Economics MCQ Questions with Answer for all Competitive Exams

Explanation: From an economic point of view there are two approaches to study economics.

(i) Micro Approach, (ii) Macro Approach

The micro approach studies at a single point or individual levels like the study of human behavior in relation to price change and its effect on demand and supply etc.

The macro approach studies at a population point or wholesome level like the study of interest rates in relation to inflation and deflation etc.

Explanation: ​Supply-side economics lays greater emphasis on the point of view of the producer whereas the demand-side economics lays emphasis on the interest of the consumer.

Explanation: Government debt is the debt owed by the central government. The government usually borrows by issuing securities, government bonds, bills through Provident funds, etc. However, pension policies are not included in the list.

Explanation: ​The concept of a mixed economy evolved from the ideas of Keynes. The concept of a mixed economy means that both private enterprises and public enterprises coexist. However, the condition attached is that private enterprises must work to serving society rather than having only self-interest. Further, private enterprises may not be allowed in every sector of the economy like an area of national importance. ​​There are 3 types of the economic system:- ​

1.​ Capitalism – the private ownership of the means of production (capital) and a market economy for co-ordination. As-corporate capitalism

​2. ​Mixed Economy Example – American school, Japanese system, Nordic model, Social corporatism, etc ​

3.​ Socialism – In this economic system, two coordinating mechanisms (planning and market) subtended into a planned socialist and market socialist system.

Explanation: Yamuna Nagar, Guwahati, and Ballarpur are famous for the paper manufacturing industry. Yamuna Nagar is in Haryana, Guwahati is in Assam and Ballarpur is in Maharashtra.

Explanation: Adam Smith is known as the father of economics. He was a pioneer in identifying the market as a force i.e. self-regulating force by giving an idea of invisible hands in his first book “The theory of moral sentiments”.

Explanation: Art. 269 says taxes on income other than agricultural income shall be levied and collected by the Government of India and distributed between the Union and States. Entry 46 in the state list of Seventh Schedule. This gives power to the state governments to impose an agricultural income tax.

Explanation: Rent is surplus earn by the organization and it does not include rent as the payment of land but also other surplus earning by other factors.

Explanation: Market economy is also called an open economy in which price is decided according to demand and supply in the market. There is less or no government intervention.

Explanation: Economics is the study of human behavior (i.e. social science) in relation to the utilization of scarce resources available with maximum efficiency for the production and distribution of goods and services.