SS2 First Term Economics Past Questions And Answers

Here are 20 SS2 Economics questions with options and answers:

Question: What is the primary function of money?

 

A) Store of value

B) Unit of account

C) Medium of exchange

D) All of the above

Answer: D) All of the above

Question: Define inflation.

 

A) Increase in the supply of money

B) Decrease in the general price level

C) Increase in the general price level

D) Stability in the economy

Answer: C) Increase in the general price level

Question: What is the law of demand?

 

A) As price increases, quantity demanded decreases

B) As price increases, quantity demanded increases

C) As price decreases, quantity demanded decreases

D) As price decreases, quantity demanded increases

Answer: A) As price increases, quantity demanded decreases

Question: Define elasticity of demand.

 

A) Measure of the responsiveness of quantity demanded to a change in price

B) Measure of the total demand in the market

C) Measure of consumer preferences

D) Measure of the government’s influence on demand

Answer: A) Measure of the responsiveness of quantity demanded to a change in price

Question: What is the opportunity cost?

 

A) The cost of goods and services

B) The next best alternative forgone when a choice is made

C) The total cost of production

D) The cost of inflation

Answer: B) The next best alternative forgone when a choice is made

Question: Define fiscal policy.

 

A) Government’s control over the money supply

B) Government’s use of taxation and expenditure to influence the economy

C) Central bank’s regulation of interest rates

D) Consumer spending patterns

Answer: B) Government’s use of taxation and expenditure to influence the economy

Question: What is the law of diminishing marginal utility?

 

A) As consumption increases, total utility increases

B) As consumption increases, marginal utility increases

C) As consumption increases, total utility decreases

D) As consumption increases, marginal utility decreases

Answer: D) As consumption increases, marginal utility decreases

Question: Define monopoly.

 

A) Market structure with many sellers

B) Market structure with one seller

C) Market structure with identical products

D) Market structure with differentiated products

Answer: B) Market structure with one seller

Question: What is GDP?

 

A) Gross Domestic Price

B) Gross Domestic Product

C) General Demand and Production

D) Gross Distribution Process

Answer: B) Gross Domestic Product

Question: What is a progressive tax?

 

A) Tax rate decreases as income increases

B) Tax rate increases as income increases

C) Fixed tax rate for all income levels

D) Tax imposed on goods and services

Answer: B) Tax rate increases as income increases

Question: Define externalities.

 

A) Positive or negative side effects of production or consumption that affect third parties

B) Government regulations on businesses

C) Internal factors affecting the market

D) Market equilibrium

Answer: A) Positive or negative side effects of production or consumption that affect third parties

Question: What is a market economy?

 

A) Economic system where the government controls all aspects of production and distribution

B) Economic system where individuals and businesses make decisions about what to produce and consume

C) Economic system based on tradition and customs

D) Economic system with a combination of government and private control

Answer: B) Economic system where individuals and businesses make decisions about what to produce and consume

Question: Define perfect competition.

 

A) Market structure with only one seller

B) Market structure with identical products

C) Market structure with many sellers and differentiated products

D) Market structure with many sellers and identical products

Answer: D) Market structure with many sellers and identical products

Question: What is a budget deficit?

 

A) Excess of government spending over revenue in a given year

B) Excess of government revenue over spending in a given year

C) Balanced government budget

D) Government savings

Answer: A) Excess of government spending over revenue in a given year

Question: Define oligopoly.

 

A) Market structure with only one seller

B) Market structure with many sellers and differentiated products

C) Market structure with few sellers, each offering a similar or identical product

D) Market structure with identical products

Answer: C) Market structure with few sellers, each offering a similar or identical product

Question: What is the Phillips Curve?

 

A) Curve illustrating the relationship between inflation and unemployment

B) Curve illustrating the relationship between demand and supply

C) Curve illustrating the relationship between price and quantity demanded

D) Curve illustrating the relationship between income and consumption

Answer: A) Curve illustrating the relationship between inflation and unemployment

Question: Define trade deficit.

 

A) Excess of exports over imports

B) Excess of imports over exports

C) Balanced trade between two countries

D) Total absence of international trade

Answer: B) Excess of imports over exports

Question: What is a central bank?

 

A) Institution that regulates international trade

B) Institution that issues currency and regulates the money supply

C) Institution that controls fiscal policy

D) Institution that oversees consumer protection

Answer: B) Institution that issues currency and regulates the money supply

Question: Define comparative advantage.

 

A) Ability to produce a good at a lower opportunity cost than another producer

B) Ability to produce a good at a higher opportunity cost than another producer

C) Ability to produce all goods efficiently

D) Ability to control the market price of a good

Answer: A) Ability to produce a good at a lower opportunity cost than another producer

Question: What is a regressive tax?

 

A) Tax rate decreases as income increases

B) Tax rate increases as income increases

C) Fixed t

ax rate for all income levels

D) Tax imposed on luxury goods

Answer: A) Tax rate decreases as income increases