Economics Neco Past Questions And Answers (Objective and Theory)

Each question comes with options and correct answers.

 

Multiple Choice Questions:

Section D: Economic Systems

What is a defining characteristic of a market economy?

a) Centralized planning

b) Government ownership of all resources

c) Private ownership of resources

d) Equal distribution of wealth

 

Answer: c) Private ownership of resources

 

In a command economy, who makes decisions about resource allocation?

a) Consumers

b) Government authorities

c) Market forces

d) Private businesses

 

Answer: b) Government authorities

 

What is the main function of a development bank in an economy?

a) Promoting international trade

b) Providing loans for long-term projects

c) Regulating interest rates

d) Controlling inflation

 

Answer: b) Providing loans for long-term projects

 

Which of the following is a characteristic of monopolistic competition?

a) Many sellers, identical products

b) Few sellers, differentiated products

c) One seller, unique product

d) Few sellers, identical products

 

Answer: b) Few sellers, differentiated products

 

Section E: Economic Indicators

How does the unemployment rate impact an economy?

a) Accelerates economic growth

b) Reduces inflation

c) Indicates underutilization of resources

d) Increases consumer spending

 

Answer: c) Indicates underutilization of resources

 

What is the role of the exchange rate in international trade?

a) Regulating interest rates

b) Influencing inflation

c) Determining the value of one currency in terms of another

d) Controlling fiscal policy

 

Answer: c) Determining the value of one currency in terms of another

 

Section F: Development Economics

Explain the concept of foreign direct investment (FDI) and its impact on a developing economy.

 

Discuss the challenges and benefits of globalization for developing countries.

 

Examine the role of infrastructure development in economic growth.

 

How does education contribute to human capital formation and economic development?

 

Describe the measures a government can take to address income inequality in a developing economy.

 

Section G: International Trade Policies

What is the purpose of trade barriers in international trade?

a) Promoting free trade

b) Encouraging imports

c) Restricting imports and protecting domestic industries

d) Equalizing exchange rates

 

Answer: c) Restricting imports and protecting domestic industries

 

Explain the concept of comparative advantage and its relevance in international trade.

 

Discuss the impact of trade liberalization on a country’s economy.

 

How do tariffs differ from quotas in international trade policies?

 

Evaluate the role of the World Bank in promoting economic development in developing countries.