Monetary policy

d) Transfer payments

Answer: c) Monetary policy

Q8.When the government spends more money than it collects in revenue, it results in a:

a) Budget surplus

b) Balanced budget

c) Budget deficit

d) Budget equilibrium

Answer: c) Budget deficit

Q9.The concept of “opportunity cost” is best defined as:

a) The total cost of producing a good or service

b) The cost of producing an additional unit of a good or service

c) The value of the next best alternative foregone

d) The price at which a good or service is sold in the market

Answer: c) The value of the next best alternative foregone

Q10.Which of the following is NOT a characteristic of a monopoly?

a) Single seller

b) Barriers to entry

c) Price control

d) Many substitutes available

Answer: d) Many substitutes available

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mcq on economics for competitive exam

Here are 10 multiple-choice questions on Economics for a competitive exam:

Q1.What is the term used to describe the study of how individuals and societies allocate their limited resources to satisfy their unlimited wants?

a) Microeconomics

b) Macroeconomics

c) Econometrics

d) Behavioral economics

Answer: a) Microeconomics

Q2.In economics, what does the abbreviation “GDP” stand for?

a) Gross Domestic Price

b) General Domestic Product

c) Gross Domestic Profit

d) Gross Domestic Product

Answer: d) Gross Domestic Product

Q3.What does the term “inflation” refer to?

a) Increase in the purchasing power of money

b) Decrease in the overall price level

c) Increase in the overall price level

d) Decrease in the unemployment rate

Answer: c) Increase in the overall price level

Q4.Which of the following is an example of a regressive tax?

a) Income tax

b) Property tax

c) Sales tax

d) Corporate tax

Answer: c) Sales tax

Q5.What is the main goal of monetary policy?

a) Promote economic growth

b) Control inflation

c) Reduce income inequality

d) Increase government spending

Answer: b) Control inflation

Q6.Which of the following is NOT a characteristic of a perfectly competitive market?

a) Many buyers and sellers

b) Homogeneous products

c) Barriers to entry

d) Perfect information

Answer: c) Barriers to entry

Q7.What is the opportunity cost of a decision?

a) The monetary cost of the decision

b) The time spent on making the decision

c) The value of the best alternative foregone

d) The benefit gained from the decision

Answer: c) The value of the best alternative foregone

Q8.Which of the following is an example of a public good?

a) Cable television service

b) Private healthcare

c) Public park

d) Restaurant meal

Answer: c) Public park

Q9.What is the formula to calculate the unemployment rate?

a) (Number of employed workers / Total population) x 100

b) (Number of unemployed workers / Labor force) x 100

c) (Gross domestic product / Population) x 100

d) (Total income / Total population) x 100

Answer: b) (Number of unemployed workers / Labor force) x 100

Q10.Which of the following is an example of a fiscal policy tool?

a) Interest rates

b) Government spending

c) Reserve requirements

d) Open market operations

Answer: b) Government spending

What is inflation and how does it impact the economy?

Inflation refers to the sustained increase in the general price level of goods and services over time. It can impact the economy by eroding the purchasing power of individuals, reducing consumer spending, affecting business profitability, and distorting economic decision-making.

What are the factors that contribute to economic growth?

Several factors contribute to economic growth, including investment in physical and human capital, technological advancements, access to resources and infrastructure, political stability, favorable government policies, efficient financial systems, and a skilled workforce.

What is fiscal policy and how does it influence the economy?

Fiscal policy refers to the government’s use of taxation and spending to influence the economy. By adjusting tax rates and government spending levels, policymakers can aim to stimulate or slow down economic growth, manage inflation, reduce unemployment, and promote long-term economic stability.

What is the role of monetary policy in the economy?

Monetary policy involves the management of the money supply, interest rates, and credit conditions by a central bank. It plays a crucial role in influencing economic activity, controlling inflation, and promoting price stability. Through actions such as adjusting interest rates or implementing quantitative easing, central banks can influence borrowing costs, spending levels, and overall economic conditions.

How does international trade impact the economy?

International trade plays a significant role in the economy by facilitating the exchange of goods and services between countries. It can lead to economic growth by expanding markets, promoting specialization and efficiency, increasing competition, and providing consumers with a wider range of choices. However, trade imbalances, protectionism, and currency fluctuations can also pose challenges to the economy.

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