Economics · General Awareness

Economics Concepts and Theories

1,657 Questions

Review fundamental and advanced economics concepts through this structured question bank. The topics include macroeconomics, fiscal policy, international trade theories, and economic regulation. These questions are ideal for candidates preparing for civil services and other administrative competitive examinations.

Macroeconomics fundamentalsInternational trade theoriesFiscal policy debatesEconomic regulationLabor theory of value

Economics Concepts and Theories Questions

Multiple choice

Who propounded the 'market law'?

  1. Adam Smith

  2. J.B. Say

  3. T.R. Malthus

  4. David Ricardo
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Say's Law, or the law of markets, was propounded by the French economist Jean-Baptiste Say. It states that aggregate supply creates its own aggregate demand.

Multiple choice

Which among the following is not a trait of free market?

  1. Government control is minimal

  2. Prices are decided by market forces

  3. Always works in equilibrium

  4. Shortages and surpluses are rare.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A free market does not guarantee equilibrium; it is subject to fluctuations, cycles, and imbalances. The other options are generally considered characteristics of free-market systems.

Multiple choice

The economic environment around us consists of which basic entities

  1. Households (the consumers),

  2. Firms (the producers)

  3. Government (the co-coordinator)

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The economic environment around us consists of three basic entities – Households (the consumers), Firms (the producers) and Government (the co-coordinator).

Multiple choice

The three groups of decision makers in the economy are _______.

  1. households, business firms and banks

  2. households, business firms and government

  3. business firms, government, and banks

  4. business firms, banks, and foreign traders

  5. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

These three are very essential in an economy for decision making, based on the economic cycle.

Multiple choice

Which aspect of economic policy did Thomas Jefferson and Alexander Hamilton agree upon?

  1. The U.S. government should pass a protective tariff.

  2. The U.S. gov't should use liquor taxes to raise revenue.

  3. The U.S.gov't should pay off war debt to foreign countries.

  4. The U.S.gov't should insure deposits in the Bank of the U.S.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Despite their deep disagreements on the role of government, both Jefferson and Hamilton agreed that the new nation needed to establish financial credibility by paying off the debts incurred during the Revolutionary War.

Multiple choice

President Ronald Reagan used the concept ofsupply-side economics when he proposed

  1. reducing income taxes to stimulate growth

  2. providing direct payments to people living inpoverty

  3. creating government jobs to keep peopleworking

  4. increasing regulations on business to promotecompetition
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Supply-side economics, or Reaganomics, focuses on reducing taxes and deregulation to stimulate investment and economic growth.

Multiple choice

President Ronald Reagan used the concept of supply-side economics when he proposed

  1. reducing income taxes to stimulate growth

  2. providing direct payments to people living in poverty

  3. creating government jobs to keep people working

  4. increasing regulations on business to promote competition
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Supply-side economics, often called Reaganomics, relies on the theory that reducing taxes on corporations and high-income earners will stimulate investment and economic growth. This is the opposite of demand-side or Keynesian policies.

Multiple choice the economy of maharashtra economics

The term Economics is derived from the Greek words "OIKOU" and "Nonos" meaning :

  1. Rule or law of household

  2. Rule or law of the land

  3. Rule or law of the nature

  4. Thumb Rule
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The term Economics is derived from the Greek words 'Oikos' (household) and 'Nomos' (management/law), which translates to the management or law of the household.

Multiple choice economics circular flow of income and methods of calculating national income expenditure method and income method methods of measuring national income national income accounting

For developed economics which of the following methods is most suitable?

  1. Value Added Method

  2. Income Method

  3. Expenditure Method

  4. Product Method
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Income Method is often considered most suitable for developed economies where income tax records and organized financial data are comprehensive and reliable.

Multiple choice civics consumer in the market consumer awareness, education and protection consumers and their rights consumer : satisfaction and protection

The concept that under a system of free enterprise, it is consumers who decide what goods and services shall be produced and in what quantities, is known as ________.

  1. consumer protection

  2. consumer's decision

  3. consumer preference

  4. consumer's sovereignty
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Consumer sovereignty is an economic theory stating that the consumer is the king in a free market, as their purchasing decisions determine what is produced and in what quantities.