Online Practice Tests of Economics MCQs
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Free Practice Tests of Economics MCQs with Answers
Economics Questions for Beginners
In economics, the study of how individuals, businesses, and governments allocate resources is known as ___________. (economics)
Demand and supply are fundamental concepts in economics that determine _________ and prices. (quantity)
When the demand for a product exceeds its supply, it often leads to an increase in its _________. (price)
Gross Domestic Product (GDP) measures the ___________ of a country’s economy in a given period. (economic output)
A budget deficit occurs when a government’s expenditures exceed its _________. (revenues)
The principle that individuals and businesses should make decisions that maximize their own self-interest is known as _________. (self-interest)
Inflation is the sustained increase in the ________ level of prices for goods and services. (average)
The economic system where the government owns and controls all resources and production is called _________. (socialism)
A market structure with only a few large firms dominating the industry is known as an _________. (oligopoly)
The Federal Reserve, often referred to as the Fed, is responsible for managing a country’s _________ and controlling inflation. (monetary policy)
Economics Questions and Answers
Economics is the study of how societies manage their limited ___________. (resources)
The law of _________ states that as the price of a good or service decreases, the quantity demanded increases. (demand)
When a country exports more goods and services than it imports, it has a ________ in its balance of trade. (surplus)
In microeconomics, the concept of _________ refers to the next best alternative that must be given up when a choice is made. (opportunity cost)
The total value of all goods and services produced within a country’s borders in a given year is its _________. (Gross Domestic Product or GDP)
A progressive tax system charges higher tax rates on higher __________ incomes. (income)
The study of how people make decisions in a world where resources are limited is a fundamental topic in ___________. (economics)
When the government spends more money than it collects in revenue, it incurs a ____________. (budget deficit)
In economics, the term “utility” represents the ________ or satisfaction derived from consuming a good or service. (pleasure)
The concept of _________ refers to the total quantity of a good or service that consumers are willing and able to purchase at a given price. (demand)
Famous Economics Quizzes with Answers
Adam Smith, often regarded as the father of economics, published his groundbreaking work, “The Wealth of Nations,” in the year ________. (1776)
The Phillips Curve illustrates the trade-off between _______ and inflation in the short run. (unemployment)
The study of how people make choices to satisfy their unlimited wants with limited resources is a central focus of ___________. (economics)
The economic theory known as “trickle-down economics” suggests that tax cuts for the wealthy will lead to increased investment, job creation, and ultimately benefit the _________. (entire economy)
The Gross National Product (GNP) measures the total economic output of a country, including the income earned by its ________ residents. (foreign)
John Maynard Keynes is known for his influential ideas in __________ economics, emphasizing government intervention during economic downturns. (macroeconomics)
The theory of comparative advantage, often associated with economist David Ricardo, explains how countries can benefit from specializing in the production of goods in which they have a _________. (comparative advantage)
The Federal Reserve System, the central banking system of the United States, was established in the year ________. (1913)
A measure of the average price level of goods and services in an economy is called _________. (inflation)
The economic concept of “elasticity” measures how sensitive the quantity demanded or supplied is to a change in ________. (price)
Economics Knowledge for Army Tests with Answers
In economics, the term “opportunity cost” refers to the value of the next best alternative that must be __________ up when a choice is made. (foregone)
The law of _________ states that as the price of a good or service increases, the quantity demanded decreases, all else being equal. (demand)
When a country exports more goods and services than it imports, it has a trade __________. (surplus)
In macroeconomics, Gross Domestic Product (GDP) measures the total value of all goods and services produced within a country’s borders in a given ________. (year)
A progressive tax system charges higher tax rates on higher levels of __________. (income)
The concept of “scarcity” in economics refers to the fundamental problem of having _______ resources to meet unlimited wants. (limited)
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by _______ for a market basket of consumer goods and services. (urban consumers)
In economics, the study of how individuals, businesses, and governments allocate resources is known as _________. (economics)
When the government spends more money than it collects in revenue, it results in a _________. (budget deficit)
The concept of “elasticity” measures how responsive the quantity demanded or supplied of a good is to a change in its _________. (price)
Economics Exam Questions for Army Tests with Answers
In economics, the study of how individuals, businesses, and governments allocate resources is known as ___________. (economics)
A nation’s ___________ is the total value of all goods and services produced within its borders in a given time period. (Gross Domestic Product or GDP)
The law of supply states that as the price of a good or service increases, the quantity supplied by producers ________. (increases)
Inflation is the sustained increase in the _________ level of prices for goods and services. (average)
The concept of “elasticity” measures how sensitive the quantity demanded or supplied is to a change in ________. (price)
A progressive tax system charges higher tax rates on individuals with higher levels of _________. (income)
