Economics Questions And Answers Pdf : Those candidates who are preparing for competitive exams, today in this post we are giving the most important questions of Economics and their answers, which have already appeared in the UPSC exam. From these questions the candidate will know what type of questions of Economics are asked in the competition exams. Therefore, in this post we have given important questions and answers related to Economics Multiple Choice Questions and Economics Objective. Read them carefully and prepare for your exam.
Question 1. What is the main objective of economics?
(A) Calculation of wealth
(B) Management of resources
(C) Population calculation
(D) Calculation of inflation
Answer: Management of resources
Question 2. What is the relationship between demand and supply called?
(A) Production theory
(B) Market theory
(C) Pricing theory
(D) Law of demand and supply
Answer: Law of demand and supply
Question 3. On which factor does ‘price’ depend?
(A) Production cost
(B) Advertising cost
(C) Labour cost
(D) Competition in the market
Answer: Production cost
Question 4. What is meant by ‘inflation’?
(A) Fall in prices
(B) Stability in prices
(C) Rise in prices
(D) Shortage of money
Answer: Rise in prices
Question 5. What is meant by ‘market’?
(A) Place for buying and selling
(B) Exchange of goods only
(C) Trade in services only
(D) Place controlled by the government
Answer: Place for buying and selling
Question 6. What is ‘balance of trade’?
(A) Difference between export and import
(B) Balance of government revenue and expenditure
(C) Balance of textile industry
(D) Balance of agricultural production
Answer: Difference between export and import
Question 7. What is the main role of the ‘Central Bank’?
(A) Giving loans
(B) Controlling monetary policy
(C) Collecting taxes
(D) Fixing the price of clothes in the market
Answer: Controlling monetary policy
Question 8. On what does ‘demand’ depend?
(A) Consumer’s income
(B) Cost of production
(C) Government policy
(D) Quality of product
Answer: Consumer’s income
Question 9. What is the full form of ‘GDP’?
(A) Gross Domestic Product
(B) General Domestic Profit
(C) Global Development Policy
(D) Gross Direct Purchase
Answer: Gross Domestic Product
Question 10. What is called ‘Direct Tax’?
(A) The tax which is paid directly to the government
(B) The tax which is levied on goods
(C) The tax which is levied on services
(D) The tax which is levied on export
Answer: The tax which is paid directly to the government
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Question 11. ‘Price policy’ is implemented for what purpose?
(A) To maintain price stability in the market
(B) To control government expenditure
(C) To increase exports
(D) To control agricultural production
Answer: To maintain price stability in the market
Question 12. ‘Interest rate’ depends on what?
(A) Bank policy
(B) Government policy
(C) Market conditions
(D) All
Answer: All
Question 13. The value of ‘currency’ is determined
by (A) Market forces
(B) Government
(C) Central Bank
(D) International Monetary Fund
Answer: Central Bank
Question 14. What is a ‘stock market’?
(A) Place for sale of goods
(B) Centre for trading of services
(C) Place for buying and selling of shares of companies
(D) Centre for trading of government bonds
Answer: Place for buying and selling of shares of companies
Question 15. What is the main purpose of ‘tax collection’?
(A) To meet the government’s expenses
(B) To maintain balance in the market
(C) To increase exports
(D) To control inflation
Answer: To meet the government’s expenses
Question 16. What happens in a ‘competitive market’?
(A) Sale of the same kind of goods by many sellers
(B) Sale of the same kind of goods by one seller
(C) Government control of the price of goods
(D) Determination of the price of goods by consumers
Answer: Sale of the same kind of goods by many sellers
Question 17. What is called ‘dividend’?
(A) Amount of profit given to shareholders
(B) Amount of tax paid
(C) Government assistance
(D) Amount of interest of the company
Answer: Amount of profit given to shareholders
Question 18. What is the main feature of the ‘banking sector’?
(A) Determination of interest rates
(B) Giving loans
(C) Collection of taxes
(D) Implementation of monetary policy
Answer: Giving loans
Question 19. On whom is ‘Income Tax’ applicable?
(A) On the income of individuals
(B) On the income of companies
(C) On the income of the government
(D) On the income of businessmen
Answer: On the income of individuals
Question 20. What is ‘Minimum Support Price’?
(A) Minimum price for agricultural products
(B) Minimum price for industries
(C) Minimum price for government services
(D) Minimum price for exports
Answer: Minimum price for agricultural products
Question 21. What is the ‘Union Budget’?
(A) Annual statement of government income and expenditure
(B) List of agricultural products
(C) Performance statement of industries
(D) Statement of education system
Answer: Annual statement of government income and expenditure
Question 22. What is meant by ‘direct investment’?
(A) Investment in goods
(B) Investment in services
(C) Direct investment in other countries
(D) Investment in agriculture
Answer: Direct investment in other countries
Question 23. What is ‘bank rate’?
