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: A recession is characterized by
A) Rising employment
B) Rapid economic growth
C) Negative GDP growth
D) Stable prices
✅ Correct Answer: C
Explanation: Recession involves a decline in economic activity, including GDP contraction and increased unemployment.
Q: Market equilibrium occurs when
A) Price is zero
B) Quantity demanded equals quantity supplied
C) Supply is infinite
D) Demand is zero
✅ Correct Answer: B
Explanation: Equilibrium price is the point where the supply and demand curves intersect.
Q: Public goods are distinguished by
A) High prices
B) Excludability
C) Rival consumption
D) Non-excludability
✅ Correct Answer: D
Explanation: Public goods like street lighting cannot exclude non-payers and are non-rival in consumption.
Q: Saving increases when
A) Income decreases
B) Interest rate falls
C) Future uncertainty rises
D) Inflation increases
✅ Correct Answer: C
Explanation: When individuals fear economic instability, they tend to save more as a precautionary measure.
Q: In the short run, at least one factor of production is
A) Variable
B) Redundant
C) Fixed
D) Liquid
✅ Correct Answer: C
Explanation: Short-run analysis assumes that some inputs, like capital, remain fixed while others vary.