15 MCQ on Structure and growth of economy with answers
15 MCQ on Structure and growth of economy with answers
1. Which of the following sectors typically contributes the most to the GDP of a developed economy?
A) Agriculture
B) Manufacturing
C) Services
D) Mining
Answer: C) Services
2. Gross Domestic Product (GDP) measures:
A) The total value of all goods and services produced within a country's borders in a given period.
B) The total value of a country's exports minus its imports.
C) The total income earned by citizens of a country.
D) The total amount of money circulating within an economy.
Answer: A) The total value of all goods and services produced within a country's borders in a given period.
3. Which of the following is NOT a factor of production?
A) Labor
B) Land
C) Money
D) Capital
Answer: C) Money
4. Human capital refers to:
A) Money invested in stocks and bonds.
B) Physical infrastructure such as roads and bridges.
C) The skills, knowledge, and experience possessed by the workforce.
D) Land and natural resources.
Answer: C) The skills, knowledge, and experience possessed by the workforce.
5. Economic growth is measured by:
A) The rate of inflation.
B) Changes in the unemployment rate.
C) Increases in real GDP over time.
D) The size of the government budget deficit.
Answer: C) Increases in real GDP over time.
6. Which of the following is an example of capital deepening?
A) A decrease in the number of hours worked per week.
B) An increase in the quality of education and training for workers.
C) A decrease in the interest rates set by the central bank.
D) An increase in government spending on social welfare programs.
Answer: B) An increase in the quality of education and training for workers.
7. The term "economic structure" refers to:
A) The physical infrastructure of a country.
B) The organization of industries and sectors within an economy.
C) The political system governing a country.
D) The balance of trade between exports and imports.
Answer: B) The organization of industries and sectors within an economy.
8. Which sector is typically the largest employer in developing economies?
A) Agriculture
B) Manufacturing
C) Services
D) Mining
Answer: A) Agriculture
9. What is the primary characteristic of a command economy?
A) Private ownership of the means of production.
B) Centralized government control over economic activities.
C) Market forces determining prices and production.
D) Absence of government intervention in the economy.
Answer: B) Centralized government control over economic activities.
10. Which of the following best describes a mixed economy?
A) An economy where all resources are privately owned and allocated through the market.
B) An economy where the government owns all resources and controls production.
C) An economy where both private and public sectors play significant roles.
D) An economy where resources are allocated based on traditional customs and beliefs.
Answer: C) An economy where both private and public sectors play significant roles.
11. Economic development refers to:
A) The rate at which a country's population is increasing.
B) The process of improving the standard of living and well-being of a population.
C) The amount of natural resources available within a country's borders.
D) The level of government debt relative to GDP.
Answer: B) The process of improving the standard of living and well-being of a population.
12. Which of the following is a characteristic of a developed economy?
A) High levels of unemployment
B) Limited access to healthcare and education
C) Diversified industrial base and high per capita income
D) Heavy reliance on subsistence agriculture
Answer: C) Diversified industrial base and high per capita income
13. What is the purpose of economic indicators such as the Consumer Price Index (CPI) and the unemployment rate?
A) To measure the level of economic inequality within a society.
B) To assess the overall health and performance of an economy.
C) To determine the amount of government spending required for social programs.
D) To predict future trends in the stock market.
Answer: B) To assess the overall health and performance of an economy.
14. Which of the following best describes the term "economic diversification"?
A) The process of shifting resources from the private sector to the public sector.
B) The practice of specializing in a narrow range of economic activities.
C) The strategy of expanding and developing new industries to reduce reliance on a single sector.
D) The redistribution of income and wealth within a society.
Answer: C) The strategy of expanding and developing new industries to reduce reliance on a single sector.
15. Which theory suggests that economic growth will eventually slow down as a country reaches its technological and resource limits?
A) Neoclassical growth theory
B) Endogenous growth theory
C) Malthusian theory
D) Solow growth model
Answer: C) Malthusian theory
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