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: Balance of trade is
A) Export minus import
B) Government expenditure
C) Taxes collected
D) GDP growth
✅ Correct Answer: A
Explanation: It is the difference between a country’s exports and imports.
Q: Subsidy encourages
A) Lower demand
B) Lower supply
C) More production
D) Costly goods
✅ Correct Answer: C
Explanation: Subsidies reduce costs, motivating producers to produce more.
Q: Budget deficit occurs when
A) Trade gap narrows
B) Spending exceeds revenue
C) Revenue exceeds spending
D) Tax rate falls
✅ Correct Answer: B
Explanation: A deficit means the government is spending more than it earns.
Q: Labour is rewarded with
A) Wages
B) Interest
C) Rent
D) Profit
✅ Correct Answer: A
Explanation: Labour earns wages for its contribution to production.
Q: Ceteris paribus means
A) Always constant
B) Other things equal
C) Average value
D) Never changing
✅ Correct Answer: B
Explanation: It assumes other factors remain constant while one changes.