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 business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

According to the Keynesian theory of income determination, income and output in the short run depends on aggregate demand.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Keynesian theory posits that in the short run, the level of economic activity is determined by the total spending (aggregate demand) in the economy.

Multiple choice business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

In a two-sector economy model factor income of the households is equal to factor payments by firms.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In a two sector economy, the household sector renders factor services and in return receive factor payments from the firms, which includes rent, wages, interest and profits which is regarded as the factor income by the household sector. Thus, factor incomes equal factor payments in a two sector economy.

Multiple choice business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

Who dictates price in a free market economy?

  1. The Reserve Bank ofIndia

  2. Market forces of demand and supply

  3. The World Bank

  4. The Government
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The prices in a free market are determined by the market forces through the interactions of supply and demand in the marketplace. Where demand is the quantity of a product that buyers are willing to purchase according to a given price and supply is the amount of a product that sellers can give to customers at a given price.

Multiple choice business economics and quantitative methods introduction to managerial economics theories of employment and income concept of international trade macro economic analysis

Keynesian theory of income and employment determination was developed in ____________.

  1. 1940

  2. 1935

  3. 1936

  4. 1931
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

John Maynard Keynes was a British economist who presented his ideas on income and employment determination in 1936, in his book, 'The General Theory of Employment'. This came to be known as the Keynesian theory of income and employment, which has impacted many principles and practices of macroeconomics and the way economic policies are formed.

Multiple choice elements of business classification of human activities characteristics of business activities economic and non-economic activities human activities - commercial and non-commercial activities

Which of the following statements best describe economic activities?

  1. These activities are undertaken to earn money

  2. These activities provide pleasure

  3. These activities involve no risk

  4. These activities involve working outside the house
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Economic activities are those activities which are undertaken to earn money and done to earn a living. For example a person selling vegetables in your locality is a type of an economic activity as he earn money by this activity.

Multiple choice commercial applications concept of market and marketer meaning, types, stages and role of marketing meaning and definition of marketer role of marketing

The route through which goods move from the place of production to the place of consumption is termed as.

  1. Channel of distribution

  2. Channel of exchange

  3. Market planning

  4. Market environment
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A channel of distribution is the path or route through which goods and services travel from the producer to the final consumer.

Multiple choice social science poverty : challenge facing india programmes for poverty eradication poverty as a challenge poverty: an economic challenge for india public health and the government constraints in economic development of rajasthan

Minimum level of consumption standard laid down is called as________.

  1. consumption standard

  2. demand levels

  3. income line

  4. poverty line
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The poverty line is the threshold level of income or consumption expenditure below which an individual is considered to be living in poverty.

Multiple choice biology reproductive health reproductive health of humans need of family planning reproductive health problems

MTP is

  1. Multitrade practices

  2. Malthusian treatise on population

  3. Multiple temporary frequency

  4. Medical termination of pregnancy
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

MTP is medical termination of pregnancy or induced abortion. Intentional or voluntary termination of pregnancy before the foetus become viable is called MTP or induced abortion.

So, the correct answer is 'Medical termination of pregnancy'.

Multiple choice elements of accounts accounts from incomplete records stakeholders and their information requirements ascertainment of profit and loss calculation of profit or loss under single entry system of accounting and statement of affairs accounts from incomplete records - single entry system

The government, consumer or a researcher will have ______________.

  1. Monetary stakes

  2. Non monetary stakes

  3. Interest stakes

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

A person, group or organization that has interest or concern in an organization.
Stakeholders can affect or be affected by the organization's actions, objectives and policies. Some examples of key stakeholders are creditors, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions, and the community from which the business draws its resources.

Stakeholders who does not have any financial interest in business organisation holds non financial or non monetary stakes. For e.g., Government, consumers, researcher etc.

Multiple choice business economics and quantitative methods equilibrium of a firm shifts in demand and supply producer's equilibrium income-output determination liquidity preference and profit

Marginal productivity theory is the _______________ theory of distribution.

  1. primary

  2. general

  3. central

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

The Marginal Productivity Theory is considered a general theory of distribution because it attempts to explain the determination of all factor prices (wages, rent, interest, profit) based on their marginal productivity.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

In a two-sector economy, total production is always equal to total consumption.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Households and firms depend on each other in the circular flow of income in case of a two-sector model. Participants of the two-sector economy are households and producers.  Flow of money from producers to households as payments for the purchase of factor services has been a continuous process. So, there has been the flow of money from households to producers as payments for the purchase of consumer goods and services, This non-stop continuity of inter-sectoral flows is called 'circularity of flows'. Hence, total consumption by households is always equal to total production by the producers.

Multiple choice economics basic concepts of national income macroeconomic theories some basic concepts of macroeconomics introduction to macroeconomics

The book General Theory of Employment Interest and Money was written by _________.

  1. David Ricardo

  2. Adam Smith

  3. J.M. Keynes

  4. Alfred Marshall
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The General Theory of Employment, Interest and Money, published in 1936, is the seminal work of John Maynard Keynes that laid the foundation for modern macroeconomics.