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.
31. Which of the following is correct for economic efficiency?
[A] Increase in economic acitivty in an economy
[B] Use of resources to maximize the production of goods and services
[C] Distribution of economic resources in fair and equitable manner
[D] Maximum usage of resources for maximum production of goods
Show Answer
Correct Answer: B [Use of resources to maximize the production of goods and services]
Notes:
Economic Efficiency is the use of resources so as to maximize the production of goods and services. Resources are scarce and there are unlimited wants so economic efficiency is key in development.
32. Which of the following correctly defines the Economic profit?
[A] Total revenue – Total cost
[B] Total cost – Total sold
[C] Total cost- Total revenue
[D] None of the above
Show Answer
Correct Answer: A [Total revenue – Total cost]
Notes:
Profit for any firm is the surplus of revenue over the total cost of production. It is the extra money generated over the cost of production.
Profit = Total Revenue – Total cost
33. What is the extra cost imposed by the government which increase the price for a customer is known as?
[A] Subsidy
[B] Tax
[C] Inflation
[D] Fine
Show Answer
Correct Answer: B [Tax]
Notes:
Tax is the cost imposed by the government over goods and services in an economy to generate revenue for the government for its expenditure. This includes capital as well as revenue expenditure.
34. Which among the following is not a part of factor of production?
[A] Land
[B] Labour
[C] Capital
[D] Wages
Show Answer
Correct Answer: D [Wages]
Notes:
The Factors of production are the inputs available to supply goods and services in an economy.
They are Land, Labour, Capital and Enterprise.
35. Which type of Economy is Indian Economy?
[A] Mixed
[B] Market
[C] Capitalist
[D] Socialist
Show Answer
Correct Answer: A [Mixed]
Notes:
Indian Economy is a mixed economy where both state and market play a key role in the management of economy. In India both the Public sector as well as the private sector coexist.
36. Which among the following is part of Macroeconomics?
[A] Investment of households
[B] Wages of a person
[C] How to produce good
[D] Aggregate economic activity
Show Answer
Correct Answer: D [Aggregate economic activity]
Notes:
Macroeconomics is a branch of economics that studies how an overall economy the market systems that operate on a large scale behaves. It deals with the performance, structure, behavior, and decision-making of an economy as a whole. Its features are Employment, national income, poverty etc.
37. Which organization calculates GDP in India?
[A] CSO
[B] NSSO
[C] Department of Economic Affairs
[D] ISO
Show Answer
Correct Answer: A [CSO]
Notes:
The Central Statistics Office (CSO), under the Ministry of Statistics and Program Implementation(MoSPI), is the responsible authority for macroeconomic data gathering and statistical record keeping. They publish the GDP
38. Which of the following is not a method of calculating National Income?
[A] Income method
[B] Expenditure method
[C] Output method
[D] Value method
Show Answer
Correct Answer: D [Value method]
Notes:The 3 methods used for calculating the national income are :
- Income method
- Output method or Product method
- Expenditure method
39. What is the difference between the Gross value added and Net value-added ?
[A] Value added
[B] Depreciation
[C] Production flow
[D] Investment
Show Answer
Correct Answer: B [Depreciation]
Notes:
Net value added = Gross value added – depreciation
40. What is the formula for GDP Deflater?
[A] Nominal GDP + Real GDP
[B] Nominal GDP – (minus) Real GDP
[C] Real GDP/ Nominal GDP
[D] Nominal GDP/ Real GDP
Show Answer
Correct Answer: D [Nominal GDP/ Real GDP]
Notes:
The GDP deflator measures price inflation in an economy.It measures the changes in prices for all of the goods and services produced in an economy. The GDP deflator is calculated by dividing nominal GDP by real GDP and multiplying by 100.
