SS2 First Term Economics Past Questions And Answers

 

Question: What is the primary function of the Central Bank?

 

A) Fiscal policy regulation

B) Monetary policy regulation

C) Trade promotion

D) Agricultural development

Answer: B) Monetary policy regulation

 

Question: Define the term “Inflation.”

 

A) Decrease in the general price level

B) Increase in the general price level

C) Stable prices over time

D) Fluctuation in exchange rates

Answer: B) Increase in the general price level

 

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 main function of the World Trade Organization (WTO)?

 

A) Currency regulation

B) Promotion of human rights

C) Facilitation of international trade

D) Environmental protection

Answer: C) Facilitation of international trade

 

Question: In the circular flow of income, households receive income through which factor of production?

 

A) Land

B) Labor

C) Capital

D) Entrepreneurship

Answer: B) Labor

 

Question: Which type of unemployment occurs when workers are between jobs or searching for new employment opportunities?

 

A) Frictional unemployment

B) Structural unemployment

C) Cyclical unemployment

D) Seasonal unemployment

Answer: A) Frictional unemployment

 

Question: Define the term “Opportunity Cost.”

 

A) The cost of production inputs

B) The highest-valued alternative that must be forgone to pursue a decision

C) The total cost of goods and services in an economy

D) The monetary value of exports minus imports

Answer: B) The highest-valued alternative that must be forgone to pursue a decision

 

Question: Which of the following is a characteristic of a mixed economy?

 

A) Government ownership of all means of production

B) Private ownership of all means of production

C) Combination of private and government ownership of means of production

D) Absence of government intervention in the economy

Answer: C) Combination of private and government ownership of means of production

 

Question: What is the purpose of the Gross Domestic Product (GDP)?

 

A) To measure the cost of living

B) To measure the overall health of an economy

C) To determine the inflation rate

D) To calculate personal income

Answer: B) To measure the overall health of an economy

 

Question: Which economic system is characterized by government ownership of major industries and central planning?

 

A) Capitalism

B) Socialism

C) Communism

D) Mixed economy

Answer: C) Communism

 

Question: What is the function of the Securities and Exchange Commission (SEC)?

 

A) Monetary policy regulation

B) Fiscal policy regulation

C) Regulation of financial markets and securities

D) Agricultural development

Answer: C) Regulation of financial markets and securities

 

Question: Which factor of production includes natural resources such as land and minerals?

 

A) Labor

B) Capital

C) Entrepreneurship

D) Land

Answer: D) Land

 

Question: What is the law of demand?

 

A) As price decreases, quantity demanded decreases

B) As price decreases, quantity demanded increases

C) As price increases, quantity demanded decreases

D) As price increases, quantity demanded increases

Answer: C) As price increases, quantity demanded decreases

 

Question: Which of the following is a function of commercial banks?

 

A) Monetary policy formulation

B) Issuing currency

C) Regulating interest rates

D) Accepting deposits and providing loans

Answer: D) Accepting deposits and providing loans

 

Question: What is the purpose of a budget deficit?

 

A) To stimulate economic growth

B) To reduce inflation

C) To increase government revenue

D) To achieve a balanced budget

Answer: A) To stimulate economic growth

 

Question: Define the term “Monopoly.”

 

A) A market structure with few sellers

B) A market structure with many sellers

C) A single seller dominating the market

D) An equal distribution of income in an economy

Answer: C) A single seller dominating the market

 

Question: Which economic indicator measures the average change in prices of goods and services over time?

 

A) Gross Domestic Product (GDP)

B) Consumer Price Index (CPI)

C) Unemployment rate

D) Balance of trade

Answer: B) Consumer Price Index (CPI)

 

Question: What is the role of the International Monetary Fund (IMF)?

 

A) Promotion of international trade

B) Providing financial assistance to member countries

C) Regulation of global stock markets

D) Facilitation of regional economic integration

Answer: B) Providing financial assistance to member countries

 

Question: Define the term “Tariff.”

 

A) Tax on imports and exports

B) Subsidy for domestic producers

C) Quota on production levels

D) Currency exchange rate

Answer: A) Tax on imports and exports

 

Question: Which of the following is a characteristic of a market economy?

 

A) Centralized government planning

B) Private ownership of the means of production

C) Equal distribution of wealth

D) Limited individual freedom in economic decisions

Answer: B) Private ownership of the means of production.