Q. If a country has a GDP of $1.2 trillion and the government spends $300 billion, what percentage of GDP is government spending?
A.
20%
B.
25%
C.
30%
D.
15%
Show solution
Solution
Percentage of GDP = (300 billion / 1.2 trillion) * 100 = (300 / 1200) * 100 = 25%.
Correct Answer:
B
— 25%
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Q. If a country has a GDP of $800 billion and the inflation rate is 2%, what will be the GDP in real terms after one year?
A.
$784 billion
B.
$800 billion
C.
$816 billion
D.
$820 billion
Show solution
Solution
Real GDP = Nominal GDP / (1 + inflation rate) = 800 billion / 1.02 = $784 billion.
Correct Answer:
A
— $784 billion
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Q. If a country has a GDP of $800 billion and the inflation rate is 2%, what will be the GDP in real terms after adjusting for inflation?
A.
$784 billion
B.
$800 billion
C.
$816 billion
D.
$820 billion
Show solution
Solution
Real GDP = Nominal GDP / (1 + inflation rate) = 800 billion / 1.02 = $784 billion.
Correct Answer:
A
— $784 billion
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Q. If a country has a GDP of $800 billion and the inflation rate is 6%, what will be the nominal GDP after one year?
A.
$848 billion
B.
$800 billion
C.
$850 billion
D.
$860 billion
Show solution
Solution
Nominal GDP after inflation = 800 billion * (1 + 0.06) = 800 billion * 1.06 = $848 billion.
Correct Answer:
A
— $848 billion
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Q. If a country has a trade deficit of $50 billion and exports worth $30 billion, what are its imports?
A.
$20 billion
B.
$30 billion
C.
$50 billion
D.
$80 billion
Show solution
Solution
Imports = Exports + Trade deficit = 30 + 50 = $80 billion
Correct Answer:
D
— $80 billion
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Q. If a country has a trade deficit of $500 million and its exports are $200 million, what are its imports?
A.
$300 million
B.
$500 million
C.
$700 million
D.
$900 million
Show solution
Solution
Imports = Exports + Trade deficit = 200 + 500 = $700 million
Correct Answer:
C
— $700 million
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Q. If a country's budget deficit increases, what is likely to happen to its national debt? (2023)
A.
It will decrease
B.
It will remain the same
C.
It will increase
D.
It will fluctuate
Show solution
Solution
An increase in budget deficit typically leads to an increase in national debt as the government borrows more.
Correct Answer:
C
— It will increase
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Q. If a country's GDP grows from $1 trillion to $1.2 trillion in a year, what is the growth rate?
A.
15%
B.
20%
C.
10%
D.
25%
Show solution
Solution
Growth rate = ((1.2 - 1) / 1) * 100 = 20%
Correct Answer:
B
— 20%
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Q. If a country's GDP is $1 trillion and its population is 250 million, what is the GDP per capita?
A.
$4000
B.
$5000
C.
$6000
D.
$7000
Show solution
Solution
GDP per capita = GDP / Population = 1 trillion / 250 million = $4000
Correct Answer:
B
— $5000
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Q. If a country's GDP is $1 trillion and its population is 50 million, what is the GDP per capita?
A.
$20,000
B.
$25,000
C.
$30,000
D.
$15,000
Show solution
Solution
GDP per capita = GDP / Population = 1,000,000,000,000 / 50,000,000 = $20,000
Correct Answer:
B
— $25,000
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Q. If a currency depreciates by 10% against another currency, how much will you receive for $1000?
A.
$900
B.
$950
C.
$1000
D.
$1100
Show solution
Solution
Amount received = $1000 - (10% of $1000) = $1000 - $100 = $900
Correct Answer:
A
— $900
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Q. If a government plans to increase its budget by 15% next year, and the current budget is $300 billion, what will be the new budget?
A.
$345 billion
B.
$330 billion
C.
$315 billion
D.
$300 billion
Show solution
Solution
New budget = 300 billion * (1 + 0.15) = 300 billion * 1.15 = $345 billion.
