SS3 second Term economics past questions and answers

SS3 second Term economics past questions and answers

Question: What is the difference between explicit and implicit costs in economics?

a) Explicit costs are measurable, while implicit costs are difficult to quantify

b) Explicit costs are opportunity costs, while implicit costs are out-of-pocket expenses

c) Explicit costs are long-term, while implicit costs are short-term

d) Explicit costs are fixed, while implicit costs are variable

Answer: b) Explicit costs are opportunity costs, while implicit costs are out-of-pocket expenses

Question: What is the role of the Consumer Price Index (CPI) in measuring inflation?

a) It measures the overall level of economic activity

b) It measures changes in the prices of a basket of consumer goods and services

c) It measures the unemployment rate in an economy

d) It measures the balance of payments of a country

Answer: b) It measures changes in the prices of a basket of consumer goods and services

Question: What is the law of diminishing marginal returns in the production process?

a) Each additional unit of input produces increasing marginal output

b) Each additional unit of input produces decreasing marginal output

c) Total production remains constant regardless of input

d) Marginal cost is constant throughout the production process

Answer: b) Each additional unit of input produces decreasing marginal output

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

a) Regressive tax rates increase with income, while progressive tax rates decrease with income

b) Regressive taxes take a larger percentage from low-income earners, while progressive taxes take a larger percentage from high-income earners

c) Regressive taxes are only applied to luxury goods, while progressive taxes apply to all goods and services

d) Regressive taxes are determined by market forces, while progressive taxes are set by the government

Answer: b) Regressive taxes take a larger percentage from low-income earners, while progressive taxes take a larger percentage from high-income earners

Question: What is the concept of a public good in economics?

a) Goods and services provided by private companies

b) Goods and services that are non-excludable and non-rivalrous

c) Goods and services with high prices and limited availability

d) Goods and services exclusively provided by the government

Answer: b) Goods and services that are non-excludable and non-rivalrous

Question: What is the difference between a trade surplus and a trade deficit?

a) Both refer to the same situation of exporting more than importing

b) A trade surplus occurs when exports exceed imports, while a trade deficit occurs when imports exceed exports

c) A trade surplus occurs when imports exceed exports, while a trade deficit occurs when exports exceed imports

d) Both refer to the same situation of importing more than exporting

Answer: b) A trade surplus occurs when exports exceed imports, while a trade deficit occurs when imports exceed exports

Question: What is the concept of elasticity of supply in economics?

a) The responsiveness of quantity supplied to a change in price

b) The total quantity supplied in the market

c) The government's control over supply and demand

d) The level of competition among suppliers

Answer: a) The responsiveness of quantity supplied to a change in price

Question: In macroeconomics, what is the significance of the "labor force participation rate"?

a) The percentage of the working-age population that is employed

b) The percentage of the population that is employed or actively seeking employment

c) The total number of employed individuals in an economy

d) The percentage of the population that is unemployed

Answer: b) The percentage of the population that is employed or actively seeking employment

Question: What is the role of the Federal Deposit Insurance Corporation (FDIC) in the banking sector?

a) Regulating interest rates

b) Ensuring the safety of deposits in banks

c) Facilitating international trade agreements

d) Controlling government spending

Answer: b) Ensuring the safety of deposits in banks

Question: Define the term "opportunity cost."

a) The actual cost incurred in making a decision

b) The monetary cost of an alternative

c) The value of the next best alternative forgone

d) The cost of producing an additional unit

Answer: c) The value of the next best alternative forgone

Question: What is the concept of a budget deficit in fiscal policy?

a) When government spending exceeds government revenue

b) When government revenue exceeds government spending

c) When the overall national income exceeds government expenditure

d) When the government achieves a surplus in its budget

Answer: a) When government spending exceeds government revenue

Question: What is the difference between a subsidy and a tax in economic policy?

a) Both are forms of taxation

b) Subsidies increase prices, while taxes decrease prices

c) Subsidies are government payments to support certain industries, while taxes are charges imposed on individuals or businesses

d) Subsidies decrease prices, while taxes increase prices

Answer: c) Subsidies are government payments to support certain industries, while taxes are charges imposed on individuals or businesses

Question: Define the term "monetary policy."

a) Government policies related to taxation and spending

b) Policies aimed at regulating the money supply and interest rates

c) Policies related to international trade agreements

d) Policies aimed at controlling inflation

Answer: b) Policies aimed at regulating the money supply and interest rates

Question: What is the role of the World Bank in international economics?

a) Providing financial assistance to countries facing balance of payments problems

b) Facilitating negotiations and resolving trade disputes

c) Promoting global environmental sustainability

d) Providing long-term loans for development projects in developing countries

Answer: d) Providing long-term loans for development projects in developing countries

Question: What is the concept of the multiplier effect in fiscal policy?

a) The impact of a change in spending on overall economic activity

b) The impact of taxes on consumer behavior

c) The effect of interest rates on investment

d) The effect of inflation on purchasing power

Answer: a) The impact of a change in spending on overall economic activity