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: Imports exceed exports in a
A) Balanced trade
B) Capital surplus
C) Surplus budget
D) Trade deficit
✅ Correct Answer: D
Explanation: Trade deficit occurs when a country buys more than it sells abroad.
Q: Inflation above target rate prompts
A) More spending
B) Tax exemption
C) Monetary tightening
D) Higher subsidies
✅ Correct Answer: C
Explanation: Central banks may raise interest rates to reduce inflation.
Q: Disposable income is
A) Total salary
B) Investment return
C) Income after taxes
D) Business profit
✅ Correct Answer: C
Explanation: It is the amount of money left after paying taxes.
Q: Consumer surplus equals
A) Market price
B) Cost of production
C) Total revenue
D) Willingness to pay minus actual price
✅ Correct Answer: D
Explanation: It is the difference between what consumers are willing to pay and what they pay.
Q: Price ceiling creates
A) Equilibrium
B) Inflation
C) Surpluses
D) Shortages
✅ Correct Answer: D
Explanation: Artificially low prices can cause demand to exceed supply.