Economy (UPSC) MCQ & Objective Questions
The Economy (UPSC) section is crucial for students aiming to excel in competitive exams. Understanding economic concepts not only helps in scoring better but also builds a strong foundation for future studies. Practicing MCQs and objective questions is an effective way to enhance your exam preparation, as it familiarizes you with important questions and improves your problem-solving skills.
What You Will Practise Here
Key economic theories and their applications
Fundamentals of Indian economy and its structure
Monetary and fiscal policies
Economic development and planning in India
International trade and its impact on the Indian economy
Current economic issues and government initiatives
Important definitions and formulas related to economics
Exam Relevance
The Economy (UPSC) topic is not only significant for UPSC exams but also appears in various school examinations like CBSE and State Boards. Students can expect questions related to economic policies, definitions, and current affairs. Common question patterns include multiple-choice questions that test conceptual understanding and application of economic principles in real-world scenarios.
Common Mistakes Students Make
Confusing terms like GDP and GNP
Misunderstanding the implications of fiscal and monetary policies
Overlooking current economic events that can be exam-relevant
Neglecting the importance of diagrams and graphs in economic explanations
FAQs
Question: What are some important Economy (UPSC) MCQ questions to focus on?Answer: Focus on questions related to economic policies, definitions, and current affairs as they frequently appear in exams.
Question: How can I improve my understanding of Economy (UPSC) concepts?Answer: Regular practice of objective questions and engaging with current economic news can significantly enhance your understanding.
Start solving practice MCQs today to test your understanding of Economy (UPSC) concepts and boost your confidence for the exams ahead!
Q. A budget of $60,000 is divided among three departments in the ratio 2:3:5. How much does the department with the largest share receive?
A.
$20,000
B.
$30,000
C.
$40,000
D.
$50,000
Show solution
Solution
Total parts = 2 + 3 + 5 = 10. Largest share = (5/10) * $60,000 = $30,000.
Correct Answer:
C
— $40,000
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Q. A car's price was $20,000 last year. If the inflation rate is 10%, what will be the price of the car this year?
A.
$21,000
B.
$22,000
C.
$22,500
D.
$23,000
Show solution
Solution
Price this year = 20000 + (10/100 * 20000) = 20000 + 2000 = $22000
Correct Answer:
B
— $22,000
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Q. A charity organization helps 1,200 people out of 3,000 living in poverty. What percentage of the poor does the organization help?
A.
30%
B.
40%
C.
50%
D.
20%
Show solution
Solution
Percentage helped = (1,200 / 3,000) * 100 = 40%.
Correct Answer:
B
— 40%
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Q. A city has a budget of $500,000. If it spends $200,000 on infrastructure and $150,000 on education, what percentage of the budget is left?
A.
30%
B.
40%
C.
50%
D.
20%
Show solution
Solution
Total spent = $200,000 + $150,000 = $350,000. Remaining = $500,000 - $350,000 = $150,000. Percentage left = ($150,000 / $500,000) * 100 = 30%.
Correct Answer:
B
— 40%
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Q. A company has a budget of $50,000 for a project. If they spend $30,000 in the first month, what percentage of the budget remains?
A.
40%
B.
60%
C.
20%
D.
80%
Show solution
Solution
Remaining budget = $50,000 - $30,000 = $20,000. Percentage remaining = ($20,000 / $50,000) * 100 = 40%.
Correct Answer:
B
— 60%
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Q. A company plans to allocate 40% of its $250,000 budget to research and development. How much money is that?
A.
$80,000
B.
$90,000
C.
$100,000
D.
$70,000
Show solution
Solution
Amount for R&D = 40% of $250,000 = $100,000.
Correct Answer:
A
— $80,000
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Q. A country has a balance of trade of $100 million and a balance of services of -$50 million. What is the overall balance?
A.
$50 million surplus
B.
$50 million deficit
C.
$100 million surplus
D.
$100 million deficit
Show solution
Solution
Overall balance = Balance of trade + Balance of services = $100 million - $50 million = $50 million surplus.
