Economics MCQs
Economics MCQs for CSS, PMS, and competitive exams covering microeconomics, macroeconomics, market structures, fiscal and monetary policy, development, and trade. Test conceptual clarity, analytical skills, and real-world application of economic principles.
Q: The concept of utility in economics refers to
A) Monetary gain
B) Production cost
C) Satisfaction derived from consumption
D) Trade balance
✅ Correct Answer: C
Explanation: Utility measures the level of satisfaction a consumer gains from consuming goods or services.
Q: Hyperinflation is defined by
A) Moderate rise in prices
B) Decline in wages
C) Extremely rapid and uncontrolled price increase
D) Drop in GDP
✅ Correct Answer: C
Explanation: Hyperinflation represents an excessive and accelerating rise in prices, usually above 50% per month.
Q: A regressive tax structure places a higher burden on
A) High-income earners
B) Middle class
C) Low-income earners
D) Government
✅ Correct Answer: C
Explanation: Regressive taxes take a larger percentage of income from the poor than from the wealthy.
Q: The term ‘invisible hand’ is associated with
A) Karl Marx
B) John Maynard Keynes
C) Adam Smith
D) Alfred Marshall
✅ Correct Answer: C
Explanation: Adam Smith introduced the concept of the ‘invisible hand’ to explain how markets self-regulate through individual pursuit of self-interest.
Q: Primary sector in an economy deals with
A) Manufacturing
B) Services
C) Natural resources extraction
D) Technology
✅ Correct Answer: C
Explanation: Activities like agriculture, fishing, and mining fall under the primary sector as they involve natural resources.