100 mcqs of Economics for ppsc fpsc nts test

[nida.imran]

1-25: Microeconomics & Basic Concepts
1. What is the basic economic problem?
A) Inflation
B) Scarcity
C) Taxation
D) Unemployment
Answer: B
2. The opportunity cost of a choice is:
A) The monetary cost
B) The next best alternative foregone
C) The total cost
D) The actual output
Answer: B
3. Which of the following is a positive statement?
A) Government should reduce taxes
B) Unemployment is 6%
C) Rich should pay more taxes
D) Healthcare should be free
Answer: B
4. In perfect competition, the firm’s demand curve is:
A) Downward sloping
B) Vertical
C) Horizontal
D) Upward sloping
Answer: C
5. Which cost remains constant in the short run?
A) Marginal Cost
B) Total Variable Cost
C) Average Variable Cost
D) Fixed Cost
Answer: D
6. Price elasticity of demand measures:
A) Consumer satisfaction
B) Change in demand due to income
C) Responsiveness of demand to price changes
D) None
Answer: C
7. If demand is perfectly inelastic, elasticity is:
A) 1
B) 0
C) Infinity
D) -1
Answer: B
8. A Giffen good is:
A) A luxury good
B) A necessity with negative income effect
C) A good with close substitutes
D) None of these
Answer: B
9. Total Revenue =
A) Price – Cost
B) Price x Quantity
C) Profit – Loss
D) Cost x Output
Answer: B
10. Law of diminishing marginal utility states:
A) Utility increases with more consumption
B) Utility stays constant
C) Extra utility from each unit declines
D) None of the above
Answer: C
11. The slope of an indifference curve is known as:
A) Marginal cost
B) MRS
C) Elasticity
D) Budget constraint
Answer: B
12. A monopoly has:
A) Many sellers
B) One buyer
C) One seller
D) No entry barriers
Answer: C
13. The kinked demand curve theory applies to:
A) Monopoly
B) Perfect competition
C) Oligopoly
D) Monopsony
Answer: C
14. Marginal cost intersects AVC and ATC at their:
A) Lowest points
B) Highest points
C) Midpoints
D) Starting points
Answer: A
15. The shape of the production possibility curve is:
A) Straight line
B) Convex
C) Concave
D) Circular
Answer: C
16. Perfect substitutes have an indifference curve that is:
A) Concave
B) Convex
C) Straight line
D) Vertical
Answer: C
17. The budget line shows:
A) Income
B) Prices
C) Combinations of goods a consumer can afford
D) Total utility
Answer: C
18. Price ceiling results in:
A) Surplus
B) Inflation
C) Shortage
D) Equilibrium
Answer: C
19. Consumer surplus is:
A) Price – utility
B) Willingness to pay – actual price
C) Cost – revenue
D) Total cost
Answer: B
20. The short run is a period where:
A) All factors are variable
B) Capital is fixed
C) Labour is fixed
D) None
Answer: B
21. If marginal cost is less than average cost, average cost is:
A) Rising
B) Falling
C) Constant
D) Zero
Answer: B
22. Law of supply states:
A) Price and supply are inversely related
B) Price and supply are directly related
C) Supply is fixed
D) Supply is perfectly elastic
Answer: B
23. The slope of the supply curve is usually:
A) Negative
B) Positive
C) Horizontal
D) Vertical
Answer: B
24. Which market structure leads to allocative efficiency?
A) Monopoly
B) Oligopoly
C) Perfect competition
D) Monopolistic competition
Answer: C
25. In monopolistic competition:
A) Products are identical
B) Products are differentiated
C) Only one seller
D) No advertising
Answer: B


