Economics · General Awareness

Economics Concepts and Theories

1,710 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 economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

Under mixed economy, firms operating in both public and private sectors are left free to adjust their activities to the controlled market forces.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
In a mixed economy both private as well as public enterprises utilize the resources for the production of goods and services in  the economy for personal as well as social gains where government only audits the overall production to ensure adequate availability of goods and services in the economy whereas all the operation takes place with free market forces. 
Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Which of the following is not a problem of barter system of exchange?

  1. Store of Value

  2. Double Coincidence of Wants

  3. Unit of Account

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

Barter system was a system of exchange where goods were exchanged for goods and there was no common medium of exchange in the economy. Barter system had many drawbacks like lack of double coincidence of wants, lack of a common unit of value, difficulty of future payments or contractual payments and difficulty of storage of value and transfer of value. Therefore, unemployment is not a problem related to barter system. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Positive economic analysis ___________.

  1. compares the desirability of alternative government policy outcomes

  2. provides a framework within which we can study how some groups are better off than others

  3. analyses the sources of improvements in the standard of living that result from favourable government policies.

  4. is based on observed cause and effect relationship in the economy
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Positive economics deals with objective analysis and facts, describing how the economy works based on observed cause-and-effect relationships, rather than making value judgments.

Multiple choice political science problem of unemployment in india introduction and features of unemployment quality of population unemployment- types, causes and measures

Unemployment is likely to be maximum during;

  1. Inflation

  2. Depression

  3. Economic slow down

  4. Flood or other natural calamities
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Depression is characterized by a severe and prolonged downturn in economic activity, leading to mass layoffs and high levels of involuntary unemployment across all sectors.

Multiple choice political science problem of unemployment in india introduction and features of unemployment quality of population unemployment- types, causes and measures

There is always a Natural Rate of Unemployment in an economy due to ___________________.

  1. Frictional Changes

  2. Policies that encourage potential employees to reject job offers and discourage employers from offering appropriate wages

  3. Structural Changes

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

The natural rate of unemployment exists even in a healthy economy due to frictional factors (job searching) and structural factors (skill mismatches or policy impacts).

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

___________ is that branch of economics that concern how individual households ad firms takes economic decisions to allocate scarce resources.

  1. Marcoeconomics

  2. Microeconomics

  3. Positive economics

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

Microeconomics

  • Micro in Greek means 'small'. 
  • It is that part of economics which deals with the individual units of the economy. 
  • It takes into account the demand and supply of individual units. 
  • It aims to determine the price of a product using the factors of production.
  • Example: Individual income and Individual output.

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

The study of the behaviour of firms, individual markets, and household is called ___________.

  1. national economics

  2. positive economics

  3. macroeconomics

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

 Microeconomics
1. It is that part of economics which deals with the individual units of the economy. 
2. It takes into account the demand and supply of individual units. 
3. It aims to determine the price of a product using the factors of production.
4. Example: Individual income and Individual output.

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

The term micro-economics is derived from Greek prefix mikro which means ____________.

  1. aggregate

  2. consumer choices

  3. biggest

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

Microeconomics

  • Micro in Greek means 'small'. 
  • It is that part of economics which deals with the individual units of the economy. 
  • It takes into account the demand and supply of individual units. 
  • It aims to determine the price of a product using the factors of production.
  • Example: Individual income and Individual output.

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

To study the impact of rise in the price of edible oils on the demand of edible oil is the concern of ____________.

  1. macroeconomics

  2. microeconomics

  3. positive economics

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

To study the impact of rise in the price of edible oils on the demand of edible oil is the concern of Microeconomics. Microeconomics is that part of economics which deals with the individual units of the economy. It takes into account the demand and supply of individual units and helps in studying the prices of products according to it. 

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

Which of these is a subject matter of micro economics?

  1. Interaction of producers and consumers in a market

  2. Aggregate demand

  3. Level of full employment

  4. Impact of variation in CRR on money supply
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Interaction of producers and consumers in a market is the subject matter of Microeconomics. Microeconomics is that part of economics which deals with the individual units of the economy. It takes into account the demand and supply of individual units. All the other options are the concern of macroeconomics.

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

In macroeconomics, we examine things such as ___________.

  1. questions of what, how and for whom

  2. relation between price and consumer demand

  3. interrelations among individual households and business firms.

  4. the overall price level/GDP growth
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In macro economics, we examine things such as the overall price level or GDP growth. 

The term ‘Macro’ is derived from the Greek word 'Makro' meaning large. So Macroeconomics is that part of economics which studies the economic problems and issue that are on a large scale. It studies about the performance of the economy as a whole and not of any individual firm or business. It focuses on the study of problems like inflation, unemployment, poverty, etc.  

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

Which of these are outside the domain of Microeconomics?

  1. Consumer behaviour

  2. Factor pricing

  3. Economic growth

  4. Study of firm
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Economic growth is outside the domain of Microeconomics. Microeconomics is that part of economics which deals with the individual units of the economy and not the issues that occur on a national scale like, economic growth and employment. It takes into account the demand and supply of individual units. 

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

Macroeconomics focuses primarily on __________.

  1. unemployment, inflation, economic growth, and other aggregate economic phenomena

  2. pricing of essential commodities

  3. changing in consumer preference

  4. consumer purchasing patterns
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The term ‘Macro’ means large. So Macroeconomics is that part of economics which studies the economic problems and issue that are on a large scale. It studies about the performance of the economy as a whole and not of any individual firm or business. It focuses on the study of problems like inflation, unemployment, poverty, etc. 

Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

____________ is outside the domain of macroeconomics.

  1. Consumer behaviour

  2. National income

  3. Economic growth

  4. Balance of payment and trade
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

  • Macroeconomics is that part of economics which studies the economic problems and issue that are on a large scale. 
  • It studies about the performance of the economy as a whole and not of any individual firm or business. 
  • Thus national income, economic growth and balance of payments and trade are the concern of macro economics whereas consumer behavior is the concern of micro economics.  


Multiple choice business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

Study of the overall behavior of the economy is called ______.

  1. normative economics

  2. positive economics

  3. macroeconomics

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

Macroeconomics
1. It is that part of economics which deals with the economic issues that take place on a large scale. 
2. It takes into account aggregate demand and aggregate supply.  
3. It aims to determine income and employment level of the economy. 
4. Example: National income, National output.