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

The branch of economic theory that deals with the problem of allocation of resources is ________________.

  1. Micro economic theory

  2. Macro economic theory

  3. Econometrics

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

Micro economics deals with the individual problems of production which involves cost and production function. Therefore, allocation of resources is a part of this branch.

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 and Macro Economics were coined by ________during the twenties, and since then they are frequently used by economists for economic analysis.

  1. Prof. Keynes

  2. Prof. Robbins

  3. Prof. Marshall

  4. Prof. Ragner Frisch
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Prof. Ragnar Frisch was a Norwegian economist who was best known for founding the various disciplines of econometric and for coining the two common terms i.e. micro and macro economics which is the most widely used terms in modern 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

__________ may be defined as that branch of economic analysis which studies the behaviour of all the units combined together.

  1. Microeconomics

  2. Macroeconomics

  3. Individual economics

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

Macroeconomics is the branch of economics that studies the aggregate units of the economy like national income, employment, etc. It uses lumping method for the purpose of economic study. For example, under lumping method we study the general price level that is prices of all products, and not prices of individual products.

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 a study in aggregates.

  1. Macro economics

  2. Micro economics

  3. Both (a) and (b)

  4. Social economics
Reveal answer Fill a bubble to check yourself
A 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 group 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

We mainly study the following in macro economics-
I. National income and output
II. General price level
III. Balance of trade and payments
Select the correct answer from the options given below -

  1. I & II

  2. II & III

  3. I & III

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

Macroeconomics studies economic relationships or economic problems or economic issues at the level of the economy as a whole. Thus national income and output, general price level and balance of trade and payments- all are studied under macro economics since they all involve the study of the economic aggregates.

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 publication of______General Theory, in 1936, gave a strong impetus to the growth and development of modern macro economics.

  1. Keynes

  2. Robbins

  3. Marshall

  4. Ragner Frisch
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Keynes general theory focused on income and employment of the nation which affects aggregate demand and supply of the nation which was the main branch of macro economics after national income.

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

We mainly study the following in Macro-Economics: 

  1. External value of money

  2. Consumer behaviour

  3. All (A), (B) & D)

  4. Location of industry
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Macro economics has a separate branch known as exchange rate systems that deals in the study of external value of money in comparison to the domestic currency and how these fluctuations affects a nation's growth and development. 

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

We mainly study the following in Micro-Economics:

  1. General price level

  2. National income and output

  3. Location of industry

  4. Employment and economic growth
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In micro economics, summation of various similar markets form an industry which is located at various places according to the required resources available there and demand and supply of the commodities prevailing there. 

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 and macroeconomics are not independent approaches to economic analysis but they are complementary to each other.

  1. False

  2. True

  3. Partly true

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

Micro and macro approaches of economics are very dependent on each other. To know well about the working of an economy, on must have knowledge of both the branches of economics. It can be said that macroeconomics uses the principles of microeconomics as its foundation and the former is a magnified version of the latter.

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

We mainly study the following in macroeconomics:

  1. External value of money

  2. Product pricing

  3. National income and output

  4. Both (A) and (C)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Macroeconomics studies all the aggregate units in the economy which include the value and dimensions of money, national income and output, employment, inflation, etc.

Product Pricing is a subject matter of Microeconomics.

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

We mainly study the following in Micro-Economics ____________________.

  1. Economic conditions of a section of the people

  2. General price level

  3. Balance payments

  4. Employment and economic growth
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Micro economics deals in the study of individual variables that influence the market. Therefore, study of consumer and producer behaviour for different commodities is the main aspect of microeconomics as it focuses on how different sections affect the 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

Macro economics is the study of behaviour of __________.

  1. multiple units

  2. individual units

  3. large aggregates

  4. none of the above
Reveal answer Fill a bubble to check yourself
C 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 group 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

Micro-Economics is the study of behaviour of ____________.

  1. multiple units

  2. individual units

  3. large aggregates

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

Microeconomics deals with the study of individual variables like firms, workers, consumers, and investors on how they interact with each other and influence various factors in the market like price of a commodity. 

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 covered in Macro Economics?

  1. Product Pricing

  2. Consumer Behaviour

  3. General Price Levels

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

Macro economics studies economics as a whole and not from the view point of an individual unit. General price level is related to the prices of most of the commodity in a nation at a certain period of time and thus it is a macro variable.

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 _________.

  1. price theory

  2. income theory

  3. irrelevant theory

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

Macro economics deals with the national income of a nation and what are its implications on various factors of the nation economically as well as socially which lead to growth and development of the economy.