SS1 second Term economics past questions and answers

SS1 second Term economics past questions and answers

Economics questions with options and answers:

Question: What is the primary function of commercial banks in an economy?

A) Fiscal policy

B) Monetary policy

C) Currency printing

D) Credit creation

Answer: D) Credit creation

Question: In the context of demand, what does the term "elasticity" refer to?

A) The responsiveness of quantity demanded to changes in price

B) The total quantity demanded in the market

C) The equilibrium price in the market

D) The government's influence on demand

Answer: A) The responsiveness of quantity demanded to changes in price

Question: Which of the following is a characteristic of monopolistic competition?

A) Many sellers, identical products

B) One seller, unique product

C) Many sellers, differentiated products

D) Few sellers, similar products

Answer: C) Many sellers, differentiated products

Question: What is the term for a situation where the quantity of a good demanded equals the quantity supplied?

A) Surplus

B) Shortage

C) Equilibrium

D) Disequilibrium

Answer: C) Equilibrium

Question: What is the role of the labor market in the economy?

A) Determining exchange rates

B) Regulating interest rates

C) Matching workers with jobs and determining wages

D) Controlling inflation

Answer: C) Matching workers with jobs and determining wages

Question: Which of the following is a characteristic of a traditional economy?

A) Government control of resources

B) Market-driven prices

C) Customs and traditions determine economic activities

D) Private ownership of production means

Answer: C) Customs and traditions determine economic activities

Question: What is the role of the Central Bank in controlling inflation?

A) Increasing government spending

B) Raising interest rates

C) Printing more money

D) Lowering taxes

Answer: B) Raising interest rates

Question: Which type of unemployment occurs due to a downturn in the business cycle?

A) Frictional unemployment

B) Structural unemployment

C) Cyclical unemployment

D) Seasonal unemployment

Answer: C) Cyclical unemployment

Question: What is the difference between a progressive tax and a regressive tax?

A) Progressive tax takes a larger percentage from higher incomes; regressive tax takes a larger percentage from lower incomes

B) Progressive tax takes a larger percentage from lower incomes; regressive tax takes a larger percentage from higher incomes

C) Both have the same tax rate for all income levels

D) Progressive tax is only applied to businesses; regressive tax is only applied to individuals

Answer: A) Progressive tax takes a larger percentage from higher incomes; regressive tax takes a larger percentage from lower incomes

Question: What is the purpose of fiscal policy in an economy?

A) Controlling inflation

B) Regulating interest rates

C) Managing government spending and taxation to influence the economy

D) Printing money

Answer: C) Managing government spending and taxation to influence the economy

Question: What is the term for a situation where the government spends more money than it collects in taxes?

A) Budget surplus

B) Budget deficit

C) Balanced budget

D) Fiscal equilibrium

Answer: B) Budget deficit

Question: In the context of international trade, what does "comparative advantage" mean?

A) The ability of a country to produce all goods more efficiently than another country

B) The ability of a country to produce a good at a lower opportunity cost than another country

C) The ability of a country to produce high-quality goods

D) The ability of a country to produce goods without relying on imports

Answer: B) The ability of a country to produce a good at a lower opportunity cost than another country

Question: What is the purpose of the World Bank?

A) Providing financial aid to countries in need

B) Settling trade disputes

C) Regulating international currencies

D) Promoting global trade

Answer: A) Providing financial aid to countries in need

Question: Which of the following is an example of a public good?

A) Pizza

B) Street lighting

C) Shoes

D) Cars

Answer: B) Street lighting

Question: What is the term for a situation where there is a sustained increase in the general price level of goods and services in an economy?

A) Deflation

B) Stagflation

C) Hyperinflation

D) Inflation

Answer: D) Inflation

Question: What is the role of the Federal Reserve in the United States?

A) Controlling fiscal policy

B) Regulating international trade

C) Conducting monetary policy and regulating banks

D) Managing government spending

Answer: C) Conducting monetary policy and regulating banks

Question: Which economic concept refers to the total value of all goods and services produced by a country's residents and businesses, regardless of the location?

A) GDP

B) CPI

C) GNP

D) PPI

Answer: C) GNP

Question: What is the difference between a public good and a private good?

A) Public goods are provided by the government; private goods are provided by the private sector

B) Public goods have a limited supply; private goods have an unlimited supply

C) Public goods are always free; private goods have a price

D) Public goods are exclusive; private goods are non-exclusive

Answer: A) Public goods are provided by the government; private goods are provided by the private sector

Question: What is the term for the percentage of the labor force that is unemployed and actively seeking employment?

A) Labor participation rate

B) Unemployment rate

C) Employment rate

D) Wage rate

Answer: B) Unemployment rate

Question: Which type of inflation is caused by an increase in the cost of production, leading producers to raise prices?

A) Demand-pull inflation

B) Cost-push inflation

C) Hyperinflation

D) Stagflation

Answer: B) Cost-push inflation