SS2 first term economics past questions and answers

SS2 first term economics past questions and answers

here are 20 SS2 Economics questions with options and answers:

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

a) Barter trade

b) Medium of exchange

c) Economic planning

d) Social interaction

Answer: b) Medium of exchange

Question: Inflation is best defined as:

a) Decrease in the general price level

b) Increase in the supply of money

c) Increase in the general price level

d) Decrease in the supply of money

Answer: c) Increase in the general price level

Question: Which of the following is a direct tax?

a) Value Added Tax (VAT)

b) Income Tax

c) Excise Duty

d) Customs Duty

Answer: b) Income Tax

Question: The law of demand states that:

a) Quantity demanded increases as price increases

b) Quantity demanded decreases as price increases

c) Quantity supplied increases as price decreases

d) Quantity supplied decreases as price decreases

Answer: b) Quantity demanded decreases as price increases

Question: What is the opportunity cost of a decision?

a) The financial cost

b) The cost of the next best alternative forgone

c) The total cost

d) The fixed cost

Answer: b) The cost of the next best alternative forgone

Question: Which market structure is characterized by a large number of sellers selling similar but not identical products?

a) Monopoly

b) Oligopoly

c) Perfect competition

d) Monopolistic competition

Answer: d) Monopolistic competition

Question: GDP (Gross Domestic Product) is the total value of:

a) Only goods produced in a country

b) Only services produced in a country

c) Both goods and services produced in a country

d) Only exports produced in a country

Answer: c) Both goods and services produced in a country

Question: Which of the following is a fiscal policy tool used to control inflation?

a) Decreasing government spending

b) Increasing taxes

c) Increasing government spending

d) Reducing interest rates

Answer: b) Increasing taxes

Question: What does the term "Laissez-faire" mean in economics?

a) Government intervention in the economy

b) Free-market capitalism

c) Planned economy

d) Command economy

Answer: b) Free-market capitalism

Question: The production possibility curve represents:

a) The maximum combination of goods a country can produce

b) The minimum combination of goods a country can produce

c) The average production of goods in a country

d) The fixed production capacity of a country

Answer: a) The maximum combination of goods a country can produce

Question: Which of the following is a function of the Central Bank?

a) Fiscal policy implementation

b) Monetary policy formulation

c) Tax collection

d) Budget preparation

Answer: b) Monetary policy formulation

Question: What is the term for a situation where the government's total expenditures exceed the revenue that it generates?

a) Budget deficit

b) Budget surplus

c) Fiscal equilibrium

d) Tax deficit

Answer: a) Budget deficit

Question: The law of diminishing marginal utility states that:

a) The more you consume, the happier you become

b) The less you consume, the happier you become

c) The additional satisfaction from consuming one more unit decreases

d) The additional satisfaction from consuming one more unit increases

Answer: c) The additional satisfaction from consuming one more unit decreases

Question: Which market structure has only one seller with no close substitutes?

a) Oligopoly

b) Monopolistic competition

c) Perfect competition

d) Monopoly

Answer: d) Monopoly

Question: What is the main function of the World Bank?

a) Providing financial assistance for development projects

b) Regulating international trade

c) Enforcing global economic policies

d) Controlling inflation

Answer: a) Providing financial assistance for development projects

Question: What is the formula for calculating GDP?

a) GDP = Consumption + Investment + Government Spending

b) GDP = Consumption - Investment - Government Spending

c) GDP = Consumption × Investment × Government Spending

d) GDP = Consumption ÷ Investment ÷ Government Spending

Answer: a) GDP = Consumption + Investment + Government Spending

Question: What is the purpose of a trade barrier?

a) To encourage international trade

b) To restrict the flow of goods and services between countries

c) To stabilize currency exchange rates

d) To promote fair competition

Answer: b) To restrict the flow of goods and services between countries

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

a) High unemployment rate

b) Low standard of living

c) High per capita income

d) Limited access to education

Answer: c) High per capita income

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

a) Providing long-term loans for development projects

b) Promoting international monetary cooperation and exchange rate stability

c) Funding social welfare programs in member countries

d) Regulating global commodity prices

Answer: b) Promoting international monetary cooperation and exchange rate stability

Question: What is the significance of the elasticity of demand?

a) It measures the responsiveness of quantity demanded to a change in price

b) It indicates the total demand in the market

c) It represents the total revenue of a firm

d) It measures the percentage change in quantity demanded

Answer: a) It measures the responsiveness of quantity demanded to a change in price