26–50: Macroeconomics
26. GDP stands for:
A) Gross Domestic Production
B) General Domestic Product
C) Gross Domestic Product
D) Gross Demand Product
Answer: C
27. Which of the following is NOT included in GDP?
A) Government spending
B) Net exports
C) Household work
D) Investments
Answer: C
28. Which one is a leakage from the circular flow of income?
A) Investment
B) Government spending
C) Exports
D) Savings
Answer: D
29. Fiscal policy is related to:
A) Money supply
B) Taxation and government spending
C) Exports
D) Imports
Answer: B
30. Which of the following is an instrument of monetary policy?
A) Taxation
B) Government spending
C) Open market operations
D) Subsidies
Answer: C
31. Inflation is a situation where:
A) Value of money increases
B) Prices fall
C) Prices increase continuously
D) Wages increase
Answer: C
32. Which institution in Pakistan controls monetary policy?
A) Ministry of Finance
B) National Bank of Pakistan
C) State Bank of Pakistan
D) Planning Commission
Answer: C
33. Unemployment due to change in seasons is called:
A) Cyclical
B) Structural
C) Seasonal
D) Frictional
Answer: C
34. Aggregate demand includes:
A) Consumption only
B) Government spending only
C) All demand in the economy
D) Investment only
Answer: C
35. Which of the following is a supply-side policy?
A) Reducing interest rates
B) Increasing education spending
C) Increasing taxes
D) Printing more money
Answer: B
36. Stagflation means:
A) Inflation with high growth
B) Low inflation and low unemployment
C) Inflation with stagnant growth and high unemployment
D) Deflation
Answer: C
37. Which is a lagging indicator of economic performance?
A) Stock prices
B) Employment
C) New orders
D) Business confidence
Answer: B
38. National income is a measure of:
A) Government expenditure
B) Total income of a nation
C) Imports and exports
D) Foreign investments
Answer: B
39. Phillips curve shows the relationship between:
A) Inflation and GDP
B) Inflation and unemployment
C) Money supply and interest rates
D) Consumption and income
Answer: B
40. Which is NOT part of M1 money supply?
A) Coins and currency
B) Demand deposits
C) Time deposits
D) Traveler's checks
Answer: C
41. Balance of Payments includes:
A) Imports only
B) Exports only
C) All economic transactions with other countries
D) Budget balance
Answer: C
42. Which is NOT a goal of macroeconomic policy?
A) Full employment
B) Price stability
C) Trade surplus
D) Economic growth
Answer: C
43. Depreciation of currency makes exports:
A) Costlier
B) Cheaper
C) Same
D) Impossible
Answer: B
44. Which is a measure of inflation?
A) GDP deflator
B) CPI
C) WPI
D) All of the above
Answer: D
45. A recession is defined as:
A) A rise in inflation
B) Negative economic growth for two quarters
C) Zero growth
D) Increase in national income
Answer: B
46. Interest rate is decided by:
A) Ministry of Commerce
B) State Bank
C) Planning Commission
D) Ministry of Foreign Affairs
Answer: B
47. Real GDP is adjusted for:
A) Inflation
B) Taxes
C) Imports
D) Exports
Answer: A
48. Who gave the concept of multiplier?
A) Adam Smith
B) Alfred Marshall
C) J.M. Keynes
D) David Ricardo
Answer: C
49. Which curve shows inflation and unemployment trade-off?
A) IS Curve
B) LM Curve
C) Phillips Curve
D) Laffer Curve
Answer: C
50. The biggest component of aggregate demand is:
A) Investment
B) Government spending
C) Net exports
D) Consumption
Answer: D