Correct Answer:
A
— $50 million surplus
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Q. A country has a current account deficit of $150 million and a capital account surplus of $100 million. What is the overall balance of payments?
A.
$50 million surplus
B.
$50 million deficit
C.
$150 million surplus
D.
$150 million deficit
Show solution
Solution
Overall balance of payments = Current account + Capital account = -$150 million + $100 million = -$50 million deficit.
Correct Answer:
B
— $50 million deficit
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Q. A country has a labor force of 50 million and an unemployment rate of 4%. How many people are unemployed?
A.
1 million
B.
2 million
C.
2.5 million
D.
3 million
Show solution
Solution
Unemployed = Labor Force * Unemployment Rate = 50 million * 0.04 = 2 million.
Correct Answer:
B
— 2 million
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Q. A country has a net foreign investment of $400 million and a net foreign liabilities of $600 million. What is the net international investment position?
A.
-$200 million
B.
$200 million
C.
$1 billion
D.
$1.2 billion
Show solution
Solution
Net international investment position = Net foreign investment - Net foreign liabilities = $400 million - $600 million = -$200 million.
Correct Answer:
A
— -$200 million
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Q. A country has a total debt of $500 million and its foreign debt is $300 million. What is the ratio of foreign debt to total debt?
A.
0.6
B.
0.5
C.
0.4
D.
0.3
Show solution
Solution
Ratio of foreign debt to total debt = Foreign debt / Total debt = $300 million / $500 million = 0.6.
Correct Answer:
A
— 0.6
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Q. A country has an unemployment rate of 8%. If there are 1,500,000 people in the workforce, how many are unemployed?
A.
120,000
B.
100,000
C.
80,000
D.
90,000
Show solution
Solution
8% of 1,500,000 is calculated as (8/100) * 1,500,000 = 120,000.
Correct Answer:
A
— 120,000
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Q. A family has a monthly budget of $2,500. If they spend $1,000 on rent, $600 on groceries, and $400 on utilities, how much do they have left?
A.
$500
B.
$600
C.
$700
D.
$800
Show solution
Solution
Total spent = $1,000 + $600 + $400 = $2,000. Remaining = $2,500 - $2,000 = $500.
Correct Answer:
C
— $700
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Q. A farmer has 300 fruit trees. If 1/4 of them are apple trees, how many apple trees does he have?
A.
50 trees
B.
75 trees
C.
100 trees
D.
150 trees
Show solution
Solution
300 trees * (1/4) = 75 trees
Correct Answer:
B
— 75 trees
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Q. A farmer needs to plant seeds in a rectangular field of 80 meters by 60 meters. If he plants 2 seeds per square meter, how many seeds does he need?
A.
9600 seeds
B.
12000 seeds
C.
14400 seeds
D.
16000 seeds
Show solution
Solution
(80 m * 60 m) * 2 seeds/m² = 9600 seeds
Correct Answer:
C
— 14400 seeds
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Q. A farmer sells 200 kg of potatoes for $400. What is the price per kg of potatoes?
A.
$1.50
B.
$2.00
C.
$2.50
D.
$3.00
Show solution
Solution
$400 / 200 kg = $2.00 per kg
Correct Answer:
B
— $2.00
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Q. A field has a length of 100 meters and a width of 50 meters. What is the area of the field in acres? (1 acre = 4046.86 m²)
A.
1.23 acres
B.
1.50 acres
C.
2.00 acres
D.
2.50 acres
Show solution
Solution
(100 m * 50 m) / 4046.86 m² = 1.23 acres
Correct Answer:
A
— 1.23 acres
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Q. A government program aims to reduce unemployment by 25%. If the current number of unemployed is 200,000, how many people should find jobs to meet this goal?
A.
50,000
B.
60,000
C.
40,000
D.
30,000
Show solution
Solution
25% of 200,000 is calculated as (25/100) * 200,000 = 50,000.
Correct Answer:
A
— 50,000
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Q. A house was bought for $250,000. If the inflation rate is 4% per year, what will be the value of the house after 3 years?
A.
$270,000
B.
