Inflation is:
Correct answer B. an increase in the overall price level
Topic / 428 questions
Basic of Economics MCQs
Basic of Economics MCQs are multiple-choice questions on the foundational ideas of economics, including demand and supply, elasticity, money, banking, interest and international trade. They suit students and job-seekers who need a clear grip on everyday economic terms. Each question shows its answer instantly, so you can test yourself and learn the correct term straight away.
- Miscellaneous Economics 737
- Basic of Economics 430
- Markets, Efficiency And The Public Interest 167
- Agriculture & Irrigation System of Pakistan 126
- Market 87
- Macroeconomic Issues and Analysis 75
- Money, Interest Rates And Output 73
- Introduction To Economics 70
- Population And Development 62
- Profit Maximizing Under Perfect Competition And Monopoly 56
- Income Inequality 52
- Non-Tariff Trade Barriers 48
- Aggregate Supply, Unemployment And Inflation 45
- Natural Resources and the Environment Toward Sustainable Development 44
- Costs , Supply And Perfect Competition 44
- Human Capital 42
- Labour Market 39
- Monopoly 35
- Long Term Economic Growth 30
- Inflation & Productivity 30
- Regional Trading Arrangements 29
- Characteristics and Institutions of Developing Countries 24
- Oligopoly 23
- Consumer Theory vs. Real Consumers 20
- Applied Microeconomics 20
- Alternative Theories Of The Firm 20
- Public Goods 20
- Balance of Payments, Aid and Foreign Investment 19
- Prices, Wages & Taxes 19
- Comparative GDP 19
- Budget Deficits And The Trade Balance 18
- Macroeconomic Policy Tools 18
- Asymmetric Information 17
- Application of Economics 16
- Production Factors 16
- Monopoly & Competition 15
- Capital Formation, Investment Choice, Information Technology, And Technical Progress 15
- Monetary, Fiscal And Incomes Policy, And Inflation 15
- Average And Total Cost 14
- Poverty, Malnutrition, And Income Inequality 12
- Monetary Union 10
An account is a formal banking, brokerage or business relationship set up to provide regular services, dealings and financial transactions. Which of the following does the term account also refer to?
Correct answer D. All of these
The exchange rate is the ratio at which one country’s currency is exchanged for another’s. Which method did the World Bank develop for converting exchange rates?
Correct answer B. Atlas method of exchange rate
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What is the difference in money value between a country’s exports and imports over a given period called?
Correct answer D. Balance of trade
What is the legal proceeding called that applies when a debtor cannot pay creditors in full?
Correct answer A. Bankruptcy
What is the exchange of goods or services without the use of money called?
Correct answer C. Barter
What is a share that commands a high price because of public confidence in its long record of steady earnings called?
Correct answer D. All of these
Which term is used for an addition to normal pay given by a company or an extra gratuity paid to workers?
Correct answer C. Bonus
What is the balance of investment and return, at which they are exactly equal, called?
Correct answer C. Both of them
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What is the recurring sequence of economic activity typically marked by recession, recovery, growth and decline called?
Correct answer D. Business Cycle
What is the body of goods and money from which future income can be derived called?
Correct answer D. Capital
What does the term capital stock mean?
Correct answer C. Both of them
What is the term for producer goods, such as machinery, that are used to make other commodities?
Correct answer B. Capital goods
What does the term cartel refer to?
Correct answer D. All of the above
What is the term for an arrangement under which the buyer must pay for goods when they are delivered?
Correct answer A. Cash on Delivery
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What is a workplace called in which all workers in a section must belong to one officially recognised trade union?
Correct answer C. Closed shop
What are goods that satisfy human wants through their direct use or consumption called?
Correct answer C. Consumer goods
What is an enterprise or organisation called that is run by the people who use its facilities or services?
Correct answer B. Cooperative
What is the organisation called in which people are associated for a common purpose under a common name and which is created and recognised by law?
Correct answer D. Corporation
What does cost effective mean?
Correct answer A. Economical in terms of the goods or services received for the money spent
About Basic of Economics MCQs
This topic introduces the vocabulary that later economics chapters build on. Questions cover price elasticity of demand, compound interest, public and private sectors, and market types such as bear and bull markets. Financial terms appear often too, including debentures, liquidation and hot money, as well as trade concepts like free trade areas, where member countries remove tariffs and quotas among themselves. Some items relate economics to Pakistan, such as specialised banks for small enterprises.
Competitive exams across South Asia use these definitions-based questions to check whether candidates understand how markets, money and governments interact. A single paper can mix a question on the balance of payments with one on interest calculation, so broad familiarity matters more than depth. Regular practice here strengthens your economics, commerce and general knowledge sections, and helps you read business news and policy statements with more confidence.
Key facts to remember
- Price elasticity of demand measures how responsive quantity demanded is to a change in price.
- Compound interest is calculated on the principal plus all previously earned interest.
- A bear market is a market in which prices are falling or expected to fall.
- A debenture is a long-term debt instrument issued by a company to borrow money.
- In a free trade area, member countries remove tariffs and quotas on trade among themselves.
- The balance of payments always balances in accounting terms, because credits equal debits.
Exams that include Basic of Economics MCQs
Pakistan
- CSS
- PMS
- FPSC
- PPSC
- NTS
- Banking job tests
India
- UPSC CSE
- IBPS PO
- SBI PO
- SSC CGL
- UGC NET
Bangladesh
- BCS
- Bangladesh Bank recruitment
- Bank job exams
- Government job tests
How to prepare for Basic of Economics MCQs
- Make a glossary of financial terms such as debenture, liquidation, hot money and bear market, and revise it with these MCQs weekly.
- Practise one or two compound and simple interest calculations daily so formula questions take seconds in the exam.
- Compare similar trade blocs, such as free trade area, customs union and common market, in a small table to avoid mixing them up.
- Link each concept to a real example from Pakistani, Indian or Bangladeshi news to make definitions easier to remember.
Frequently asked questions
What topics are covered in Basic of Economics MCQs?
The topic covers demand, supply and elasticity, types of markets, money and banking terms, interest calculations, public and private sectors, and international trade arrangements. These are the definitions that most economics and commerce papers expect candidates to know before moving to advanced chapters.
How many Basic of Economics MCQs are on MCQs360?
There are 433 Basic of Economics MCQs on MCQs360, each with an instant answer. You can practise them free and without registration, which makes them useful for quick revision before banking tests or the economics section of a competitive exam.
What is the difference between simple and compound interest?
Simple interest is charged only on the original principal for each period. Compound interest is charged on the principal plus any interest already added, so the amount grows faster over time. For the same rate and period, compound interest is always equal to or greater than simple interest.
How should I prepare for Basic of Economics MCQs?
Start by learning standard definitions from an introductory textbook, then practise MCQs to see how examiners phrase them. Keep a list of terms you get wrong and revisit them. Banking candidates should give extra attention to interest, money market terms and financial instruments.
Last reviewed October 2026