Economics Test For W.A.S.S.C.E & N.E.C.O Candidates (40 Questions) Trials

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Question 1: What is the primary concern of microeconomics?

A) National income measurement B) Individual consumer behavior C) Macroeconomic policy D) Exchange rate determination

Question 2: Which of the following is a determinant of price elasticity of demand?

A) Current income level B) Population growth rate C) Availability of substitutes D) Government regulations

Question 3: The law of diminishing marginal utility states that:

A) As price increases, demand decreases. B) As quantity consumed increases, total utility decreases. C) As more units of a good are consumed, the additional satisfaction decreases. D) As price decreases, demand increases.

Question 4: If the cross-price elasticity of two goods is positive, they are likely to be:

A) Complementary goods B) Normal goods C) Substitute goods D) Inferior goods

Question 5: The supply curve slopes upward because:

A) Suppliers always want to produce more. B) Producers experience diminishing marginal cost. C) The law of demand applies to producers as well. D) Higher prices lead to higher production costs.

Question 6: GDP stands for:

A) Gross Domestic Profit B) General Domestic Product C) Gross Domestic Product D) General Domestic Profit

Question 7: Inflation is best defined as:

A) A decrease in the general price level B) An increase in the purchasing power of money C) A sustained increase in the general price level D) A decrease in consumer spending

Question 8: Monetary policy involves:

A) Government spending and taxation B) Controlling the money supply and interest rates C) Regulating international trade D) Setting production quotas for firms

Question 9: Frictional unemployment occurs when:

A) Workers voluntarily leave their jobs B) Workers are laid off during a recession C) Workers are unemployed due to seasonal factors D) Workers are temporarily between jobs

Question 10: The term "fiscal deficit" refers to the excess of:

A) Total government revenue over total government expenditure B) Total government expenditure over total government revenue C) Total government revenue over total tax revenue D) Total tax revenue over total government expenditure

Question 11: Economic development refers to:

A) An increase in GDP only B) An increase in the standard of living of the population C) The growth of primary industries D) The expansion of international trade

Question 12: Which of the following is an example of a non-economic indicator of development?

A) Gross Domestic Product (GDP) per capita B) Life expectancy at birth C) Export-to-GDP ratio D) Foreign direct investment

Question 13: The Human Development Index (HDI) considers which of the following factors?

A) Only economic indicators B) Only social indicators C) Both economic and social indicators D) Political stability

Question 14: Brain drain refers to:

A) The movement of skilled workers from developed to developing countries B) The movement of unskilled workers from developing to developed countries C) The movement of labor within a country D) The emigration of retirees from a country

Question 15: Which economic sector is usually the initial focus of development in most developing countries?

A) Primary sector B) Secondary sector C) Tertiary sector D) Quaternary sector

Question 16: Comparative advantage refers to a country's ability to produce a good at:

A) The lowest opportunity cost B) The highest cost C) The same cost as other countries D) The highest market price

Question 17: A tariff is a:

A) Payment made to the World Trade Organization B) Tax imposed on imports C) Subsidy given to domestic producers D) Quota on exports

Question 18: Which of the following is a benefit of international trade?

A) Increased reliance on a single industry B) Decreased specialization and economies of scale C) Improved allocation of resources D) Reduced competition

Question 19: The balance of payments includes:

A) Only visible trade B) Only invisible trade C) Both visible and invisible trade D) Only imports and exports

Question 20: Exchange rate is the:

A) Ratio of imports to exports B) Price of one country's currency in terms of another C) Ratio of government debt to GDP D) Amount of gold held by a country's central bank

Question 21: Which of the following is an example of a fixed cost?

A) Raw materials B) Electricity bill C) Wages of temporary workers D) Advertising expenses

Question 22: A market structure with a small number of firms, differentiated products, and limited entry is known as:

A) Perfect competition B) Monopoly C) Monopolistic competition D) Oligopoly

Question 23: If the government imposes a price ceiling below the equilibrium price, what is likely to occur?

A) Surplus B) Shortage C) No change D) Balanced market

Question 24: The concept of economies of scale refers to:

A) The point at which total revenue equals total cost B) The relationship between price and quantity demanded C) The increase in average cost as production increases D) The cost advantages of large-scale production

Question 25: Which of the following is a characteristic of a public good?

A) Excludability and rivalry B) Excludability and non-rivalry C) Non-excludability and rivalry D) Non-excludability and non-rivalry

Question 26: Which of the following is considered an automatic stabilizer in an economy?

A) Fiscal policy B) Monetary policy C) Progressive income tax D) Import tariffs

Question 27: The natural rate of unemployment includes:

A) Frictional and seasonal unemployment only B) Structural and cyclical unemployment only C) Frictional, structural, and cyclical unemployment D) Seasonal and cyclical unemployment

Question 28: The demand-pull inflation occurs when:

A) Costs of production increase B) Aggregate demand exceeds aggregate supply C) Central bank reduces the money supply D) Unemployment rate rises

Question 29: The multiplier effect refers to:

A) The impact of an initial change in expenditure on overall spending B) The impact of inflation on consumer purchasing power C) The impact of taxation on government revenue D) The impact of changes in interest rates on investment

Question 30: The main goal of supply-side economics is to:

A) Control inflation through monetary policy B) Increase government spending on social programs C) Stimulate economic growth through tax cuts and deregulation D) Decrease government borrowing through fiscal discipline

Question 31: Which sector employs the largest percentage of the workforce in most developing countries?

A) Primary sector B) Secondary sector C) Tertiary sector D) Quaternary sector

Question 32: The Gini coefficient is a measure of:

A) Inflation rate B) Income inequality C) Unemployment rate D) Poverty rate

Question 33: The Millennium Development Goals (MDGs) were established by:

A) World Trade Organization (WTO) B) International Monetary Fund (IMF) C) World Bank D) United Nations (UN)

Question 34: The concept of "brain gain" refers to:

A) The movement of skilled workers from developed to developing countries B) The movement of unskilled workers from developing to developed countries C) The return of skilled workers to their home country D) The emigration of retirees from a country

Question 35: The term "informal sector" refers to:

A) Businesses that are not registered with the government B) Firms involved in export-oriented manufacturing C) Public sector enterprises D) Foreign-owned multinational corporations

Question 36: A trade deficit occurs when:

A) Exports exceed imports B) Imports exceed exports C) Exports and imports are equal D) Both exports and imports decrease

Question 37: Dumping in international trade refers to:

A) Selling a product below its production cost in foreign markets B) Exporting high-quality products to gain market share C) Implementing import quotas to protect domestic industries D) Providing subsidies to domestic producers

Question 38: A country with a comparative advantage in producing a good should:

A) Import that good B) Produce that good for domestic consumption C) Produce that good for export D) Discourage production of that good

Question 39: The "terms of trade" refer to the:

A) Ratio of imports to exports B) Price level within a country C) Exchange rate between two currencies D) Ratio of export prices to import prices

Question 40: The World Trade Organization (WTO) was established in which year?

A) 1944 B) 1951 C) 1995 D) 2000