All Free Economics MCQs with Answers

• A. Gross Domestic Product (GOP)
• B. Gross National output (GNO)
• C. Gross National product (GNP)
• D. Gross National Output

Explanation: Gross National Product measures the value of final goods and services produced by a nation’s factors of production during a period…

• A. Open trade
• B. Free trade
• C. Open sky trade
• D. Easy trade

Explanation: Free trade means international trade without artificial barriers such as tariffs, quotas, or foreign-exchange controls.

• A. Embargo
• B. Contraband
• C. Ban
• D. Restriction

Explanation: An embargo is a government order prohibiting or severely restricting trade in specified goods, or trade with a particular country.

• A. Devolution
• B. Devaluation
• C. Price cap
• D. Cut-rate

Explanation: Devaluation is an official reduction in the value of a country's currency against foreign currencies, usually under a fixed or managed…

• A. Malaysia
• B. China
• C. Russia
• D. USA

Explanation: Malaysia has historically been recognized as a major, and in many standard general-knowledge sources the leading, exporter of tin.

• A. Tin
• B. Silver
• C. Aluminum
• D. Gold

Explanation: Mexico is the world’s leading silver producer and a major exporter, making silver the intended mineral.

• A. Mexico
• B. USA
• C. Brazil
• D. Australia

Explanation: Brazil is the world’s leading coffee exporter, especially because of its very large Arabica and Robusta production.

• A. Value of all economic activity within nation's border
• B. Economic output of a country
• C. Economic activity of federal government
• D. None of these

Explanation: GDP measures the market value of final goods and services produced within a country’s borders during a period.

• A. End benefit
• B. Trickle down
• C. Free market
• D. Capitalism

Explanation: Trickle-down theory claims that supporting businesses and higher-income investors will increase investment and activity, eventually…

• A. A bond with a longer time to maturity
• B. A certificate of deposit whose principal is payable at maturity
• C. A certificate of deposit with a shorter time to maturity
• D. certificate of deposit with a longer time to maturity

Explanation: A term certificate is a certificate of deposit held for a fixed period, with its principal repaid when it matures.

• A. Local currency
• B. Cold currency
• C. Lime currency
• D. Soft currency

Explanation: A soft currency is expected to lose value against other currencies, often because of weak economic conditions or limited demand.

• A. Reserve currency
• B. Hot currency
• C. Pegged currency
• D. Hard currency

Explanation: Foreign currency held by a central bank for intervention and international settlements is called reserve currency.

• A. Infrastructure
• B. Basic structure
• C. Fundamentals
• D. Basic infrastructure

Explanation: Infrastructure is the basic physical framework that supports an economy, including transport, communication, energy and related…

• A. Fixed Direct Investment
• B. Foreign Direct Investment (FDI)
• C. Foreign Investment
• D. Remote Foreign Investment

Explanation: Foreign direct investment occurs when an investor acquires assets in another country and retains managerial or operating control through…

• A. Pegged exchange rate
• B. Floating exchange rate
• C. Liberal exchanged rate
• D. Open exchange rate

Explanation: Under a floating exchange rate, the currency’s value is determined mainly by market demand and supply rather than being fixed by the…

• A. Exchange Rate Mechanism (ERM)
• B. Exchange Rate Equilibrium
• C. Exchange Rate Balance
• D. None of the above

Explanation: The Exchange Rate Mechanism, or ERM, was the system through which European Monetary System members kept their currencies within agreed…

• A. Duty
• B. Custom
• C. Rebut
• D. Drawback

Explanation: A drawback is a refund or rebate of customs duty paid on imported goods when those goods are later exported, often after processing.

• A. Demand curve theory
• B. Cost-push inflation
• C. Demand-pull inflation
• D. Demand push inflation

Explanation: Demand-pull inflation occurs when aggregate demand exceeds the economy's ability to produce goods and services, pushing prices upward.

• A. Debt blast
• B. Debt bomb
• C. Bad debt
• D. None of them

Explanation: A debt bomb is a large debt-related failure or default capable of spreading financial instability through the wider economy.

• A. National economic risk
• B. Country economic risk
• C. Country finance risk
• D. Foreign exchange riskEconomics

Explanation: Country financial risk concerns whether a national economy can generate enough foreign exchange and income to meet interest and principal…