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: Gross investment includes
A) Exports + imports
B) Wages + profits
C) Net investment + depreciation
D) Savings + taxes
✅ Correct Answer: C
Explanation: Gross investment factors in total capital expenditure, including replacements.
Q: The producer is willing to supply more when
A) Price falls
B) Imports grow
C) Demand declines
D) Price rises
✅ Correct Answer: D
Explanation: Higher prices provide an incentive to produce more.
Q: Real income adjusts for
A) Tax
B) Price ceiling
C) Wages
D) Inflation
✅ Correct Answer: D
Explanation: Real income reflects purchasing power after accounting for inflation.
Q: Commercial banks create money by
A) Lending
B) Importing
C) Printing
D) Investing
✅ Correct Answer: A
Explanation: Banks increase money supply by issuing loans.
Q: Positive externality benefits
A) Third parties
B) Producers only
C) Government only
D) Firms only
✅ Correct Answer: A
Explanation: External benefits spill over to individuals not directly involved in the activity.