Correct Answer:
A
— $345 billion
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Q. If a product's price elasticity of demand is -2, what does this indicate about consumer behavior?
A.
Inelastic demand
B.
Elastic demand
C.
Unitary demand
D.
Perfectly elastic demand
Show solution
Solution
A price elasticity of -2 indicates elastic demand, meaning consumers are sensitive to price changes.
Correct Answer:
B
— Elastic demand
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Q. If a product's price elasticity of demand is -2, what does this indicate about the demand for the product?
A.
Inelastic
B.
Elastic
C.
Unitary
D.
Perfectly inelastic
Show solution
Solution
A price elasticity of -2 indicates that demand is elastic, meaning quantity demanded changes significantly with price changes.
Correct Answer:
B
— Elastic
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Q. If inflation is at 3% and a product costs $100, what will be the cost of the product after one year?
A.
$102
B.
$103
C.
$104
D.
$105
Show solution
Solution
Cost after one year = Original cost * (1 + Inflation rate) = 100 * (1 + 0.03) = $103
Correct Answer:
B
— $103
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Q. If inflation is at 5% and a product costs $100, what will be the cost of the product after one year?
A.
$105
B.
$110
C.
$115
D.
$120
Show solution
Solution
Cost after one year = Original cost * (1 + Inflation rate) = 100 * 1.05 = $105
Correct Answer:
A
— $105
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Q. If inflation is higher than expected, what is the likely impact on purchasing power? (2023)
A.
It increases
B.
It decreases
C.
It remains the same
D.
It fluctuates
Show solution
Solution
Higher than expected inflation decreases purchasing power as prices rise faster than income.
Correct Answer:
B
— It decreases
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Q. If the budget deficit of a country is $50 billion and the total budget is $500 billion, what percentage of the budget is the deficit?
A.
5%
B.
10%
C.
15%
D.
20%
Show solution
Solution
Percentage of deficit = (50 / 500) * 100 = 10%.
Correct Answer:
B
— 10%
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Q. If the budget deficit of a government is $50 billion and it plans to reduce it by 20% next year, what will be the new budget deficit?
A.
$40 billion
B.
$45 billion
C.
$50 billion
D.
$60 billion
Show solution
Solution
New budget deficit = 50 billion * (1 - 0.20) = 50 billion * 0.80 = $40 billion.
Correct Answer:
A
— $40 billion
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Q. If the demand for a product increases by 10% and the price increases by 5%, what is the price elasticity of demand?
Show solution
Solution
Price elasticity of demand = % change in quantity demanded / % change in price = 10% / 5% = 2
Correct Answer:
A
— 0.5
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Q. If the demand for a product increases by 10% and the supply remains constant, what will happen to the price?
A.
Increase
B.
Decrease
C.
Remain the same
D.
Cannot be determined
Show solution
Solution
According to the law of demand, if demand increases and supply remains constant, the price will increase.
Correct Answer:
A
— Increase
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Q. If the demand for a product increases by 10% and the supply remains constant, what will happen to the equilibrium price?
A.
Increase
B.
Decrease
C.
Remain the same
D.
Cannot be determined
Show solution
Solution
An increase in demand with constant supply leads to an increase in equilibrium price.
Correct Answer:
A
— Increase
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Q. If the demand for a product increases by 30% and the supply remains constant, what will happen to the price?
A.
Decrease
B.
Increase
C.
Remain the same
D.
Cannot be determined
Show solution
Solution
With constant supply and increased demand, the price will increase.
Correct Answer:
B
— Increase
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Q. If the elasticity of demand for a product is -2, what does this indicate about the demand?
A.
Inelastic
B.
Elastic
C.
Unitary
D.
Perfectly inelastic
Show solution
Solution
An elasticity of -2 indicates that demand is elastic, meaning quantity demanded changes significantly with price changes.
Correct Answer:
B
— Elastic
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Q. If the elasticity of demand for a product is 2, and the price decreases by 10%, what will be the percentage change in quantity demanded?