When a government’s expenditures exceed its revenue, it results in a budget _________. (deficit)
Comparative advantage, a key principle in economics, explains how countries can benefit from specializing in the production of goods they can produce at a ________ cost. (lower)
Microeconomics focuses on the economic behavior of __________ units, such as individuals and firms. (smaller)
The term “monopoly” refers to a market structure where there is a single _________. (seller)
Financial economics MCQs with Answers
Financial economics is the study of how individuals and firms make decisions regarding the allocation of ___________. (financial resources)
The time value of money is a fundamental concept in finance, which states that the value of money _________ over time. (changes)
In finance, the term “diversification” refers to the strategy of spreading investments across different ________ to reduce risk. (assets)
The measure of how much an investment has gained or lost in percentage terms is known as the _________. (rate of return)
In financial markets, the acronym “IPO” stands for Initial ________ Offering. (public)
The efficient market hypothesis (EMH) suggests that all relevant information is already reflected in a security’s _________. (price)
A financial instrument that represents ownership in a corporation is called a _________. (stock)
The systematic risk that affects the overall market, such as economic downturns, is also known as _________. (market risk)
The financial ratio that measures a company’s ability to meet its short-term obligations is the _________. (current ratio)
The process of determining the present value of future cash flows is essential in financial economics and is known as _________. (discounting)
Environmental economics MCQs with Answers
Environmental economics is the study of how economic activity impacts the natural __________. (environment)
The concept of “externalities” in environmental economics refers to the side effects of economic activities that are not reflected in the _________ of those activities. (costs)
A tax imposed on activities that generate pollution or other negative externalities is known as a ________ tax. (Pigouvian)
The economic principle that suggests that individuals will exploit natural resources until their marginal benefit equals their ________ cost is known as the “Tragedy of the Commons.” (marginal)
In environmental economics, the term “sustainability” refers to the capacity to meet the needs of the ________ without compromising future generations. (present)
The market-based approach that allows companies to buy and sell the right to emit pollutants is known as _________ trading. (cap and trade)
The “green economy” promotes economic growth while focusing on reducing environmental _________. (footprint)
The concept of “ecosystem services” encompasses the benefits that humans derive from ________ systems, such as clean water and pollination. (ecosystem)
The valuation of environmental resources, such as clean air and biodiversity, is a key aspect of environmental economics and is often referred to as ________ valuation. (natural)
The economic analysis that seeks to determine the optimal level of pollution control by weighing the costs of reducing pollution against the benefits of environmental protection is known as ________ analysis. (cost-benefit)
Public Economics MCQs with Answers
Public economics is a branch of economics that focuses on the role of ________ in the economy. (government)
The economic theory that suggests that government intervention in markets can lead to improved economic outcomes is known as _________. (market failure)
Taxes imposed on goods and services at the point of purchase are called ________ taxes. (sales)
The study of how government spending and taxation policies affect the overall economy is known as _________. (macroeconomics)
A tax system in which higher-income individuals pay a larger percentage of their income in taxes is considered a _________ tax system. (progressive)
The economic concept that describes the situation when one person’s consumption of a good does not reduce its availability for others is called ________ consumption. (non-rival)
In public economics, the term “public goods” refers to goods that are both ________ and non-excludable. (non-rival)
The principle that suggests that individuals should pay taxes according to their ability to pay is known as _________. (ability-to-pay principle)
Government policies aimed at reducing income inequality and poverty are often referred to as ________ policies. (redistribution)
The economic analysis that compares the costs and benefits of government policies and projects is known as ________ analysis. (cost-benefit)
Business Economics MCQs with Answers
Business economics, also known as managerial economics, applies economic principles to solve _________ problems in a business context. (management)
The concept of “elasticity of demand” measures how responsive the quantity demanded is to changes in _________. (price)
When a business maximizes its profits by producing at a point where marginal revenue equals marginal cost, it operates at the point of ________. (profit maximization)
In business economics, the term “oligopoly” refers to a market structure characterized by _______ sellers. (few)
The process of estimating future costs and revenues to determine the potential profitability of a business decision is called _________ analysis. (cost-benefit)
The total revenue minus the total cost of production represents a firm’s ________ profit. (economic)
The concept of “market equilibrium” occurs when the quantity demanded equals the quantity _________. (supplied)
In business economics, the term “marginal cost” represents the additional cost incurred when producing one more _________. (unit)
The business strategy of setting prices just below whole-dollar amounts (e.g., $9.99 instead of $10) is known as _________ pricing. (psychological)
The analysis of the relationship between the quantity of inputs and the quantity of output produced is a fundamental aspect of _________ economics. (production)