(A) Rate charged by banks to customers
(B) Rate charged by the central bank to other banks
(C) Rate fixed by the government
(D) Rate determined as per the demand in the market
Answer: Rate charged by the central bank to other banks
Question 24. What is meant by ‘nationalisation’?
(A) Nationalisation of private companies
(B) Privatisation of government companies
(C) Creation of trading companies
(D) Expansion of international trade
Answer: Nationalisation of private companies
Question 25. What is meant by ‘Estimated Budget’?
(A) Estimation of future expenditure and income
(B) Statement of current expenditure and income
(C) Performance of banking sector
(D) Statement of education sector
Answer: Estimation of future expenditure and income
Question 26. What is the importance of ‘Gross Domestic Product’?
(A) Measurement of economic condition of a country
(B) Measurement of export and import
(C) Measurement of banking sector
(D) Measurement of agricultural production
Answer: Measurement of economic condition of a country
Question 27. What is meant by ‘fiscal deficit’?
(A) Difference between income and expenditure of the government
(B) Banking deficit
(C) Industries deficit
(D) Trade deficit
Answer: Difference between income and expenditure of the government
Question 28. What type of ‘direct tax’ is there?
(A) Income tax
(B) Sales tax
(C) Service tax
(D) Excise duty
Answer: Income tax
Question 29. What is meant by ‘exchange rate’?
(A) Rate between currencies of different countries
(B) Banking rate
(C) Interest rate
(D) Trade rate
Answer: Rate between currencies of different countries
Question 30. What is called ‘growth rate’?
(A) The amount of money added in a year
(B) The rate of economic growth of a country
(C) The rate of growth of the banking sector
(D) The rate of government expenditure
Answer: The rate of economic growth of a country
Question 31. What is the function of the ‘Central Bank’?
(A) Managing currency
(B) Controlling government services
(C) Managing agriculture
(D) Managing industries
Answer: Managing currency
Question 32. What is meant by ‘retail inflation’?
(A) Increase in the prices of consumer goods
(B) Increase in the prices of industrial goods
(C) Increase in the prices of government services
(D) Increase in the prices of agricultural products
Answer: Increase in the prices of consumer goods
Question 33. What is meant by ‘public sector’?
(A) Government industries and services
(B) Private industries and services
(C) Agriculture and trade
(D) International trade
Answer: Government industries and services
Question 34. What is meant by ‘black money’?
(A) Undeclared money
(B) Government money
(C) Commercial money
(D) Agricultural money
Answer: Undeclared money
Question 35. What is meant by ‘recession’?
(A) Decline in economic activities
(B) Increase in the price of clothes in the market
(C) Increase in agricultural production
(D) Growth in the banking sector
Answer: Decline in economic activities
Question 36. Which activities come under the ‘secondary sector’?
(A) Agriculture
(B) Industry
(C) Services
(D) Trade
Answer: Industry
Question 37. What is meant by ‘Foreign Direct Investment’ (FDI)?
(A) Investment by foreign companies in a country
(B) Investment in foreign banks
(C) Investment in foreign agriculture
(D) Investment in foreign trade
Ans: Investment by foreign companies in a country
Question 38. What is meant by ‘economy’?
(A) The set of financial and production activities of a country
(B) Agricultural activities of a country
(C) Industrial activities of a country
(D) Service sector activities of a country
Ans: The set of financial and production activities of a country
Question 39. What is the meaning of ‘disinvestment’?
(A) Sale of stake in government institutions
(B) Sale of stake in private companies
(C) Sale of agricultural products
(D) Sale of industrial products
Answer: Sale of stake in government institutions
Question 40. What is a ‘competitive market’?
(A) Where many sellers sell similar goods
(B) Where only one seller sells clothes
(C) Where there is government control
(D) Where the price is determined by the consumer
Answer: Where many sellers sell similar goods
Question 41. What is ‘Fiscal Policy’?
(A) Policy of controlling expenditure and taxation by the government
(B) Policy of controlling the price of goods in the market
(C) Policy of controlling banking rates
(D) Policy of controlling agricultural production
Answer: Policy of controlling expenditure and taxation by the government
Question 42. ‘Import duty’ is which type of tax?
(A) Direct tax
(B) Indirect tax
(C) Service tax
(D) Export tax
Answer: Indirect tax
Question 43. For what purpose were ‘Rural Banks’ established?
(A) Expansion of financial services in rural areas
(B) Expansion of business activities in urban areas
(C) Expansion of government services
(D) Expansion of agricultural production
Answer: Expansion of financial services in rural areas
Question 44. What is the function of ‘money market’?
(A) Trading of short-term financial instruments
(B) Trading of long-term financial instruments
(C) Trading of clothes
(D) Trading of agricultural products
Answer: Trading of short-term financial instruments
Question 45. What is ‘foreign currency’?
(A) Currencies of other countries
(B) Domestic currencies
(C) Trade currencies
(D) Agricultural currencies
Answer: Currencies of other countries
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