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: Under monopolistic competition, firms produce
A) Homogeneous goods
B) Identical products
C) Differentiated products
D) No goods
✅ Correct Answer: C
Explanation: Monopolistic competition features many firms offering products that are similar but not identical.
Q: Transfer payments include
A) Corporate profits
B) Government salaries
C) Unemployment benefits
D) Investment income
✅ Correct Answer: C
Explanation: Transfer payments are non-exchange payments like pensions or subsidies given without direct return.
Q: National income accounting includes
A) Black market earnings
B) Illegal income
C) Legal production within a country
D) Double counting
✅ Correct Answer: C
Explanation: National income measures the value of officially recorded economic activity in a nation.
Q: Imports exceed exports in case of
A) Trade surplus
B) Balanced trade
C) Trade deficit
D) Budget surplus
✅ Correct Answer: C
Explanation: A trade deficit occurs when a country's import value surpasses its exports.
Q: The production possibilities frontier shows
A) Resources wasted in economy
B) All combinations of goods using idle resources
C) Maximum feasible combinations with given resources
D) Profit curves
✅ Correct Answer: C
Explanation: The PPF depicts the most efficient production combinations possible with current resources and technology.