All Free Economics MCQs with Answers

• A. Decreasing business activity
• B. Falling prices
• C. Unemployment
• D. All of these

Explanation: A depression involves a prolonged and severe contraction in economic activity, commonly accompanied by falling prices and widespread…

• A. Nikki Index
• B. NASDAQ
• C. Dow Jones Index
• D. Major Index

Explanation: The Dow Jones Industrial Average tracks the share-price performance of 30 major US companies, traditionally associated with industrial…

• A. deflation
• B. inflation
• C. cost effective
• D. cost

Explanation: Deflation is a sustained fall in the general price level and is often associated with reduced money circulation or money supply.

• A. Gold
• B. Silver
• C. Wheat
• D. Sugar

Explanation: In the conventional trade-GK classification used by this question, Indonesia is associated with sugar exports.

• A. Jute
• B. Diamond
• C. Tin
• D. Rubber

Explanation: Malaysia has historically been identified as a leading exporter of natural rubber, although Thailand is a major current competitor.

• A. Bangladesh
• B. India
• C. Both of them
• D. None of them

Explanation: Bangladesh is a major exporter of raw jute, while India is a major exporter of jute goods and also trades in raw jute.

• A. Special Drawing Right (SDR)
• B. IMF Drawing Rights (SDR)
• C. International Drawing Right (IDR)
• D. Sure, Drawing Rights (SDR)

Explanation: Special Drawing Rights are IMF-created international reserve assets whose value is based on a basket of major currencies.

• A. New York Interbank Offered Rates (NIBOR)
• B. international Interbank Offered Rates (IOBOR)
• C. London Interbank Offered Rate (LIBOR)
• D. USA Interbank Offered Rate (UIBOR)

Explanation: LIBOR historically represented the London Interbank Offered Rate, the rate at which major banks indicated they could lend to one another.

• A. A free market is necessary for economic growth and stability
• B. Regulation is necessary for economic growth and stability
• C. Active government intervention is necessary to ensure economic growth and stability
• D. Government intervention is not necessary to ensure economic growth and stability

Explanation: Keynesian economics holds that private demand may be insufficient for stable growth and employment, so government can use fiscal and…

• A. Free float
• B. Clean float
• C. Both of them
• D. None of them

Explanation: A clean float is an exchange-rate arrangement in which the government does not intervene in the foreign-exchange market.

• A. Financial markets of developing economies
• B. Financial markets of East Europe's economies
• C. Financial markets of Asian economies
• D. Financial markets of Latin America

Explanation: Emerging markets are the financial markets of developing or rapidly industrialising economies that are becoming more integrated with…

• A. Deflector
• B. Purchasing power parity
• C. Inflator
• D. Deflation

Explanation: A price deflator converts nominal or current-price values into real, inflation-adjusted values.

• A. To write-off debt
• B. To reschedule debt
• C. To repay debt in easy installments
• D. The complete repayment of debt

Explanation: Debt retirement means extinguishing a debt, normally by repaying the principal in full or otherwise settling the obligation.

• A. International economic risk
• B. Country economic risk
• C. Ultra-country economic risk
• D. Outcome risk

Explanation: Country economic risk is the possibility that changes in a nation’s economy, such as recession, inflation, or exchange-rate instability…

• A. Free movement of capital and labor
• B. Free movement of goods and services
• C. Both of them
• D. None of them

Explanation: A common market removes restrictions on trade in goods and services and also allows the movement of production factors such as labour and…

• A. Nationalist policy
• B. Domestic policy
• C. Protectionist policy
• D. Beggar-thy-beighbour

Explanation: Beggar-thy-neighbour policy seeks to improve one country’s position at the expense of trading partners, often through competitive…

• A. Liberalism
• B. Free market economics
• C. Supply-side economics
• D. Supervised market

Explanation: Supply-side economics seeks to expand production by improving incentives to work, invest and produce, including through tax reductions.

• A. Holdings
• B. Reserves
• C. Foreign currency
• D. Treasure

Explanation: A country’s internationally acceptable payment assets, such as foreign currencies and monetary gold, are its reserves.

• A. Power to buy foreign currency
• B. Foreign currency holding
• C. Ratio at which unit of one country's currency is exchanged for unit of another country currency
• D. None of them

Explanation: The exchange rate expresses the ratio at which one nation’s currency can be exchanged for another nation’s currency.

• A. Domestication
• B. Protectionism
• C. Localization
• D. National interest

Explanation: Protectionism uses tariffs, quotas or similar restrictions to shield domestic producers from foreign competition.