Q. According to microeconomics, price is determined by:
A). Government policy
B). Demand and supply
C). National income
D). Population growth
Answer: B). Demand and supply
Explanation: Microeconomics explains price determination through the interaction of demand and supply.
Q. Which of the following best defines microeconomics?
A). Study of economy as a whole
B). Study of individual economic behaviour
C). Study of international trade
D). Study of public finance
Answer: B). Study of individual economic behaviour
Explanation: Microeconomics focuses on the behaviour of individual consumers and producers.
Q. Which of the following is a subject matter of macroeconomics?
A). Price of a commodity
B). Cost of production
C). National income
D). Consumer choice
Answer: C). National income
Q. Which economist is associated with modern macroeconomics?
A). Adam Smith
B). Alfred Marshall
C). John Maynard Keynes
D). Lionel Robbins
Answer: C). John Maynard Keynes
Explanation: John Maynard Keynes is regarded as the father of modern macroeconomics.
Q. Who is known as the father of modern economics?
A). Adam Smith
B). Alfred Marshall
C). J.M. Keynes
D). Karl Marx
Answer: A). Adam Smith
Q. The Great Depression started in which year?
A). 1920
B). 1929
C). 1935
D). 1940
Answer: B). 1929
Explanation: Unemployment rose sharply worldwide due to declining production and demand.
Q. Unemployment rate refers to:
A). Percentage of total population without a job
B). Percentage of labour force without a job
C). Total number of employed people
D). Total number of students
Answer: B). Percentage of labour force without a job
Explanation: Unemployment rate measures the proportion of the labour force that is willing and able to work but is unemployed.
Q. Who wrote The Wealth of Nations?
A). Adam Smith
B). Karl Marx
C). Alfred Marshall
D). J.M. Keynes
Answer: A). Adam Smith
Explanation: The Wealth of Nations was written by Adam Smith in 1776 and is considered the foundation of modern economics.
Q. Which of the following books was written by John Maynard Keynes?
A). The General Theory of Employment, Interest and Money
B). The Wealth of Nations
C). Das Kapital
D). Principles of Economics
Answer: A). The General Theory of Employment, Interest and Money
Explanation: Keynes wrote The General Theory of Employment, Interest and Money (1936), which became the foundation of modern macroeconomics.
Q. Entrepreneurs are considered as:
A). Risk-takers and innovators
B). Wage earners
C). Government officials
D). Passive investors
Answer: A). Risk-takers and innovators
Explanation: Entrepreneurs take business risks and introduce new products, techniques, or methods.
Q. Which of the following is NOT a feature of capitalist countries?
A). Price mechanism
B). Profit motive
C). Free competition
D). Central planning of all industries
Answer: D). Central planning of all industries
Explanation: Central planning is a feature of socialist economies, not capitalist countries.
Q. Examples of capitalist countries include:
A). United States, United Kingdom, Japan
B). Cuba, North Korea, Venezuela
C). India, China, Brazil
D). Soviet Union, East Germany, China
Answer: A). United States, United Kingdom, Japan
Explanation: Countries like the US, UK, and Japan follow capitalist principles with private enterprise and market economy.