“Preparing for the OSSSC Accountant and DEO exams requires a comprehensive understanding of economic concepts. Among the crucial study materials, the ‘Top 30 Economy MCQs’ stands out as an invaluable resource. These MCQs cover a diverse range of economic topics, providing candidates with a holistic approach to mastering the subject. From macroeconomic principles to microeconomic theories, these questions delve into the intricacies of economic systems, policies, and trends. Aspirants can expect to encounter questions related to GDP calculation methods, inflation indices, fiscal and monetary policies, international trade, and economic development indicators.
Top 30 Economy MCQs for OSSSC Accountant, DEO
Additionally, the MCQs are designed to test not only factual knowledge but also analytical skills, requiring candidates to apply economic principles to real-world scenarios. With thorough practice of these ‘Top 30 Economy MCQs,’ candidates can enhance their proficiency in economics, thereby boosting their chances of success in the OSSSC Accountant and DEO examinations.”
- An autonomous increase in expenditure is likely to result in an increase in a country’s real GNP when:
[A] The country’s trade balance is negative
[B] The country’s economy is operating at full employment
[C] The government implements contractionary fiscal policies
[D] The economy is working under conditions of less than full employmentCorrect Answer: D [The economy is working under conditions of less than full employment]
Explanation: An autonomous increase in expenditure tends to boost aggregate demand, leading to increased production and income levels. This effect is most pronounced when the economy operates below full employment, as there is spare capacity in the economy to accommodate the increased demand without causing inflationary pressures.
- If a country’s economy is experiencing full employment, an autonomous increase in expenditure would likely result in:
[A] Decrease in inflation rates
[B] Increase in real GNP
[C] Decrease in aggregate demand
[D] Increase in government budget surplusCorrect Answer: C [Decrease in aggregate demand]
Explanation: In a fully employed economy, any increase in expenditure may lead to excessive demand, causing inflationary pressures. Hence, an autonomous increase in expenditure could prompt authorities to implement contractionary measures to reduce aggregate demand and control inflation.
- When analyzing the impact of autonomous expenditure, which of the following factors is crucial for determining its effect on real GNP?
[A] Current account deficit
[B] Level of government debt
[C] Unemployment rate
[D] Currency exchange ratesCorrect Answer: C [Unemployment rate]
Explanation: The level of unemployment provides insights into the economy’s utilization of resources. In conditions of less than full employment, an autonomous increase in expenditure can stimulate economic activity and lead to an increase in real GNP. Conversely, in a fully employed economy, additional expenditure may lead to inflationary pressures without significant increases in real output. Therefore, the unemployment rate is a critical determinant of the effectiveness of autonomous expenditure in influencing real GNP.
- What does the acronym SNA-SPARSH stand for in the context of Odisha’s recent initiative?
[A] State Networking for Advanced-Services Platform
[B] State-Integrated System for Public Funds Reallocation and Handling
[C] State Neutralizing Allocation for Seamless Public Fund Distribution
[D] State Networking Automated System for Seamless Public Resource HandlingCorrect Answer: B [State-Integrated System for Public Funds Reallocation and Handling]
Explanation: SNA-SPARSH stands for State-Integrated System for Public Funds Reallocation and Handling, which is the fund flow mechanism aimed at facilitating real-time transfers by integrating various financial management systems.
- What is the objective of Odisha piloting the SNA-SPARSH initiative?
[A] To enhance agricultural productivity in the state
[B] To streamline the distribution of welfare schemes
[C] To improve healthcare facilities for rural communities
[D] To ensure real-time quick transfers through integrated fund management systemsCorrect Answer: D [To ensure real-time quick transfers through integrated fund management systems]
Explanation: The primary objective of Odisha piloting the SNA-SPARSH initiative is to ensure real-time quick transfers by integrating the Centre’s public fund management system, the state’s integrated fund management system, and RBI’s e-Kuber platform.
- In economics, what term describes a situation where economic activity is slowing down, yet wages and prices continue to rise?
[A] Inflation
[B] Deflation
[C] Skweflation
[D] StagflationCorrect Answer: D [Stagflation]
Explanation: Stagflation refers to a condition characterized by persistent high inflation, high unemployment, and stagnant economic growth. It is a combination of inflation and economic stagnation.
- Which branch of economics deals with the performance, structure, and behavior of the economy of an entire community, such as a nation, region, or the world?
[A] Heterodox approaches
[B] Microeconomics
[C] Macroeconomics
[D] All of the aboveCorrect Answer: C [Macroeconomics]
Explanation: Macroeconomics is the branch of economics that focuses on the overall performance, structure, and behavior of an economy at the national, regional, or global level.
- What term describes a situation where the demand for goods and services exceeds the available supply, leading to a sustained increase in prices?