$280,000
C.
$290,000
D.
$300,000
Show solution
Solution
Value after 3 years = 250000 * (1 + 0.04)^3 = 250000 * 1.124864 = $281,216 (approx $290,000)
Correct Answer:
C
— $290,000
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Q. A nation has a foreign exchange reserve of $1 billion. If it imports goods worth $300 million, what percentage of the reserves will remain?
A.
70%
B.
30%
C.
60%
D.
40%
Show solution
Solution
Remaining reserves = $1 billion - $300 million = $700 million. Percentage remaining = ($700 million / $1 billion) * 100 = 70%.
Correct Answer:
A
— 70%
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Q. A non-profit organization has a budget of $200,000. If they plan to spend $50,000 on marketing and $30,000 on events, what is the remaining budget?
A.
$120,000
B.
$130,000
C.
$140,000
D.
$150,000
Show solution
Solution
Total spent = $50,000 + $30,000 = $80,000. Remaining budget = $200,000 - $80,000 = $120,000.
Correct Answer:
B
— $130,000
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Q. A product costs $500 today. If the inflation rate is 3% per year, what will be the cost of the product in 5 years?
A.
$575
B.
$600
C.
$615
D.
$625
Show solution
Solution
Cost in 5 years = 500 * (1 + 0.03)^5 = 500 * 1.159274 = $579.64 (approx $625)
Correct Answer:
D
— $625
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Q. A product's price was $80 last year. If the inflation rate is 5%, what will be the price of the product this year?
A.
$82
B.
$84
C.
$85
D.
$86
Show solution
Solution
Price this year = 80 + (5/100 * 80) = 80 + 4 = $84
Correct Answer:
B
— $84
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Q. A project has a budget of $100,000. If 25% of the budget is spent on materials, how much is left?
A.
$75,000
B.
$80,000
C.
$70,000
D.
$60,000
Show solution
Solution
Amount spent on materials = 25% of $100,000 = $25,000. Remaining budget = $100,000 - $25,000 = $75,000.
Correct Answer:
A
— $75,000
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Q. A report states that 5% of the population is unemployed. If the total population is 1,000,000, how many people are employed?
A.
950,000
B.
900,000
C.
850,000
D.
800,000
Show solution
Solution
Unemployed = 5% of 1,000,000 = 50,000. Employed = 1,000,000 - 50,000 = 950,000.
Correct Answer:
A
— 950,000
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Q. A salary of $3000 is adjusted for inflation of 6%. What will be the new salary?
A.
$3180
B.
$3200
C.
$3150
D.
$3100
Show solution
Solution
New salary = 3000 + (6/100 * 3000) = 3000 + 180 = $3180
Correct Answer:
A
— $3180
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Q. A tractor can plow a field in 4 hours. If the field is 20 acres, what is the rate of plowing in acres per hour?
A.
4 acres/hour
B.
5 acres/hour
C.
6 acres/hour
D.
7 acres/hour
Show solution
Solution
20 acres / 4 hours = 5 acres/hour
Correct Answer:
B
— 5 acres/hour
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Q. If a city has a poverty rate of 12% and the total number of poor people is 24,000, what is the total population of the city?
A.
200,000
B.
250,000
C.
300,000
D.
400,000
Show solution
Solution
Total population = 24,000 / 0.12 = 200,000.
Correct Answer:
B
— 250,000
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Q. If a country has a total export value of $1.2 billion and a total import value of $1 billion, what is the export-import ratio?
A.
1.2:1
B.
1:1.2
C.
1:1
D.
1.5:1
Show solution
Solution
Export-import ratio = Exports / Imports = $1.2 billion / $1 billion = 1.2:1.
Correct Answer:
A
— 1.2:1
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Q. If a country receives $200 million in remittances and spends $50 million on foreign aid, what is the net inflow from these transactions?
A.
$150 million
B.
$250 million
C.
$50 million
D.
$100 million
Show solution
Solution
Net inflow = Remittances - Foreign aid = $200 million - $50 million = $150 million.
Correct Answer:
A
— $150 million
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