Economics Questions (MCQs) for Competitive Examinations
Economics Multiple Choice Questions (MCQs) for General Studies and GK preparation of SSC, NDA, CDS, UPSC, UPPSC and State PSC Examinations.
1. Which among the following is the branch of economics that deals with the performance, structure, and behavior of the economy of the entire community, either a nation, a region, or the entire world?
[A] Heterodox approaches
[B] Micro Economics
[C] Macro Economics
[D] All of the above
Show Answer
Correct Answer: C [Macro Economics]
Notes:
Macroeconomics is a branch of economics, which deals with how an economy functions on a large scale. It deals with the structure, and behavior of the economy of either a region, country or the whole world.
2. Which among the following bodies estimates the national income of India?
[A] Office of the Economic Advisor
[B] National Statistical Office (NSO)
[C] Central Statistical Office
[D] Ministry of Finance
Show Answer
Correct Answer: B [National Statistical Office (NSO)]
Notes:
India’s national income and related macroeconomic estimates are now compiled by the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation. The earlier Central Statistical Office (CSO) was merged with the National Sample Survey Office in 2019 to form the NSO.
3. If a commodity has more number of substitutes, the demand for this commodity will be _______?
[A] more elastic
[B] less elastic
[C] inelastic
[D] perfectly elastic
Show Answer
Correct Answer: A [more elastic]
Notes:
Substitute goods are those goods which can be used in place of each other. Examples of substitute goods are : tea and coffee; ghee and edible oil. In case of substitute goods like tea and coffee, demand for a commodity falls with a fall in the price of other substitute goods.
4. Which among the following is used for a situation of “Too much money chasing too few goods?
[A] Demand Pull Inflation
[B] Cost pull inflation
[C] Stagflation
[D] Hyperinflation
Show Answer
Correct Answer: A [Demand Pull Inflation]
Notes:
Demand-pull inflation refers to the inflation from rapid growth in aggregate demand and when excess demand causes ‘too much money chasing too few goods.’ This generally happens when an economy is growing at a faster rate.
5. A monopolist will be able to maximize his profits when _________?
[A] His output is maximum
[B] He charges a Higher price
[C] His average cost is minimum
[D] His marginal cost is equal to the marginal revenue
Show Answer
Correct Answer: D [His marginal cost is equal to the marginal revenue]
Notes:
A monopolist can maximize profits when the marginal cost is equivalent to the marginal revenue. This strategy is implemented because the greatest profit occurs at the output level where the difference between total revenue and total cost is the greatest. This ensures economic efficiency and profit gains for the monopolist.
6. In economy, which among the following can be measured by calculating concentration ratios?
[A] Devlopment
[B] Inflation
[C] Competition
[D] Social Security
Show Answer
Correct Answer: C [Competition]
Notes:
Competition is generally measured by calculating concentration ratios. Concentration ratios indicate whether an industry consists of a few large firms or many small firms. Two of the most commonly used metrics are the Herfindahl Hirschman Index (HHI) and the N-firm concentration ratio.
7. Which of the following ministries is responsible for calculating GDP in India?
[A] Ministry of Finance
[B] Ministry of Commerce and Industry
[C] Ministry of Central Statistical and Program Implementation
[D] Ministry of consumer Affairs
Show Answer
Correct Answer: C [Ministry of Central Statistical and Program Implementation]
Notes:
The work of computing the GDP is done by the Central Statistical Organization (CSO) which is under the Ministry of Statistical and Program Implementation. It is is responsible for macroeconomic data gathering and statistical record keeping.
8. Which of the following is the movement along the supply curve?
[A] Curve Supply
[B] Contraction of supply
[C] Expansion of supply
[D] Expansion and contraction of supply
Show Answer
Correct Answer: D [Expansion and contraction of supply]
Notes:
When the price of a commodity increases its quantity supplied also increases it is called the extension of supply. In opposite process, when the price of commodity decreases, the quantity supplied of it also decreases it is called the contraction of supply. It leads to the law of supply.
9. Which of the following curves represents the demand of all consumers in the market taken together at different levels of the price of the good?
[A] Monotonic
[B] Indifferent
[C] Market demand
[D] Diminishing
Show Answer
Correct Answer: C [Market demand]
Notes:
The market demand curve is the summation of all the individual demand curves in a given market. It shows the quantity demanded of the good by all individuals at varying price points.
10. Which among the following is an example of micro-economic variable?
[A] National Income
[B] Consumer’s Equilibrium
[C] Aggregate Supply
[D] Employment
Show Answer
Correct Answer: B [Consumer’s Equilibrium]
Notes:
Microeconomic variables are those patterns or elements that can be used to describe the behavior of a person or an individual economic unit, like a business. Eg. Consumer’s Equilibrium.