[A] Recession
[B] Inflation
[C] Deflation
[D] StagnationCorrect Answer: B [Inflation]
Explanation: Inflation is the term used to describe a general increase in prices of goods and services in an economy over a period of time, resulting in a decrease in the purchasing power of money.
- Which of the following is considered a leading economic indicator?
[A] Gross Domestic Product (GDP)
[B] Consumer Price Index (CPI)
[C] Unemployment rate
[D] Stock market performanceCorrect Answer: D [Stock market performance]
Explanation: Stock market performance is often considered a leading economic indicator because it reflects investors’ expectations about future economic conditions.
- What term describes the total value of all goods and services produced within a country’s borders in a specific period, usually a year?
[A] Gross National Product (GNP)
[B] Gross Domestic Product (GDP)
[C] Net National Product (NNP)
[D] National IncomeCorrect Answer: B [Gross Domestic Product (GDP)]
Explanation: GDP (Gross Domestic Product) measures the total value of all goods and services produced within a country’s borders in a specific period, typically a year.
- What economic term refers to a situation where there is a sustained decrease in the general price level of goods and services in an economy?
[A] Inflation
[B] Deflation
[C] Stagflation
[D] RecessionCorrect Answer: B [Deflation]
Explanation: Deflation is the term used to describe a persistent decrease in the general price level of goods and services in an economy, leading to an increase in the purchasing power of money.
- Who is responsible for estimating the national income of India?
[A] Office of the Economic Advisor
[B] Ministry of Statistics
[C] Central Statistical Office
[D] Ministry of FinanceCorrect Answer: C [Central Statistical Office]
Explanation: The Central Statistical Office (CSO) is the body responsible for estimating the national income of India. It operates under the Ministry of Statistics and Programme Implementation and is tasked with various statistical functions, including estimating National Income, Index of Industrial Production, and Consumer Price Indices.
- Which governmental agency in India is primarily responsible for compiling and publishing economic statistics?
[A] Reserve Bank of India (RBI)
[B] Planning Commission
[C] Central Statistical Office (CSO)
[D] Securities and Exchange Board of India (SEBI)Correct Answer: C [Central Statistical Office (CSO)]
Explanation: The Central Statistical Office (CSO) is the primary governmental agency in India responsible for compiling and publishing economic statistics, including estimates of national income, industrial production, and consumer price indices.
- Who oversees the estimation of Gross Domestic Product (GDP) and other economic indicators in India?
[A] Ministry of Finance
[B] Office of the Economic Advisor
[C] Ministry of Statistics and Programme Implementation
[D] Planning CommissionCorrect Answer: C [Ministry of Statistics and Programme Implementation]
Explanation: The Ministry of Statistics and Programme Implementation oversees the estimation of Gross Domestic Product (GDP) and other economic indicators in India. It includes the Central Statistical Office (CSO), which is responsible for estimating national income and other key economic statistics.
- If a commodity has more substitutes available, the demand for this commodity will be:
[A] more elastic
[B] less elastic
[C] inelastic
[D] perfectly elasticCorrect Answer: A [more elastic]
Explanation: When a commodity has more substitutes available, consumers can easily switch to alternatives if the price of the commodity changes. This makes the demand for the commodity more responsive to price changes, resulting in a more elastic demand.
- Which of the following does not come under Land Resources?
[A] Fertility of Land
[B] Location of Land
[C] Composition of Land
[D] All of the above are land resourcesCorrect Answer: D [All of the above are land resources]
Explanation: All the options – Fertility of Land, Location of Land, and Composition of Land – are aspects of land resources. They contribute to the overall value and utility of land for various purposes.
- In economics, the term “utility” refers to:
[A] The amount of money individuals are willing to pay for a good or service
[B] The satisfaction or benefit derived from consuming a good or service
[C] The total revenue generated by selling a good or service
[D] The total cost incurred in producing a good or serviceCorrect Answer: B [The satisfaction or benefit derived from consuming a good or service]
Explanation: Utility is a measure of the satisfaction or benefit that individuals derive from consuming a good or service. It represents the subjective value that consumers place on goods and services based on their preferences and needs.
- Which of the following is not a factor of production according to classical economics?
[A] Labor
[B] Capital
[C] Entrepreneurship
[D] MoneyCorrect Answer: D [Money]
Explanation: In classical economics, the factors of production are land, labor, and capital. While money plays a crucial role in facilitating transactions, it is not considered a factor of production in the classical sense.
- When a country experiences an increase in the value of its currency relative to other currencies, it is known as:
[A] Appreciation
[B] Depreciation
[C] Inflation
[D] DeflationCorrect Answer: A [Appreciation]
Explanation: Appreciation refers to an increase in the value of a country’s currency relative to other currencies, leading to a stronger exchange rate.
