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 micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

Identify the correct statement.

  1. In deductive method, logic proceeds from the particular to the general

  2. Micro economics and macro economics are interdependent

  3. In a capitalist economy, the economic problems are solved only by planning commission

  4. Higher the prices, lower is the quantity demanded of a product. This is a normative statement.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation


Microeconomics and macroeconomics are interdependent or complementary to each other. The relationship between microeconomics and macroeconomics in the aggregate production and consumption levels are the result of choices made by individual households and firms.

In deductive method, logic proceeds from the general to particular.

In a capitalist economy, the economic problems are solved by market forces of demand and supply.

Higher the prices, lower is the quantity demanded of a product. This is a positive statement.

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 time period(s) covered in Economics Study is/are ______________.

  1. short-run

  2. long-run

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Economists employ the world of in progress associations. Studying finances includes learning to use statistics and to read essentially.  Economics majors are fascinating people both because of their skills and because they can explain why an economic phenomenon occurs and how economic performance strength improves. 

In macroeconomics, the short run is generally defined as the time prospect over which the earnings and price of other input to make are "close," or inflexible, and the long run is defined as the period of time over which these input prices have time to adjust.

Thus, the correct option is C.

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

When we are studying how a producer fixes the prices of his products we are studying:

  1. Macro Economics

  2. Micro Economics

  3. Both (a) & (b)

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Micro economics study economics from the view point of an individual point. Product pricing deals with how producer fixes the prices of his products depending on the market forces and thus it is a component 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

Macro economics is also called _____________ economics.

  1. applied

  2. aggregate

  3. experimental

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Macro economics deals in the study of a nation's aggregate demand, aggregate supply, national income, aggregate employment and unemployment , inflation etc. Therefore, it studies aggregate or national variables and not individual variables.

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 the following is related to micro economics?

  1. Inflation in the economy

  2. Problem of unemployment

  3. National income

  4. Income from the railways to the government
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Income from the railways is related to microeconomics as it is related to a particular department and not the whole economy.

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 economics in divided into:

  1. Deductive and inductive

  2. Micro and macro economics

  3. Positive and normative

  4. An art and science
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Economics is divided into two parts:

  • Micro economics which deals in the study of individual variables and their relation with each other.
  • Macro economics that  deals in the study of collective or aggregate variables and how they influence the whole economy. 

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

Problems of unemployment, illiteracy, etc. are studied under which branch of economics?

  1. Macroeconomics

  2. Microeconomics

  3. Wealth economics

  4. Monetary economics
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Macro economics deals in the overall problems of the economy that involves the study of national aggregates. Problems of unemployment, illiteracy, etc are studied under macro economics since these include economy as a whole and not from the view point of an individual unit.

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 part of economics is also called Theory of Income and Employment?

  1. Macroeconomics

  2. Microeconomics

  3. Wealth economics

  4. Monetary economics
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Macro economics deals with the study of economics as a whole and the study of collective or aggregate variables like national income and how they influence the whole economy. Theory of income and employment explains how aggregate demand and supply decide the level of income and employment in an economy as a whole. Thus, it is a part of macro 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

Which economics deals with the study of behaviour of individual decision making units?

  1. Macroeconomics

  2. Microeconomics

  3. Wealth economics

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

Microeconomics deals with the study of economics from the viewpoint of an individual unit and the study of individual variables and their relation with each other that influences a market place and its factors. 

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
Economic problem arises due to the fact that ____________.

  1. resources are scarce

  2. human wants are unlimited

  3. resources have alternative uses

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

All economic problems arises due to unlimited human wants and limited resources. Moreover, these resources have alternative uses and wants keep on increasing each day. This economic problem is also known as problem of choice or the problem of allocating resources to alternative uses.

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

Microeconomics does not deal with the aggregate economy.

  1. True

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

Microeconomics deals with the aggregates of economic issues relating to small economic units. For example, market demand is the aggregation of individual demand.

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

Micro economics is concerned with ___________.

  1. consumer behaviour

  2. product pricing

  3. factor pricing

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Micro economics deals with the study of economics from the view point of individual unit. When economic problems are studied considering small economic units like an individual consumer, or an individual producer, we are referring to micro economics. 
Components of microeconomics:
1) Theory of consumer behaviour: This deals with the law of demand and consumer equilibrium.
2) Theory of producer behaviour: This deals with the law of supply and producer equilibrium.
3) Factor pricing: This refers to the determination of prices of factor of production in the factor market.
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 part of micro economics?

  1. Factor Pricing

  2. National Income

  3. Balance of Payment

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Factor pricing refers to the determination of the factors of production in the factor market. Microeconomics deals with the study of economics from the individual point of view. Thus factor pricing is a part of micro economics.

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

Open market operations (OMOs) are related to _________.

  1. Fiscal policy

  2. Monetary policy

  3. Labour policy

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

Open market operation (OMO) is related to the monetary policy by the central bank in which the bank deals in the sale and purchase of securities and bonds in the open market to control the supply of money in the economy. By selling the securities and bonds, the central bank soaks liquidity from the economy which controls the inflation in the economy by decreasing the purchasing power of the people and by buying the securities and bonds, the central bank releases liquidity which controls deflation in the economy by increasing the purchasing power of the people.