SS3 First Term Economics Past Questions And Answers

SS3 Economics questions with options and answers:

 

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

 

a) Fiscal policy

b) Monetary policy

c) Trade policy

d) Industrial policy

 

Answer: b) Monetary policy

 

Question: In economics, what does GDP stand for?

 

a) General Domestic Product

b) Gross Domestic Profit

c) Gross Domestic Product

d) General Domestic Profit

 

Answer: c) Gross Domestic Product

 

Question: What is inflation?

 

a) Increase in the general level of prices

b) Decrease in the general level of prices

c) Stability in the general level of prices

d) Fluctuation in the general level of prices

 

Answer: a) Increase in the general level of prices

 

Question: Which market structure is characterized by a large number of sellers and buyers, homogeneous products, and free entry and exit?

 

a) Monopoly

b) Oligopoly

c) Perfect competition

d) Monopolistic competition

 

Answer: c) Perfect competition

 

Question: What is the opportunity cost of a decision?

 

a) The total cost of the decision

b) The direct cost of the decision

c) The value of the next best alternative foregone

d) The monetary cost of the decision

 

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

 

Question: Which economic system is characterized by private ownership of the means of production and market-driven decision-making?

 

a) Capitalism

b) Socialism

c) Communism

d) Mixed economy

 

Answer: a) Capitalism

 

Question: What is the role of a trade deficit in a country’s economy?

 

a) It stimulates economic growth

b) It has no impact on the economy

c) It may lead to economic instability

d) It reduces unemployment

 

Answer: c) It may lead to economic instability

 

Question: Which factor of production includes all natural resources?

 

a) Labor

b) Capital

c) Entrepreneurship

d) Land

 

Answer: d) Land

 

Question: What is the Laffer Curve used to illustrate in economics?

 

a) Relationship between inflation and unemployment

b) Relationship between government spending and economic growth

c) Relationship between tax rates and government revenue

d) Relationship between interest rates and investment

 

Answer: c) Relationship between tax rates and government revenue

 

Question: What is the formula for calculating the unemployment rate?

 

a) (Number of unemployed / Labor force) x 100

b) (Number of employed / Labor force) x 100

c) (Labor force / Number of unemployed) x 100

d) (Number of unemployed / Number of employed) x 100

 

Answer: a) (Number of unemployed / Labor force) x 100

 

Question: Which organization serves as the lender of last resort for banks in the United States?

 

a) World Bank

b) International Monetary Fund

c) Federal Reserve

d) International Bank for Reconstruction and Development

 

Answer: c) Federal Reserve

 

Question: What is the law of diminishing marginal utility?

 

a) As consumption increases, total satisfaction decreases

b) As consumption increases, total satisfaction remains constant

c) As consumption increases, total satisfaction increases

d) As consumption increases, total satisfaction reaches a maximum

 

Answer: a) As consumption increases, total satisfaction decreases

 

Question: What is the purpose of a budget in economics?

 

a) To maximize profits

b) To allocate resources efficiently

c) To set prices in the market

d) To control inflation

 

Answer: b) To allocate resources efficiently

 

Question: What is a regressive tax?

 

a) Tax rate increases as income increases

b) Tax rate decreases as income increases

c) Same tax rate for all income levels

d) Tax rate is unrelated to income

 

Answer: b) Tax rate decreases as income increases

 

Question: Which economic indicator is used to measure the average change in prices of goods and services over time?

 

a) Unemployment rate

b) Consumer Price Index (CPI)

c) Gross Domestic

Product (GDP)

d) Exchange rate

 

Answer: b) Consumer Price Index (CPI)