All Free Economics MCQs with Answers

• A. the quantity of capital and labor
• B. the quality of capital and labor
• C. the quality of the labor force
• D. all of the above

Explanation: Growth depends on both the quantity and quality of capital and labour, including skills, education, technology, and productivity.

• A. the GDP
• B. the GNP
• C. the NNP
• D. the SPQR

Explanation: GDP measures production within a country's borders, regardless of whether the productive resources are domestically or foreign owned.

• A. is exclusively used by anthropologists
• B. requires the researcher to disguise his or her identity
• C. involves experimental controls
• D. may compromise the objectivity of the researcher

Explanation: Participant observation places the researcher directly within the group being studied, which can make detached judgment difficult.

• A. feudal agriculture
• B. Christianity
• C. machine-based production
• D. dialectic materialism

Explanation: Modern capitalism is closely linked with machine-based production, which enabled large-scale private production for profit and industrial…

• A. Mexico Panama Costa Rica
• B. United States Canada Puerto Rico
• C. United States Canada Mexico
• D. United States Cuba Mexico

Explanation: NAFTA was the North American trade agreement linking the United States, Canada, and Mexico.

• A. hyperinflation
• B. the Pigou effects
• C. inflation
• D. restraint of trade

Explanation: A general and continuing rise in the overall price level is called inflation, whether it results from demand pressure or rising costs.

• A. savings
• B. withdrawals
• C. unbalanced exchange
• D. exchange flow

Explanation: Withdrawals are income leakages from the circular flow because the money is saved or otherwise not returned to firms through current…

• A. incremental
• B. windfalls
• C. injections
• D. incidentals

Explanation: Injections are funds entering the circular flow from outside household consumption, such as investment, government spending and exports.

• A. demand exceeds supply
• B. supply exceed demand
• C. there is control of purchasing power
• D. consumers have no purchasing power

Explanation: When aggregate demand persistently exceeds available supply, buyers compete for limited goods and the general price level rises.

• A. Full employment
• B. High and equitably distributed income
• C. Reasonable price stability
• D. Low prime interest rate

Explanation: Full employment, fair income distribution and price stability are standard socioeconomic objectives.

• A. primary sector
• B. secondary sector
• C. tertiary sector
• D. quaternary sector

Explanation: The tertiary sector provides services such as trade, transport, banking, education and healthcare, and it employs most workers in advanced…

• A. government controlling parts of the economy for the common good
• B. revolutionary change
• C. abolition of private property
• D. totalitarian government and dictatorship of the proletariat

Explanation: Both socialism and communism assign the state a major role in directing economic resources for collective welfare.

• A. dealignment
• B. realignment
• C. alignment
• D. retrenchment

Explanation: Dealignment is a transitional weakening of established party loyalties in which voters become less attached to existing parties and the…

• A. a failure in raised expectations
• B. the oppressive role of the Communist Party
• C. the failure of the Soviet economy to provide for consumer goods
• D. all of the above

Explanation: The Soviet collapse reflected several connected failures: unmet or rising public expectations, political oppression by the Communist…

• A. the people respect the government
• B. much the government interferes in the economy
• C. profits are made
• D. easy it is become rich

Explanation: Economic systems are chiefly distinguished by the extent and method of government involvement in production, ownership, and allocation.

• A. abolition of private property
• B. military expansionism
• C. the creation of a new ruling class
• D. intense nationalism

Explanation: In Marxist theory, communism aims to eliminate private ownership of the means of production and replace it with common ownership.

• A. the ideology is static
• B. the ideology changes to suit conditions
• C. it has not led to dictatorship
• D. it promises to give more power to the masses

Explanation: Communist movements appealed to many developing countries by promising to transfer political and economic power to workers and ordinary…

• A. idealism
• B. dialectic materialism
• C. an absence of materialism
• D. a cyclical theory

Explanation: Marx interpreted historical change through dialectical materialism, which explains social development through conflicts between material…

• A. is tolerated by religious ideologies
• B. is incorporated in the ideology of democracy
• C. underlies fascism
• D. has been borrowed from the natural sciences

Explanation: Fascism accepts hierarchy, authority, and unequal social roles, rejecting the idea of fundamental political and social equality.

• A. industrial societies
• B. agricultural societies
• C. pastoral societies
• D. horticultural societies

Explanation: Industrial societies develop differentiated institutions, such as separate economic, political, educational, and religious structures.