MCQ on Economics : Economics is the social science that studies how individuals, businesses, governments, and societies allocate their limited resources to satisfy their unlimited wants and needs. It encompasses the analysis of the production, distribution, and consumption of goods and services. At its core, economics explores the choices people make in a world with finite resources, aiming to understand the factors influencing those decisions and their impact on the overall well-being of individuals and communities.
Also See – MCQ on General Science
MCQ on Economics
1. What is the primary purpose of monetary policy?
A) Control inflation
B) Control unemployment
C) Regulate exchange rates
D) All of the above
Answer: D) All of the above
2. Which of the following is not a factor of production?
A) Land
B) Labor
C) Money
D) Capital
Answer: C) Money
3. What does GDP stand for?
A) Gross Domestic Product
B) General Domestic Price
C) Global Development Plan
D) Gross Demand Projection
Answer: A) Gross Domestic Product
4. In a perfectly competitive market, what is the shape of the demand curve faced by a single firm?
A) Upward-sloping
B) Downward-sloping
C) Horizontal
D) Vertical
Answer: C) Horizontal
5. What is the law of diminishing marginal utility?
A) The more you consume, the more satisfaction you get
B) The less you consume, the more satisfaction you get
C) The additional satisfaction from consuming one more unit decreases as consumption increases
D) The additional satisfaction from consuming one more unit remains constant
Answer: C) The additional satisfaction from consuming one more unit decreases as consumption increases
6. What does the term “opportunity cost” refer to?
A) The explicit cost of production
B) The cost of forgoing the next best alternative when making a decision
C) The total cost of production
D) The variable cost of production
Answer: B) The cost of forgoing the next best alternative when making a decision
7. Which of the following is a fiscal policy tool used by governments to stimulate economic activity during a recession?
A) Contractionary monetary policy
B) Increasing taxes
C) Decreasing government spending
D) Expansionary fiscal policy
Answer: D) Expansionary fiscal policy
8. What is the formula for calculating the unemployment rate?
A) (Number of unemployed / Labor force) x 100
B) (Number of employed / Labor force) x 100
C) (Labor force / Number of unemployed) x 100
D) (Number of unemployed – Labor force) x 100
Answer: A) (Number of unemployed / Labor force) x 100
9. What is the main function of the World Trade Organization (WTO)?
A) Monetary policy coordination
B) Environmental conservation
C) International trade regulation
D) Global health management
Answer: C) International trade regulation
10. What is the term used to describe a situation where the government spends more money than it collects in revenue?
A) Fiscal surplus
B) Fiscal deficit
C) Budget equilibrium
D) Budget surplus
Answer: B) Fiscal deficit