SS1 First Term Economics Past Questions And Answers

Question: What is the primary function of an economic system?

 

A) Production

B) Distribution

C) Consumption

D) All of the above

Answer: D) All of the above

Question: What is the basic economic problem?

 

A) Scarcity

B) Abundance

C) Surplus

D) Availability

Answer: A) Scarcity

Question: In economics, what does the term “demand” refer to?

 

A) Quantity supplied

B) Quantity demanded

C) Price level

D) Production cost

Answer: B) Quantity demanded

Question: Which factor of production involves the human effort and skills used in the production process?

 

A) Land

B) Labor

C) Capital

D) Entrepreneurship

Answer: B) Labor

Question: What is the law of demand?

 

A) As price decreases, quantity demanded increases

B) As price increases, quantity demanded increases

C) As price decreases, quantity demanded decreases

D) As price increases, quantity demanded decreases

Answer: C) As price decreases, quantity demanded increases

Question: Which type of economic system is characterized by private ownership of resources and market-driven decision-making?

 

A) Capitalism

B) Socialism

C) Communism

D) Mixed economy

Answer: A) Capitalism

Question: What is the opportunity cost of a decision?

 

A) The value of the best alternative forgone

B) The monetary cost of the decision

C) The time spent on the decision

D) The benefits of the decision

Answer: A) The value of the best alternative forgone

Question: Inflation is best defined as a sustained increase in the ________.

 

A) Demand for goods

B) Supply of money

C) General price level

D) Unemployment rate

Answer: C) General price level

Question: What is the function of the Central Bank in an economy?

 

A) Fiscal policy implementation

B) Monetary policy regulation

C) Tax collection

D) Public expenditure

Answer: B) Monetary policy regulation

Question: GDP stands for ________.

 

A) General Domestic Product

B) Gross Development Product

C) Gross Domestic Product

D) Global Domestic Production

Answer: C) Gross Domestic Product

Question: Which market structure is characterized by a large number of sellers offering similar but differentiated products?

A) Monopoly

B) Oligopoly

C) Monopolistic competition

D) Perfect competition

Answer: C) Monopolistic competition

Question: What is a progressive tax system?

A) Tax rate increases as income increases

B) Tax rate decreases as income increases

C) Flat tax rate for all income levels

D) No tax on income

Answer: A) Tax rate increases as income increases

Question: Which economic indicator measures the average prices of a basket of goods and services?

A) Unemployment rate

B) Inflation rate

C) GDP per capita

D) Consumer Price Index (CPI)

Answer: D) Consumer Price Index (CPI)

Question: What is a trade deficit?

A) Exports > Imports

B) Imports > Exports

C) Exports = Imports

D) No trade occurring

Answer: B) Imports > Exports

Question: Which of the following is a capital resource?

A) Money

B) Natural resources

C) Human skills

D) Land

Answer: A) Money

Question: What is the role of an entrepreneur in the production process?

A) Providing land

B) Organizing and managing resources

C) Performing manual labor

D) Consuming goods

Answer: B) Organizing and managing resources

Question: What is the function of the World Trade Organization (WTO)?

A) Regulating global climate

B) Promoting international trade

C) Providing humanitarian aid

D) Enforcing military alliances

Answer: B) Promoting international trade

Question: Which type of unemployment results from changes in technology and demand for certain skills?

A) Frictional unemployment

B) Structural unemployment

C) Cyclical unemployment

D) Seasonal unemployment

Answer: B) Structural unemployment

Question: What is the purpose of fiscal policy?

A) Regulating money supply

B) Controlling inflation

C) Managing government spending and taxation

D) Influencing interest rates

Answer: C) Managing government spending and taxation

Question: In the context of international trade, what does the term “protectionism” refer to?

A) Promoting free trade

B) Restricting trade through tariffs and quotas

C) Encou

raging globalization

D) Eliminating trade barriers

Answer: B) Restricting trade through tariffs and quotas