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: Price floor is set to
A) Raise government revenue
B) Control inflation
C) Ensure minimum income for producers
D) Encourage imports
✅ Correct Answer: C
Explanation: Price floors are used to prevent prices from falling below a certain level, protecting producers.
Q: A devaluation of currency results in
A) Increase in exports
B) Decrease in imports
C) Increased purchasing power
D) Higher interest rates
✅ Correct Answer: A
Explanation: Devaluation makes exports cheaper and more competitive in the international market.
Q: Classical economists believe that
A) Markets fail frequently
B) Government intervention is necessary
C) Economy is self-correcting
D) Inflation has no impact
✅ Correct Answer: C
Explanation: Classical theory suggests that markets naturally move toward equilibrium without external interference.
Q: Microeconomics focuses on
A) National income
B) Aggregate demand
C) Individual units like households and firms
D) International trade
✅ Correct Answer: C
Explanation: Microeconomics studies the behavior of individual consumers, firms, and markets.
Q: An increase in productivity leads to
A) Lower output
B) Higher cost
C) Economic growth
D) Less investment
✅ Correct Answer: C
Explanation: Improved productivity enhances output levels and contributes to economic development.