Economics MCQs for Army Navy and PAF

Are you aspiring to join the prestigious Pakistan Armed Forces, including the Army, Navy, or PAF, either through a direct/regular commission or a short service commission? Are you concerned about the initial tests, specifically the Economics subject test? We’ve got you covered! Prepare for your Economics MCQs with our free resources, featuring a comprehensive collection of past questions used in previous initial tests. 

At www.pakshaheens.com, we understand the significance of acing these exams and are here to assist you in your journey towards a rewarding career in the Pakistan Armed Forces. Join us to access valuable study materials and unlock your path to success. Start your preparation today and embark on a fulfilling career defending our nation. Your dream career begins here!

Free Practice Tests of Economics MCQs with Answers

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Economics Quiz

A shift in aggregate supply is likely to be:-

Contribution of industrial sectors in Pakistan GDP is:-

When analyzing the impact of variable on the economic system the other things:-

What makes economics scientific:-

If there is a price floor, there will be:-

According to classical model, the level of employment is determined by;-

The profit per sale is a measure of:-

A cut in income tax rate designed to encourage household consumption is an example of:-

Who is the largest figure:-

Aggregate demand will increase if:-

The non Muslim pay zakat:-

When we assume that what is true for the part is also true for the  whole, we are committing:-

If demand is price inelastic:-

Which is the basic economic problem which is common in all economic system:-

Which would cause incomes to become more unequal:-

Over time the price of primary products tend to fall because:-

The power of bank create credit is affected by:-

Inflation reduce the ____:-

In monopoly, in long run equilibrium:-

To maximize sale revenue a firm should produce where:-

Which is not a macroeconomic issue:-

In a regressive tax system the marginal rates of tax______ with more income:-

Who was exponent of welfare economics:-

Balance of payment of a country has a part:-

Which is the basic economic problem which is common in all economic systems:-

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) 

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