Economic is one of the important part of the syllabus of the any government exam in India, exams may include SSC JKSSB JKPSC economic subject has important role in the marks distribution in all exams around 7 to 8 questions are directly asked from the economic basic and banking sectors to give you the clear understanding about this topic we have designed a bunch of 25 most important questions on the economics. By practicing these 25 MCQs on economics, to can check your knowledge, and your concepts will become clear very well, and you will be able to excel in the examination
1. What is the study of how individuals and societies use limited resources to satisfy unlimited wants called?
A) Sociology
B) Political Science
C) Economics
D) Psychology
Correct Answer: C) Economics
2. What is the name of the branch of economics that deals with the study of the behavior of individual consumers and firms in making decisions?
A) Macroeconomics
B) Microeconomics
C) Econometrics
D) Development Economics
Correct Answer: B) Microeconomics
3. The total value of all goods and services produced within a country’s borders in a year is known as what?
A) Gross National Product
B) Net National Product
C) Gross Domestic Product
D) National Income
Correct Answer: C) Gross Domestic Product
4. Inflation in an economy means what kind of change in general price levels?
A) Decrease
B) Increase
C) No change
D) Deflation
Correct Answer: B) Increase
5. What term describes a prolonged period of falling economic activity and rising unemployment?
A) Boom
B) Recession
C) Inflation
D) Stagflation
Correct Answer: B) Recession
6. Which policy involves government spending and taxation decisions to influence the economy?
A) Monetary policy
B) Fiscal policy
C) Trade policy
D) Industrial policy
Correct Answer: B) Fiscal policy
7. The Reserve Bank of India uses which tool to control the money supply by influencing interest rates?
A) Open Market Operations
B) Cash Reserve Ratio
C) Repo Rate
D) Fiscal Deficit
Correct Answer: C) Repo Rate
8. What is the term for the cost of the next best alternative foregone when making a choice?
A) Opportunity cost
B) Fixed cost
C) Variable cost
D) Marginal cost
Correct Answer: A) Opportunity cost
9. Which of the following curves shows the exact relationship between the price and quantity demanded for a product?
A) Supply curve
B) Demand curve
C) Production possibility curve
D) Phillips curve
Correct Answer: B) Demand curve
10. Which among the following statements gives the correct idea about the law of demand?
A) Price and demand move in the same direction
B) Price and demand are unrelated
C) Price and demand move in opposite directions to each other
D) Price has absolutely no effect on demand
Correct Answer: C) Price and demand move in opposite directions to each other
11. What is the primary objective of a monopolistic firm in the market?
A) Maximize social welfare
B) Maximize profits
C) Maximize production
D) Maximize employment
Correct Answer: B) Maximize profits
12. The term ‘GDP deflator’ is used to measure what in an economy?
A) Inflation rate
B) Unemployment rate
C) Interest rate
D) Exchange rate
Correct Answer: A) Inflation rate
13. Name the branch of the economy that is mainly involved in the extraction of natural resources.
A) Primary sector
B) Secondary sector
C) Tertiary sector
D) Quaternary sector
Correct Answer: A) Primary sector
14. What is a budget deficit in economic terms?
A) When government revenue exceeds expenditure
B) When government expenditure exceeds revenue
C) When exports exceed imports
D) When imports exceed exports
Correct Answer: B) When government expenditure exceeds revenue
15. Name the economist who introduced the concept of the ‘invisible hand’
A) John Maynard Keynes
B) Adam Smith
C) Karl Marx
D) David Ricardo
Correct Answer: B) Adam Smith
16. Name the type of unemployment generated due to the reason of a mismatch between skills and jobs available.
A) Cyclical unemployment
B) Structural unemployment
C) Frictional unemployment
D) Seasonal unemployment
Correct Answer: B) Structural unemployment
17. What is the economic term for a general slowdown in economic activity across the economy?
A) Inflation
B) Recession
C) Depression
D) Stagflation
Correct Answer: B) Recession
18. Which of the following is a direct tax imposed on individual or corporate income?
A) Sales tax
B) Excise duty
C) Income tax
D) Customs duty
Correct Answer: C) Income tax
19. What does ‘FDI’ stand for in economics?
A) Foreign Debt Investment
B) Foreign Direct Investment
C) Fiscal Debt Index
D) Financial Domestic Income
Correct Answer: B) Foreign Direct Investment
20. The balance of trade refers to the difference between the value of a country’s exports and what.
A) Imports
B) Taxes
C) Domestic production
D) Currency reserves
Correct Answer: A) Imports
21. What is the term for the government’s total revenue minus total expenditure in a fiscal year?
A) Fiscal deficit
B) Budget surplus
C) National debt
D) Balance of payments
Correct Answer: B) Budget surplus
22. The relationship shown by the Phillips curve is between inflation and which other economic factor?
A) Economic growth
B) Unemployment
C) Interest rates
D) Exchange rates
Correct Answer: B) Unemployment
23. Which economic indicator measures changes in the price level of a basket of consumer goods and services?
A) Producer Price Index
B) Consumer Price Index
C) Wholesale Price Index
D) Gross Domestic Product
Correct Answer: B) Consumer Price Index
24. What is the function of the Central Bank in a country’s economy?
A) Control fiscal policy
B) Issue currency and regulate the money supply
C) Collect taxes
D) Manage government spending
Correct Answer: B) Issue currency and regulate money supply
25. The term ‘marginal cost’ refers to the cost of producing how many additional units of a good?
A) One extra unit
B) Ten extra units
C) Fifty extra units
D) One hundred extra units
Correct Answer: A) One extra unit
