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: An increase in general price levels is termed
A) Deflation
B) Inflation
C) Recession
D) Stagnation
✅ Correct Answer: B
Explanation: Inflation denotes a sustained rise in prices, reducing the purchasing power of money.
Q: Monetary policy is mainly controlled by
A) Parliament
B) Ministry of Commerce
C) Central Bank
D) Stock Exchange
✅ Correct Answer: C
Explanation: Central banks, such as the State Bank, implement monetary policy to regulate the money supply and control inflation.
Q: Opportunity cost is best described as
A) Money spent
B) Value of the next best alternative foregone
C) Production cost
D) Waste incurred
✅ Correct Answer: B
Explanation: Opportunity cost refers to the loss of potential gain from the second-best choice when one alternative is chosen.
Q: Supply curve usually slopes
A) Upward
B) Downward
C) Horizontally
D) Vertically
✅ Correct Answer: A
Explanation: As prices increase, producers are willing to supply more, hence an upward-sloping supply curve.
Q: Consumption refers to
A) Exporting goods
B) Using goods and services to satisfy wants
C) Investment in business
D) Saving income
✅ Correct Answer: B
Explanation: Consumption involves the use of goods and services for personal satisfaction and utility.