SS3 first term economics past questions and answers

SS3 first term economics past questions and answers

Question: What is the primary function of central banks in managing the 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) Gross Domestic Product

b) General Demand Principle

c) Government Development Plan

d) Global Debt Protocol

Answer: a) Gross Domestic Product

Question: What is the law of demand in economics?

a) As prices increase, demand increases

b) As prices increase, demand decreases

c) Prices and demand are unrelated

d) Demand is constant regardless of prices

Answer: b) As prices increase, demand decreases

Question: Which market structure is characterized by a large number of sellers and buyers with similar products?

a) Monopoly

b) Oligopoly

c) Monopolistic competition

d) Perfect competition

Answer: d) Perfect competition

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

a) (Number of employed / Labor force) * 100

b) (Number of unemployed / Labor force) * 100

c) (Labor force / Number of employed) * 100

d) (Number of employed - Number of unemployed) / Labor force

Answer: b) (Number of unemployed / Labor force) * 100

Question: What is the opportunity cost of a decision?

a) The total cost incurred

b) The next best alternative forgone

c) The fixed cost involved

d) The variable cost incurred

Answer: b) The next best alternative forgone

Question: What does the term "elasticity" measure in economics?

a) The responsiveness of quantity demanded to a change in price

b) The total quantity demanded in the market

c) The government's control over prices

d) The level of competition in a market

Answer: a) The responsiveness of quantity demanded to a change in price

Question: In international trade, what does the term "balance of payments" refer to?

a) The difference between exports and imports

b) The government's budget surplus or deficit

c) The overall financial position of a country with the rest of the world

d) The exchange rate between two currencies

Answer: c) The overall financial position of a country with the rest of the world

Question: Which factor of production includes physical and mental efforts of humans?

a) Land

b) Labor

c) Capital

d) Entrepreneurship

Answer: b) Labor

Question: What is the Phillips curve in economics?

a) A curve representing the relationship between inflation and unemployment

b) A curve showing the relationship between supply and demand

c) A curve representing the production possibilities of an economy

d) A curve depicting the impact of taxes on consumer behavior

Answer: a) A curve representing the relationship between inflation and unemployment

Question: What is the role of the World Trade Organization (WTO) in international trade?

a) Regulating national currencies

b) Promoting cultural exchange

c) Facilitating negotiations and resolving trade disputes

d) Controlling global oil prices

Answer: c) Facilitating negotiations and resolving trade disputes

Question: In the context of taxation, what is a progressive tax system?

a) Everyone pays the same tax rate

b) The tax rate increases as income increases

c) The tax rate decreases as income increases

d) Taxation based on the number of dependents

Answer: b) The tax rate increases as income increases

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

a) Providing financial assistance to countries facing balance of payments problems

b) Promoting global environmental sustainability

c) Regulating international trade agreements

d) Controlling global interest rates

Answer: a) Providing financial assistance to countries facing balance of payments problems

Question: In the context of inflation, what does "hyperinflation" refer to?

a) A very low and stable inflation rate

b) Excessive and uncontrollable inflation

c) Inflation caused by changes in consumer preferences

d) Inflation only affecting specific industries

Answer: b) Excessive and uncontrollable inflation

Question: What is the role of the Federal Reserve in the United States?

a) Fiscal policy implementation

b) Monetary policy implementation

c) Trade policy formulation

d) Industrial policy formulation

Answer: b) Monetary policy implementation

Question: What is the concept of comparative advantage in international trade?

a) Each country should produce everything it needs

b) Countries should focus on producing goods they can produce most efficiently

c) A country should only export high-tech goods

d) Importing goods is always better than producing domestically

Answer: b) Countries should focus on producing goods they can produce most efficiently

Question: What is the difference between a fixed exchange rate and a floating exchange rate?

a) Fixed rate is determined by market forces, while floating rate is set by the government

b) Fixed rate is determined by supply and demand, while floating rate is fixed by the government

c) Fixed rate is set by the government, while floating rate is determined by market forces

d) Fixed rate and floating rate are terms for the same exchange rate system

Answer: c) Fixed rate is set by the government, while floating rate is determined by market forces

Question: What is the concept of the multiplier effect in economics?

a) The impact of a change in spending on overall economic activity

b) The impact of taxes on consumer behavior

c) The effect of interest rates on investment

d) The effect of inflation on purchasing power

Answer: a) The impact of a change in spending on overall economic activity

Question: What is the role of the Securities and Exchange Commission (SEC) in financial markets?

a) Regulating and overseeing the stock and securities industry

b) Controlling interest rates in the banking sector

c) Regulating international trade agreements

d) Facilitating currency exchange

Answer: a) Regulating and overseeing the stock and securities industry

Question: What is the concept of "crowding out" in fiscal policy?

a) Increased government spending leads to increased private investment

b) Increased government borrowing reduces private sector borrowing

c) Decreased government spending stimulates economic growth

d) Decreased government borrowing increases private sector borrowing

Answer: b) Increased government borrowing reduces private sector borrowing