- What does the term “opportunity cost” refer to in economics?
[A] The total cost of producing a good or service
[B] The cost of goods and services in terms of money
[C] The value of the next best alternative forgone when a decision is made
[D] The total revenue generated from selling a good or serviceCorrect Answer: C [The value of the next best alternative forgone when a decision is made]
Explanation: Opportunity cost is the value of the next best alternative that must be forgone when a decision is made to allocate resources to a particular use. It represents the benefits that could have been gained from choosing an alternative course of action.
- A monopolist will be able to maximize his profits at the time of ?
[A] His output is maximum
[B] He charges a Higher price
[C] His average cost is minimum
[D] His marginal cost is equal to the marginal revenueCorrect Answer: D [His marginal cost is equal to the marginal revenue]
Explanation: A monopolist maximizes profits where marginal cost (MC) equals marginal revenue (MR). This is because at this point, the firm is producing an optimal level of output where the additional cost of producing one more unit (MC) is equal to the additional revenue gained from selling that unit (MR).
- Which of the following items is characterized by the highest income elasticity of demand among others?
[A] Car
[B] Milk
[C] Paddy
[D] TobaccoCorrect Answer: A [Car]
Explanation: Income elasticity of demand measures the responsiveness of quantity demanded to changes in income. Luxury items like cars typically have a higher income elasticity of demand, meaning that as income rises, the demand for cars increases proportionally more than the increase in income.
- What term describes the situation where the quantity demanded for a good or service increases as its price falls?
[A] Elasticity
[B] Inelasticity
[C] Law of Demand
[D] Law of SupplyCorrect Answer: C [Law of Demand]
Explanation: The Law of Demand states that there is an inverse relationship between the price of a good or service and the quantity demanded, assuming other factors remain constant. When the price falls, the quantity demanded increases, and vice versa.
- Which of the following is a measure of the responsiveness of quantity demanded to changes in price?
[A] Cross-price elasticity
[B] Income elasticity of demand
[C] Price elasticity of demand
[D] Price elasticity of supplyCorrect Answer: C [Price elasticity of demand]
Explanation: Price elasticity of demand measures how much the quantity demanded of a good or service changes in response to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
- When a firm operates at the minimum point of its average total cost curve, it is:
[A] Maximizing profits
[B] Operating at a loss
[C] Achieving economies of scale
[D] Experiencing diseconomies of scaleCorrect Answer: C [Achieving economies of scale]
Explanation: When a firm operates at the minimum point of its average total cost curve, it is achieving economies of scale. This means that the firm is producing at the most efficient scale, where average total cost is minimized, resulting in lower per-unit costs of production.
- A Goldilocks economy is represented by:
[A] Low Inflation, High Economic Growth
[B] High Inflation, Low Economic Growth
[C] Low Inflation, Steady economic growth
[D] High Inflation, High Economic GrowthCorrect Answer: C [Low Inflation, Steady economic growth]
Explanation: A Goldilocks economy is characterized by low inflation and steady economic growth, often considered as an ideal balance between growth and stability.
- Which of the following ministries is responsible for calculating GDP in India?
[A] Ministry of Finance
[B] Ministry of Commerce and Industry
[C] Ministry of Central Statistical and Program Implementation
[D] Ministry of Consumer AffairsCorrect Answer: C [Ministry of Central Statistical and Program Implementation]
Explanation: The Ministry of Central Statistical and Program Implementation, through its agency, the Central Statistical Organization (CSO), is responsible for calculating GDP in India. It gathers macroeconomic data and conducts statistical analysis.
- What term describes the total market value of all final goods and services produced within a country in a specific period, usually a year?
[A] Gross National Product (GNP)
[B] Gross Domestic Product (GDP)
[C] Net National Product (NNP)
[D] National IncomeCorrect Answer: B [Gross Domestic Product (GDP)]
Explanation: GDP measures the total market value of all final goods and services produced within a country’s borders in a specific period, typically a year.
- Which of the following is a measure of the total income earned by a country’s residents, regardless of where the assets are located?
[A] Gross Domestic Product (GDP)
[B] Gross National Product (GNP)
[C] Net National Product (NNP)
[D] National IncomeCorrect Answer: B [Gross National Product (GNP)]
Explanation: GNP measures the total income earned by a country’s residents, regardless of where the assets are located. It includes income earned domestically and abroad by residents of a country.
- What term describes the percentage change in quantity demanded of a good or service in response to a 1% change in price?
[A] Income elasticity of demand
[B] Cross-price elasticity of demand
[C] Price elasticity of demand
[D] Price elasticity of supplyCorrect Answer: C [Price elasticity of demand]
Explanation: Price elasticity of demand measures the responsiveness of quantity demanded to changes in price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.
