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: Structural unemployment occurs due to
A) Seasonal changes
B) Lack of skills for available jobs
C) Economic boom
D) Short-term demand fall
✅ Correct Answer: B
Explanation: Structural unemployment arises from a mismatch between workers’ skills and job requirements.
Q: The Laffer Curve illustrates the relationship between
A) Tax rates and revenue
B) Income and savings
C) Inflation and unemployment
D) Demand and supply
✅ Correct Answer: A
Explanation: The Laffer Curve shows how tax revenue changes with varying tax rates, highlighting a point where higher taxes reduce total revenue.
Q: Price discrimination is practiced under
A) Perfect competition
B) Oligopoly
C) Monopoly
D) Free market
✅ Correct Answer: C
Explanation: Monopolists can set different prices for the same product in different markets or to different buyers.
Q: A rise in nominal GDP may not indicate economic growth when
A) Population increases
B) Price levels remain unchanged
C) Inflation is high
D) Currency depreciates
✅ Correct Answer: C
Explanation: Inflation can inflate nominal GDP figures without reflecting real growth in output.
Q: Voluntary unemployment is when
A) Workers are fired
B) No jobs are available
C) People choose not to work at current wage levels
D) Firms shut down
✅ Correct Answer: C
Explanation: Voluntary unemployment occurs when individuals opt not to accept available jobs at the prevailing wages.