Economics MCQ Questions with Answer for all Competitive Exams

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Economics MCQ Questions with Answer

Q11. Price theory is also known as-

(a) Macro Economics

(b) Development Economics

(c) Public Economics

(d) Micro Economics

Answer: (d)

Explanation: Price theory is associated with microeconomics which is basically concerned with the determination of output and price for individual firms or industry.

Q12. Which of the following is a part of the tertiary sector?

(a) Power and Transportation

(b) Animal Husbandry

(c) Cotton Manufacturing

(d) Cultivation of Crops.

Answer: (a)

Explanation: Classification of the economy on the basis of production can be done into three sectors Primary sectors- deals with production from natural resources Secondary sector-production from the production of the primary sector as raw material Tertiary sector- activities related to services i.e. intangible activities.

Q13. Equilibrium is a condition that can-

(a) Never change

(b) Change only if some outside factor changes

(c) Change only if some internal factor changes

(d) Change only if government policies change

Answer: (c)

Explanation: Equilibrium is a state where the quantity demanded equals quantity supplied. So in case of change, the change will be either in demand or in supply and these changes are internal change.

Q14. The supply of labor in the economy depends on-

(a) Population

(b) National income

(c) Per capita income

(d) Natural resources

Answer: (a)

Explanation: Supply of labor means the availability of persons working hours. The supply of labor depends on several factors like population, working-age, working hours, income, etc.

Also Read: Physics MCQ Questions  with Answer for all Competitive Exams

Q15. The Narasimham Committee for financial sector Reforms has suggested a reduction in

(a) SLR and CRR

(b) SLR, CRR and Priority Sector Financing

(c) SLR and Financing to the capital goods sector

(d) CRR, Priority Sector Financing and Financing to the capital goods sector

Answer: (b)

Explanation: Narasimham Committee for Financial Sector Reforms (1991) has suggested a reduction in SLR, CRR, and priority sector financing reducing it from 40% to 10%. Most of the suggestions of the committee were not implemented.

Q16. Match List-I with List-II and select the correct answer:

List-I(Hazardous industries)List-II (Located at)
A. Glass Industry1. Moradabad
B. Brassware Industry2. Marakpur
C. Slate Industry3. Ferozabad
D. Handmade Carpet4. Mirzapur Industry


(a) A-3; B-1; C-2; D-4

(b) A-1; B-3; C-4; D-2

(c) A-3; B-1; C-4; D-2

(d) A-1; B-3; C-2; D-4

Answer: (a)

Explanation: Hazardous industries Location

A. Glass Industry – Firozabad
B. Brassware Industry – Moradabad
C. Slate Industry – Marakpur
D. Handmade Carpet Industry – Mirzapur

All these industries use child labor filling of a public interest petition in the Supreme Court is pending.

Q17. Demand in Economics means:

(a) Aggregate demand

(b) Market demand

(c) Individual demand

(d) Demand backed by purchasing power

Answer: (d)

Explanation: Need is a state of mind in which someone felt deprived of something. To fulfill need the individual will have to have purchasing power and willingness to buy them, this need will convert into demand.

Q18. Consider the following statements:

Industrial development in India, to an extent, is constrained by:

  1. Lack of adequate entrepreneurship and leadership in business
  2. Lack of savings to invest
  3. Lack of technology, skills, and infrastructure
  4. the limited purchasing power among the larger masses

Which of the above statements are correct?

(a) 1, 2 and 3

(b) 1, 3 and 4

(c) 2, 3 and 4

(d) 1, 2 and 4

Answer: (b)

Explanation: A large scale industry will employ more capital, have a large turn power, and will use more of power. It will use less labor as it is capital intensive. India has a very high rate of savings. It is structural constraints that limit the rate of growth.

Q19. Classification of an enterprise into the public or private sector is based on​​​​

(a)  ​Number of employees in the enterprise ​

(b)  ​Ownership of assets of the enterprise

​(c)  ​Employment conditions for workers in the enterprise ​

(d)  ​Nature of products manufactured by the enterprise

Answer: (b) ​

Explanation: A company organized for commercial purposes is called an enterprise. Classification of an enterprise into the public or private sector is based on ownership of assets of the enterprise.

Q20. It will be true to classify India as ​

(a) ​A food-deficit economy ​

(b) ​A labor-surplus economy

​(c) ​A trade-surplus economy

​(d) ​A capital-surplus economy

Answer: (b)

Explanation: ​India is a labor-surplus economy because in India there is disguised unemployment along with under-employment which means that qualified, skilled workforce willing to work is available but there are not enough employment opportunities.

​​Trade Surplus Economy – Economic measure of positive Balance of trade where a country’s export exceed its imports. ​​

Surplus Labour is a concept used by Karl Marx in his critique of the political economy. ​​

Capital Surplus – It is equity which cannot otherwise be classified as capital stock or retained earnings.

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