MCQs on Basic Economics

Last Updated : 29 Aug, 2022

In exams like SSC, Banking, Railways, and others, we find many questions from the General Awareness section. Economics topics are considered one of my favorites. Here topic-wise practice questions have been provided so that students can be able to practice more and more and get most of the questions correct in this section. In this article, we will provide 20 questions from the Micro and Macro Economics section.

Micro & Macro Economics

Que1. What does the term “Incentive” mean?
(A) It is the opposite of a tradeoff.
(B) It could be a reward but could not be a penalty.
(C) It could either be a reward or a penalty.
(D) It could be a penalty but could not be a reward.

Answer: (C) Could either be a reward or a penalty
Explanation: The term incentive is defined as the bonus or the penalty paid to/by the person to stimulate the greater output.

Que.2 The most fundamental economic problem is…..
(A) Security
(B) European countries buy more goods from foreigners than supply to foreigners
(C) health
(D) Scarcity

Answer: (D) Scarcity
Explanation: Scarcity is the most fundamental economic problem. Scarcity means the demand for a resource is greater than the supply of that resource, as resources are limited.

Que3. The study of determining the prices in individual markets is called…
(A) negative economics
(B) microeconomics
(C) positive economics
(D) macroeconomics

Answer: (B) Microeconomics.
Explanation: Microeconomics is referred to as the study of determining the prices in individual markets.

Que4. Economics is the study of:

(A) the distribution of surplus goods to those in need.
(B) affluence in a morally bankrupt world.
(C) ways to reduce want to eliminate the problem of scarcity.
(D) the choices we make because of scarcity.

Answer: (D) The choices we make because of scarcity
Explanation: Economics is the study of scarcity and its implications for the use of resources, production of goods and services, and growth of production.

Que5. Which of the following is a macroeconomic problem?

(A) What do plumbers earn more than janitors
(B) the reasons for the increase in average prices
(C) whether the army should buy more tanks or more missiles
(D) the reasons for the increase in the price of orange juice

Answer: (B) The reasons for the rise in average prices.
Explanation: the rise in average prices of goods is a macroeconomic problem.

Que6. Which of the following is a microeconomic problem?
(A) the reasons why average prices are falling
(B) the reasons Kathy is buying less orange juice
(C) the reason why overall employment may fall
(D) the impact of the government budget deficit on inflation

Ans: (B) the reasons Kathy buys less orange juice.
Explanation: Microeconomic problem referred to why Kathy is buying less orange juice.

Que7. Microeconomics includes all of the following EXCEPT.
(A) the effect of increasing the money supply on inflation
(B) the purchasing decisions of an individual consumer
(C) the effect of an increase in cigarette tax on cigarette sales
(D) the hiring decisions a firm makes

Answer: ( A) the effect of increasing the money supply on inflation.
Explanation: All except the effect of increasing the money supply on inflation is a microeconomic problem.

Que8. Which of the following explains the difference between microeconomics and macroeconomics?
(A) microeconomics studies the impact of government taxes on the national unemployment rate
(B) macroeconomics studies the impact of government regulation and taxes on the price of individual commodities and services while microeconomics does not
(C) use different sets of tools and ideas
(D) microeconomics studies the decisions of individuals and firms and macroeconomics studies the entire economy

Answer: (D) microeconomics studies the decisions of individuals and firms and macroeconomics studies the entire economy
Explanation: microeconomics studies the decisions of individuals and Businesses and Macroeconomics examines the entire national economy.

Que9. Which of the following given agencies has published “expected loss-based ratings”?
(A) RBI
(B) SEBI
(C) PFRDA
(D) IRDAI

Answer: (B) SEBI
Explanation: SEBI published “expected loss-based ratings”.

Que10. Macroeconomics is the branch of economics that deals with:
(A) the prices of individual goods
(B) important rather than trivial issues
(C) how individual markets work
(D) the economy as a whole

Answer: (D) The economy as a whole
Explanation: Macroeconomics deals with the economy as a whole.

Que11. Macroeconomic issues include:
(A) the impact of government regulation on markets
(B) total employment nationwide
(C) studying what factors affect the price and quantity of automobiles
(D) studying the regulation of wages and production costs in the software industry

Answer: (B) Total employment nationwide
Explanation: Total employment at the national level falls under macroeconomic issues.

Que 12. Keynesian economics is primarily focused on
(A) national income
(B) company balance
(C) resource allocation
(D) All of the above

Ans. (A) national income
Explanation: Keynesian economics is primarily focused on national income.

Que13. Which of the given options would be studied in a microeconomics course?
(A) How an increase in the tax rate affects the overall performance
(B) Comparison of inflation rates between countries
(C) How a trade agreement between the United States and Mexico affects both nations’ unemployment rates
(D) Impact of rental roofs on the housing supply

Answer: (D) Influence of rental roofs on the housing supply.
Explanation: The influence of rental roofs on the housing supply can be studied the in microeconomics course.

Que14. The term “National income” refers to the?

(A) total employment
(B) total unemployment
(C) global employment
(D) local employment

Ans. (A) Total employment
Explanation: National income is equal to the total employment of nationals of a country.

Que15. What does RBC stand for?

(A) Random Business Cycle
(B) Rational Business Cycle
(C) Revolutionary Business Cycle
(D) Real Business Cycle

Ans. (D) Real Business Cycle
Explanation: The term RBC in economics stands for Real Business Cycle.

Que16. ‘The General Theory of Employment, Interest, and Money is a famous book written by which among the following?
(A) J.M. Keynes
(B) Robert Sahhlas
(C) Wassily Leontief
(D) Paul Krugman

Ans. (A) J.M. Keynes
Explanation: ‘The General Theory of Employment, Interest, and Money’ is a famous book written by J.M. Keynes, the famous economist.

Que17. Name the organization which publishes the Consumer Confidence Index
(A) SEBI
(B) NABARD
(C) State Bank of India
(D) RBI

Answer: (D) RBI
Explanation: The Reserve Bank of India conducts the consumer confidence survey and publishes an index in this regard.

Que18. What would be the growth rate of India in the financial year (2021-22) as per SBI research?
(A) 5.4 %
(B) 7.4 %
(C) 10.4%
(D) 11.4%

Answer: (C) 10.4%
Explanation: The SBI Research in its recent research report forecasted that India’s GDP would grow by 10.4% in the financial year 2021-22.

Que19. Which of the following given institutions founded the “Mobile Payment Forum of India”?
(A) IIT Bombay
(B) IIT Delhi
(C) IIT Chennai
(D) IIM Ahmedabad

Answer: (C) IIT Chennai
Explanation: Mobile Payment Forum of India (MPFI) is a think tank established with the joint initiative of the Institute for Development and Research in Banking Technology (IDRBT), Hyderabad, the Rural Technology Business Incubator (RTBI), IIT Madra

Que20. Which of the following constitutes the major share in India’s foreign exchange reserves?
(A) Gold
(B) Foreign Currency Assets
(C) SDR at IMF
(D) Reserve Position at IMF

Answer: (B) Foreign Currency Assets
Explanation: Based on data from RBI, India’s foreign exchange reserves increased by 835 million Dollars to a record $612.73 billion in the week ended July.