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: Privatization refers to
A) Increasing public ownership
B) Government takeover
C) Transfer of public sector to private ownership
D) Nationalization
✅ Correct Answer: C
Explanation: Privatization reduces government control by shifting services or assets to private hands.
Q: Surplus in the market occurs when
A) Supply exceeds demand
B) Demand exceeds supply
C) Prices are regulated
D) Imports fall
✅ Correct Answer: A
Explanation: A market surplus arises when the quantity supplied surpasses the quantity demanded at the prevailing price.
Q: Currency appreciation results in
A) Cheaper exports
B) Costlier imports
C) Increased trade deficit
D) Stronger purchasing power abroad
✅ Correct Answer: D
Explanation: Appreciation enhances the ability to buy foreign goods more cheaply.
Q: Indirect taxes include
A) Income tax
B) Wealth tax
C) Sales tax
D) Property tax
✅ Correct Answer: C
Explanation: Indirect taxes like sales tax are levied on goods and services and collected from consumers by intermediaries.
Q: Investment increases in an economy when
A) Interest rates are high
B) Business confidence rises
C) Tax rates increase
D) Inflation surges
✅ Correct Answer: B
Explanation: Higher business confidence encourages firms to invest more in productive activities.