51–75: International Economics & Development Economics
51. The theory of comparative advantage was developed by:
A) David Ricardo
B) Adam Smith
C) John Maynard Keynes
D) Alfred Marshall
Answer: A
52. A country can achieve comparative advantage by:
A) Producing everything at the lowest cost
B) Specializing in the production of a good with the lowest opportunity cost
C) Reducing tariffs
D) Increasing imports
Answer: B
53. A tariff is a tax on:
A) Imports only
B) Exports only
C) Both imports and exports
D) Domestic goods
Answer: A
54. Which of the following is NOT a barrier to trade?
A) Quotas
B) Tariffs
C) Exchange rate fluctuations
D) Free trade agreements
Answer: D
55. The World Trade Organization (WTO) deals primarily with:
A) International monetary policy
B) World economic development
C) Global trade rules
D) Environmental protection
Answer: C
56. Which of the following is a direct benefit of international trade?
A) Higher tariffs
B) Specialization in production
C) Protectionism
D) Domestic market expansion
Answer: B
57. The balance of payments consists of:
A) Only imports and exports
B) Government spending and savings
C) All economic transactions between a country and the rest of the world
D) Only foreign investments
Answer: C
58. Which of the following is an example of a current account transaction?
A) Purchase of foreign assets
B) Foreign direct investment
C) Exports and imports of goods and services
D) Purchase of government bonds
Answer: C
59. A currency devaluation makes exports:
A) More expensive
B) Cheaper
C) Unaffected
D) Less desirable
Answer: B
60. The Bretton Woods system established:
A) Fixed exchange rates
B) Free trade agreements
C) A gold standard
D) International tariffs
Answer: A
61. Which of the following countries is a member of the European Union?
A) Norway
B) United Kingdom
C) Germany
D) Switzerland
Answer: C
62. What is the main purpose of the International Monetary Fund (IMF)?
A) To provide loans for development projects
B) To stabilize exchange rates and provide financial assistance
C) To regulate world trade
D) To provide military assistance
Answer: B
63. Which of the following is a function of the World Bank?
A) Ensuring peace and security
B) Regulating global trade
C) Providing loans for development projects
D) Supervising global financial markets
Answer: C
64. Which of the following is a feature of the developing countries?
A) High per capita income
B) Advanced technology
C) High literacy rates
D) Low industrialization
Answer: D
65. What does GDP per capita measure?
A) Total income of a country
B) Total income divided by the population
C) The wealth of the richest individuals in a country
D) The total exports of a country
Answer: B
66. Which of the following is a primary sector activity?
A) Banking
B) Agriculture
C) Construction
D) Information Technology
Answer: B
67. Which of the following measures economic development in terms of human well-being?
A) GDP
B) Gini coefficient
C) Human Development Index (HDI)
D) Inflation rate
Answer: C
68. Which of the following is NOT a factor contributing to economic growth in developing countries?
A) Foreign investment
B) Industrialization
C) Import substitution
D) High literacy rates
Answer: C
69. The "Lewis model" of development is based on the idea that: A) Capital investment is key to development
B) Labor can move from agriculture to industry, increasing productivity
C) Political stability leads to development
D) Natural resources alone drive economic growth
Answer: B
70. The term "capital flight" refers to:
A) The movement of capital to other countries for investment
B) A country's increase in savings rate
C) The outflow of skilled labor from a country
D) A country investing in foreign assets
Answer: A
71. Which of the following is an example of a "market-based" policy for economic development?
A) Government subsidies
B) Price controls
C) Import tariffs
D) Free trade agreements
Answer: D
72. Which region is most associated with the "Asian Tigers" (Hong Kong, Singapore, South Korea, and Taiwan)?
A) Middle East
B) East Asia
C) Southeast Asia
D) South Asia
Answer: B
73. The primary goal of microfinance is to:
A) Provide loans to large businesses
B) Encourage savings among the wealthy
C) Provide financial services to low-income individuals and small businesses
D) Fund major infrastructure projects
Answer: C
74. Which of the following is a structural issue faced by developing countries?
A) Lack of natural resources
B) High interest rates
C) Limited access to international markets
D) All of the above
Answer: D
75. The "poverty trap" refers to:
A) A country's inability to export goods
B) A situation where low-income countries cannot break out of poverty
C) Government policies that reduce poverty
D) High taxes that create economic inequality
Answer: B


Here is the final set of 76–100: Pakistan's Economy & Miscellaneous Economics Topics:

76–100: Pakistan's Economy & Miscellaneous Economics Topics
76. The largest sector contributing to Pakistan’s GDP is:
A) Agriculture
B) Services
C) Manufacturing
D) Construction
Answer: B
77. Which of the following is a major export of Pakistan?
A) Machinery
B) Textiles
C) Pharmaceuticals
D) Oil
Answer: B
78. The Pakistan Stock Exchange (PSX) is located in:
A) Islamabad
B) Karachi
C) Lahore
D) Peshawar
Answer: B
79. Which sector in Pakistan is most affected by frequent power outages?
A) Manufacturing
B) Services
C) Agriculture
D) Financial services
Answer: A
80. The Pakistan government's fiscal year runs from:
A) January to December
B) April to March
C) July to June
D) October to September
Answer: C
81. Which is the largest foreign direct investment source in Pakistan?
A) United States
B) China
C) Saudi Arabia
D) United Kingdom
Answer: B
82. Which of the following organizations manages Pakistan’s monetary policy?
A) Federal Bureau of Revenue
B) Ministry of Finance
C) State Bank of Pakistan
D) Securities and Exchange Commission of Pakistan
Answer: C
83. Which economic factor is most important for economic growth in Pakistan?
A) Political stability
B) Foreign aid
C) Public sector investment
D) Remittances from abroad
Answer: A
84. Which of the following is NOT a major source of revenue for Pakistan's government?
A) Sales tax
B) Customs duties
C) Income tax
D) Foreign direct investment
Answer: D
85. Which of the following is a major challenge to Pakistan’s agriculture sector?
A) Lack of skilled labor
B) Water scarcity
C) High labor costs
D) Low domestic demand
Answer: B
86. The major currency used for international trade in Pakistan is:
A) Pound Sterling
B) US Dollar
C) Euro
D) Japanese Yen
Answer: B
87. What percentage of Pakistan’s population is employed in agriculture?
A) 15%
B) 30%
C) 45%
D) 60%
Answer: C
88. Which of the following is a leading industrial product of Pakistan?
A) Electronics
B) Textiles
C) Automotive
D) Chemicals
Answer: B
89. The main objective of Pakistan's Gwadar Port project is to:
A) Increase tourism
B) Provide access to the Arabian Sea
C) Establish a military base
D) Develop shipping for oil
Answer: B
90. Pakistan's largest export partner is:
A) United States
B) China
C) United Arab Emirates
D) Afghanistan
Answer: A
91. Which of the following is a key feature of Pakistan’s economic development plans?
A) Emphasis on self-reliance
B) Focus on regional trade
C) Promoting small-scale industries
D) Expanding education in rural areas
Answer: A
92. The current population of Pakistan is estimated at:
A) 160 million
B) 220 million
C) 240 million
D) 300 million
Answer: B
93. The largest remittance-sending country to Pakistan is:
A) United States
B) Saudi Arabia
C) United Kingdom
D) United Arab Emirates
Answer: B
94. Which of the following is NOT a part of Pakistan's fiscal policy?
A) Taxation
B) Borrowing from international sources
C) Setting interest rates
D) Public expenditure
Answer: C
95. Which sector has been identified as crucial for Pakistan’s long-term growth and development?
A) Services
B) Agriculture
C) Manufacturing
D) Information Technology
Answer: D
96. Which of the following is a cause of Pakistan’s trade imbalance?
A) High import costs
B) Low export value
C) High inflation
D) All of the above
Answer: D
97. The primary source of Pakistan’s energy consumption is:
A) Renewable energy
B) Hydroelectric power
C) Coal and natural gas
D) Wind power
Answer: C
98. The primary aim of Pakistan's social safety nets is to:
A) Increase exports
B) Reduce unemployment
C) Support the underprivileged and vulnerable groups
D) Promote industrialization
Answer: C
99. Which of the following is the leading cause of income inequality in Pakistan?
A) Education
B) Urbanization
C) Gender disparity
D) Agriculture sector's dominance
Answer: C
100. Pakistan’s economic growth rate has been primarily driven by:
A) Increased foreign aid
B) Infrastructure development
C) Industrialization
D) Services sector growth
Answer: D