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Business Economics Objective Questions AP PGCET

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Business Economics Objective Questions AP PGCET

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Business Economics Objective Questions AP PGCET (1)

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Business Economics Objective Questions - AP PGCET

1. Which of the following is a feature of a perfectly competitive market?

A) Single seller

B) Differentiated products

C) Price taker firms

D) High entry barriers

Answer: C) Price taker firms

2. The Law of Demand states that, ceteris paribus:

A) As price increases, quantity demanded increases

B) As price decreases, quantity demanded increases

C) As income increases, demand decreases

D) As income decreases, demand increases

Answer: B) As price decreases, quantity demanded increases

3. In which market structure are firms price makers?

A) Perfect competition

B) Monopolistic competition

C) Monopoly

D) Oligopoly

Answer: C) Monopoly

4. What does the term 'elasticity of demand' refer to?

A) The change in demand when income changes

B) The responsiveness of quantity demanded to a change in price

C) The difference between total revenue and total cost

D) The increase in supply due to increased prices


Answer: B) The responsiveness of quantity demanded to a change in price

5. Which of the following is NOT a characteristic of a public good?

A) Non-excludability

B) Non-rivalry

C) Divisibility

D) Provided by the government

Answer: C) Divisibility

6. Gross Domestic Product (GDP) is a measure of:

A) The total value of goods and services produced by a country's citizens

B) The total value of goods and services consumed in a country

C) The total value of goods and services produced within a country

D) The total value of foreign investments in a country

Answer: C) The total value of goods and services produced within a country

7. Which of the following is an example of fiscal policy?

A) Increasing the interest rate

B) Reducing the money supply

C) Cutting taxes

D) Increasing the reserve requirements

Answer: C) Cutting taxes

8. The Phillips Curve shows the relationship between:

A) Inflation and unemployment

B) Interest rates and investment

C) Supply and demand

D) Government spending and GDP


Answer: A) Inflation and unemployment

9. Which of the following is NOT a function of money?

A) Medium of exchange

B) Store of value

C) Unit of account

D) Measure of production

Answer: D) Measure of production

10. Monetary policy is primarily concerned with:

A) Taxation and government spending

B) Regulating the money supply and interest rates

C) Controlling imports and exports

D) Setting wages and prices

Answer: B) Regulating the money supply and interest rates

11. The balance of payments includes which of the following?

A) Trade balance and budget balance

B) Trade balance and capital flows

C) Budget balance and foreign reserves

D) Capital flows and government spending

Answer: B) Trade balance and capital flows

12. Which of the following is a benefit of international trade?

A) Increase in domestic monopolies

B) Access to a wider variety of goods and services

C) Reduction in foreign competition

D) Decrease in domestic production


Answer: B) Access to a wider variety of goods and services

13. Exchange rates are determined by:

A) Government policies alone

B) The relative demand and supply of currencies

C) Trade unions

D) International agreements

Answer: B) The relative demand and supply of currencies

14. Which of the following is a common trade barrier?

A) Exchange rates

B) Tariffs

C) Trade agreements

D) Comparative advantage

Answer: B) Tariffs

15. Comparative advantage refers to:

A) The ability to produce more of a good with the same resources

B) The ability to produce a good at a lower opportunity cost than another producer

C) The ability to produce a good with fewer inputs

D) The ability to sell a good at a higher price than competitors

Answer: B) The ability to produce a good at a lower opportunity cost than another producer

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