50 MCQs on Economics Topics
1. What is the main cause of poverty in developing countries?
A. Lack of natural resources
B. Corruption
C. Low productivity
D. Climate change
2. Which measure is commonly used to determine poverty?
A. Inflation rate
B. Gini coefficient
C. Poverty line
D. GDP
3. What is 'absolute poverty'?
A. Poverty in relation to others
B. Lack of basic necessities
C. Seasonal poverty
D. Urban poverty
4. Which organization publishes global poverty statistics?
A. UNICEF
B. World Bank
C. WTO
D. IMF
5. What does the poverty gap indicate?
A. Income inequality
B. Severity of poverty
C. Wealth distribution
D. Employment gap
6. Which of the following is a social consequence of poverty?
A. Lower taxes
B. Improved healthcare
C. High crime rate
D. Increased savings
7. Which type of poverty is measured over time?
A. Relative poverty
B. Absolute poverty
C. Chronic poverty
D. Seasonal poverty
8. Poverty alleviation programs are aimed at:
A. Increasing exports
B. Providing subsidies to rich
C. Improving income and employment
D. Boosting luxury spending
9. What is meant by below poverty line?
A. Earning above national average
B. Earning less than a minimum income
C. Being unemployed
D. None
10. Which one is not a cause of poverty?
A. Unemployment
B. Education
C. Low wages
D. Overpopulation
11. Microfinance is a tool used to:
A. Control inflation
B. Promote small businesses
C. Reduce taxes
D. Improve foreign trade
12. The term 'vicious circle of poverty' means:
A. Poverty is self-sustaining
B. Poverty leads to inflation
C. Inflation causes poverty
D. None
13. Poverty can be reduced by:
A. Increasing luxury imports
B. Providing education and skills
C. Raising interest rates
D. Cutting health budget
14. Unemployment occurs when:
A. People work part-time
B. People work overtime
C. People willing to work can't find jobs
D. People retire
15. Which type of unemployment is due to economic downturn?
A. Frictional
B. Cyclical
C. Seasonal
D. Structural
16. Inflation is defined as:
A. Rise in GDP
B. Fall in prices
C. Sustained increase in prices
D. Increase in imports
17. What is stagflation?
A. Inflation with low growth
B. Inflation with high growth
C. Deflation with recession
D. None
18. The natural rate of unemployment includes:
A. Zero unemployment
B. Only cyclical unemployment
C. Frictional and structural unemployment
D. All types
19. Hyperinflation refers to:
A. Moderate inflation
B. Very low inflation
C. Extremely high inflation
D. Zero inflation
20. Which index is used to measure inflation?
A. Sensex
B. Consumer Price Index
C. Gini index
D. Human Index
21. A common cause of inflation is:
A. Increased supply
B. Increased productivity
C. Increased demand
D. Decreased wages
22. Unemployment rate is calculated as:
A. (Unemployed / Labor force) * 100
B. Unemployed / Population
C. Employed / Total population
D. Labor force / Population
23. Which of these is not a type of unemployment?
A. Structural
B. Cyclical
C. Fractional
D. Frictional
24. Deflation is:
A. Increase in employment
B. Decrease in GDP
C. Sustained fall in price level
D. Fall in inflation rate
25. Who benefits from inflation?
A. Fixed income earners
B. Debtors
C. Creditors
D. Savers
26. Which policy is used to control inflation?
A. Expansionary fiscal policy
B. Contractionary monetary policy
C. Export promotion
D. Subsidy increase
27. Law of demand states that:
A. Price and demand move together
B. Demand is unaffected by price
C. Price and demand are inversely related
D. None
28. What causes movement along the demand curve?
A. Change in income
B. Change in price
C. Change in taste
D. Change in expectations
29. Which of the following shifts the demand curve?
A. Price change
B. Income change
C. Quantity change
D. None
30. Supply refers to:
A. Desire to buy goods
B. Amount sellers are willing to sell at various prices
C. Government provision
D. Imports only
31. Law of supply states:
A. Price increase leads to demand increase
B. Price increase leads to supply increase
C. Price decrease leads to supply increase
D. None
32. Equilibrium price is determined when:
A. Demand is zero
B. Supply is zero
C. Demand equals supply
D. Demand exceeds supply
33. If supply exceeds demand, price will:
A. Remain constant
B. Rise
C. Fall
D. Be fixed
34. An increase in supply with constant demand leads to:
A. Higher prices
B. Lower prices
C. No change
D. Shortage
35. Elasticity of demand measures:
A. Supply change
B. Price level
C. Consumer behavior
D. Responsiveness of demand to price
36. A rightward shift in supply curve indicates:
A. Decrease in supply
B. Increase in supply
C. Constant supply
D. No effect
37. If demand is inelastic:
A. Price change affects demand greatly
B. Price change has little effect on demand
C. Demand doesnt exist
D. None
38. Perfectly elastic demand means:
A. Quantity changes with price
B. No change in quantity
C. Infinite response to price
D. Zero demand
39. A Giffen good violates:
A. Law of supply
B. Law of demand
C. Law of diminishing returns
D. Law of equilibrium
40. Law of Diminishing Marginal Utility states:
A. Utility increases with consumption
B. Marginal utility decreases as consumption increases
C. Total utility falls
D. Utility stays constant
41. Marginal utility becomes negative when:
A. First unit is consumed
B. Total utility is rising
C. More of a good gives dissatisfaction
D. Price is high
42. Total utility is maximum when:
A. Marginal utility is zero
B. Marginal utility is maximum
C. No goods consumed
D. Utility is constant
43. If MU is positive, then:
A. TU is falling
B. TU is rising
C. TU is constant
D. None
44. Law of DMU applies to:
A. Money only
B. Tangible goods
C. All goods
D. None
45. Who gave the law of diminishing marginal utility?
A. Marshall
B. Adam Smith
C. Keynes
D. Ricardo
46. The utility of a good is:
A. Its price
B. Its cost
C. Satisfaction it gives
D. None
47. DMU is important for:
A. Price theory
B. Cost theory
C. Production theory
D. All
48. MU can be:
A. Only positive
B. Only negative
C. Only zero
D. Positive, zero or negative
49. The assumption of DMU includes:
A. Goods are unique
B. Homogeneous units
C. Different prices
D. None
