SS2 Third Term Economics Past Questions And Answers

20 SS2 Economics questions with options and answers:

 

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

 

A) Barter

B) Store of value

C) Double coincidence of wants

D) Commodity

Answer: B) Store of value

 

Question: In economics, what does GDP stand for?

 

A) Gross Domestic Product

B) General Development Plan

C) Goods and Distribution Process

D) Government Debt and Profits

Answer: A) Gross Domestic Product

 

Question: What is the law of demand?

 

A) As price increases, quantity demanded decreases

B) As price decreases, quantity demanded increases

C) Price and quantity demanded are unrelated

D) Quantity demanded is always constant

Answer: B) As price decreases, quantity demanded increases

 

Question: Which market structure is characterized by a large number of sellers, differentiated products, and easy entry and exit?

 

A) Monopoly

B) Oligopoly

C) Monopolistic competition

D) Perfect competition

Answer: C) Monopolistic competition

 

Question: What is inflation?

 

A) Increase in the overall price level of goods and services

B) Decrease in the overall price level of goods and services

C) Stagnation of the economy

D) Increase in the production of goods and services

Answer: A) Increase in the overall price level of goods and services

 

Question: What is the opportunity cost of a decision?

 

A) The monetary cost

B) The benefit of the decision

C) The value of the next best alternative forgone

D) The total cost incurred

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

 

Question: Which economic system is characterized by government ownership and control of resources and means of production?

 

A) Capitalism

B) Socialism

C) Mixed economy

D) Market economy

Answer: B) Socialism

 

Question: What is a budget deficit?

 

A) When government expenditures exceed revenues

B) When government revenues exceed expenditures

C) When there is a balanced budget

D) When inflation occurs

Answer: A) When government expenditures exceed revenues

 

Question: What does the term “invisible hand” refer to in economics?

 

A) Government intervention in the market

B) Consumer preferences

C) Self-interest guiding individuals to promote the overall good

D) Barter system

Answer: C) Self-interest guiding individuals to promote the overall good

 

Question: Which of the following is a factor of production?

 

A) Money

B) Labor

C) Stocks

D) Bonds

Answer: B) Labor

 

Question: What is the role of the central bank in monetary policy?

 

A) Fiscal policy implementation

B) Controlling inflation and money supply

C) Tax collection

D) Government expenditure planning

Answer: B) Controlling inflation and money supply

 

Question: What is the Law of Diminishing Marginal Utility?

 

A) As consumption increases, total utility increases

B) The more you have of a good, the less satisfaction each additional unit provides

C) Utility is constant regardless of consumption

D) Marginal cost always equals marginal utility

Answer: B) The more you have of a good, the less satisfaction each additional unit provides

 

Question: Which market structure is characterized by a single seller with no close substitutes?

 

A) Oligopoly

B) Monopolistic competition

C) Monopoly

D) Perfect competition

Answer: C) Monopoly

 

Question: What is the role of entrepreneurship in an economy?

 

A) Buying and selling goods

B) Providing financial services

C) Innovating and taking risks to create and run businesses

D) Government regulation

Answer: C) Innovating and taking risks to create and run businesses

 

Question: What is a progressive tax system?

 

A) Tax rate increases as income increases

B) Flat tax rate for everyone

C) Tax rate decreases as income increases

D) No taxes imposed

Answer: A) Tax rate increases as income increases

 

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

 

A) Regional economic integration

B) Promotion of free trade and resolving trade disputes

C) Monetary policy regulation

D) Nationalization of industries

Answer: B) Promotion of free trade and resolving trade disputes

 

Question: What is a public good in economics?

 

A) Excludable and rivalrous

B) Non-excludable and non-rivalrous

C) Excludable but non-rivalrous

D) Non-excludable but rivalrous

Answer: B) Non-excludable and non-rivalrous

 

Question: Define fiscal policy.

 

A) Government’s control over the money supply

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

C) Central bank’s regulation of interest rates

D) Market-driven allocation of resources

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

 

Question: What is the law of supply?

 

A) As price increases, quantity supplied increases

B) As price decreases, quantity supplied decreases

C) Price and quantity supplied are unrelated

D) Quantity supplied is always constant

Answer: A) As price increases, quantity supplied increases

 

Question: Define the term “elasticity” in economics.

 

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

B) Total revenue divided by the quantity sold

C) Government’s ability to cont

rol inflation

D) Percentage change in GDP

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