A.
10%
B.
20%
C.
30%
D.
40%
Show solution
Solution
Percentage change in quantity demanded = Elasticity * Percentage change in price = 2 * (-10%) = -20%
Correct Answer:
B
— 20%
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Q. If the GDP of a country is $1 trillion and it grows by 5% in a year, what will be the GDP at the end of the year?
A.
$1.05 trillion
B.
$1.1 trillion
C.
$1.2 trillion
D.
$1.15 trillion
Show solution
Solution
GDP after growth = 1 trillion * (1 + 0.05) = 1 trillion * 1.05 = $1.05 trillion.
Correct Answer:
A
— $1.05 trillion
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Q. If the GDP of a country is $2 trillion and it decreases by 10% due to a recession, what will be the new GDP?
A.
$1.8 trillion
B.
$1.9 trillion
C.
$2 trillion
D.
$2.1 trillion
Show solution
Solution
New GDP = 2 trillion * (1 - 0.10) = 2 trillion * 0.90 = $1.8 trillion.
Correct Answer:
A
— $1.8 trillion
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Q. If the GDP of a country is $2 trillion and it decreases by 10%, what will be the new GDP?
A.
$1.8 trillion
B.
$1.9 trillion
C.
$2 trillion
D.
$2.1 trillion
Show solution
Solution
New GDP = 2 trillion * (1 - 0.10) = 2 trillion * 0.90 = $1.8 trillion.
Correct Answer:
A
— $1.8 trillion
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Q. If the GDP of a country is $2 trillion and it decreases by 2% in a year, what will be the GDP at the end of the year?
A.
$1.96 trillion
B.
$1.98 trillion
C.
$2 trillion
D.
$2.02 trillion
Show solution
Solution
GDP after decrease = 2 trillion * (1 - 0.02) = 2 trillion * 0.98 = $1.96 trillion.
Correct Answer:
B
— $1.98 trillion
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Q. If the GDP of a country is $2.5 trillion and it decreases by 2% due to a recession, what will be the new GDP?
A.
$2.45 trillion
B.
$2.4 trillion
C.
$2.5 trillion
D.
$2.55 trillion
Show solution
Solution
New GDP = 2.5 trillion * (1 - 0.02) = 2.5 trillion * 0.98 = $2.45 trillion.
Correct Answer:
A
— $2.45 trillion
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Showing 31 to 60 of 106 (4 Pages)
Economics MCQ & Objective Questions
Economics is a crucial subject for students preparing for school and competitive exams in India. Understanding economic principles not only helps in scoring better but also enhances your analytical skills. Practicing MCQs and objective questions is an effective way to reinforce your knowledge and identify important questions that frequently appear in exams.
What You Will Practise Here
Basic concepts of microeconomics and macroeconomics
Supply and demand analysis
Market structures: perfect competition, monopoly, and oligopoly
National income and its measurement
Inflation, unemployment, and economic growth
Government policies and their impact on the economy
International trade and balance of payments
Exam Relevance
Economics is a significant part of the curriculum for CBSE, State Boards, NEET, and JEE exams. Students can expect questions that test their understanding of economic theories, definitions, and real-world applications. Common patterns include multiple-choice questions that require critical thinking and application of concepts, making it essential to practice thoroughly.
Common Mistakes Students Make
Confusing microeconomics with macroeconomics concepts
Misinterpreting graphs and diagrams related to supply and demand
Overlooking the assumptions behind economic models
Failing to connect theoretical knowledge with practical examples
FAQs
Question: What are some important Economics MCQ questions for exams?Answer: Important questions often include topics like market equilibrium, elasticity, and the effects of government intervention.
Question: How can I improve my performance in Economics objective questions?Answer: Regular practice of MCQs and understanding the underlying concepts will significantly enhance your performance.
Start solving practice MCQs today to test your understanding and boost your confidence in Economics. Remember, consistent practice is key to mastering this subject and achieving your academic goals!
