Class 12th Economics Question Bank with Answers
Chapters: Microeconomics (Ch. 1 & 2), Macroeconomics (Ch. 1, 2 & 3)
Multiple Choice Questions (30 Questions)
1. 1. Economics is the study of:
Answer: All of the above
2. 2. The problem of 'What to produce?' is related to:
Answer: Choice of goods
3. 3. National income is calculated by:
Answer: All of the above
4. 4. Who defines money as 'anything that is widely accepted in payment for goods and
services'?
Answer: Robertson
5. 5. The central bank of India is:
Answer: Reserve Bank of India
6. 6. A shift in the demand curve occurs due to:
Answer: All of the above
7. 7. Microeconomics deals with:
Answer: Individual economic units
8. 8. The central problem of an economy is:
Answer: Scarcity
9. 9. PPC stands for:
Answer: Production Possibility Curve
10. 10. National income includes:
Answer: Final goods and services
11. 11. An increase in demand is caused by:
Answer: Increase in income
12. 12. GDP is measured using:
Answer: Production, income, and expenditure methods
13. 13. In a market economy, prices are determined by:
Answer: Demand and supply
14. 14. Money serves as:
Answer: Medium of exchange
15. 15. Inflation refers to:
Answer: General rise in prices
16. 16. The Reserve Bank of India controls:
Answer: Monetary policy
17. 17. Diminishing marginal utility explains:
Answer: Decreasing satisfaction with additional units
18. 18. Opportunity cost is:
Answer: The next best alternative foregone
19. 19. Consumer equilibrium is achieved when:
Answer: Marginal utility equals price
20. 20. Barter system faces difficulty due to:
Answer: Lack of double coincidence of wants
21. 21. The slope of a PPC shows:
Answer: Opportunity cost
22. 22. Circular flow of income shows:
Answer: Flow of goods, services, and money
23. 23. Macroeconomics studies:
Answer: Economy as a whole
24. 24. Money supply includes:
Answer: Currency and demand deposits
25. 25. The value of money is inversely related to:
Answer: Price level
26. 26. Economic growth is shown as:
Answer: Outward shift of PPC
27. 27. The law of demand states:
Answer: Price and quantity demanded are inversely related
28. 28. Factors of production include:
Answer: Land, labor, capital, and entrepreneurship
29. 29. GNP differs from GDP by:
Answer: Net factor income from abroad
30. 30. Inflation leads to:
Answer: Reduced purchasing power of money
Fill in the Blanks (3 Questions)
1. Scarcity is the root cause of all __________ problems.
Answer: economic
2. The additional satisfaction obtained from consuming one more unit of a good is called
__________.
Answer: marginal utility
3. In the circular flow of income, households provide __________ to firms.
Answer: factors of production
True or False Questions (30 Questions)
1. Microeconomics deals with the behavior of individual units.
Answer: True
2. Inflation leads to an increase in the purchasing power of money.
Answer: False
3. GDP includes the value of intermediate goods.
Answer: False
4. Demand and supply are directly related to price determination.
Answer: True
5. The Reserve Bank of India acts as a lender of last resort.
Answer: True
6. Opportunity cost is the cost of the next best alternative forgone.
Answer: True
7. National income is always equal to GDP.
Answer: False
8. Money acts as a store of value.
Answer: True
9. An increase in supply leads to a decrease in price.
Answer: True
10. Consumer surplus refers to the extra satisfaction from paying less than expected.
Answer: True
11. The barter system is efficient for large-scale economies.
Answer: False
12. The central bank prints all the money in circulation.
Answer: False
13. PPC shows the problem of choice.
Answer: True
14. Economic growth always leads to equity.
Answer: False
15. Macroeconomics studies individual decision-making.
Answer: False
16. Utility is always measurable.
Answer: False
17. A decrease in demand leads to a higher equilibrium price.
Answer: False
18. Money solves the problem of double coincidence of wants.
Answer: True
19. The law of demand is applicable only in perfect markets.
Answer: False
20. Inflation benefits borrowers.
Answer: True
21. Net exports are part of GDP calculation.
Answer: True
22. Savings are equal to investments in a two-sector model.
Answer: True
23. All goods and services are included in national income.
Answer: False
24. The central bank regulates credit in the economy.
Answer: True
25. An outward shift in the PPC represents growth.
Answer: True
26. Money is a medium of exchange only.
Answer: False
27. Expenditure method calculates GDP from the spending side.
Answer: True
28. The equilibrium price is determined where demand equals supply.
Answer: True
29. Utility maximization occurs when marginal utility equals price.
Answer: True
30. Money is a necessary condition for specialization in trade.
Answer: True
One-Word Questions (30 Questions)
1. What is the alternative name for microeconomics?
Answer: Price theory
2. Name the three methods of calculating national income.
Answer: Production, income, and expenditure methods
3. What does PPC stand for in economics?
Answer: Production Possibility Curve
4. What is the reward for capital in the factor of production?
Answer: Interest
5. Which bank controls monetary policy in India?
Answer: Reserve Bank of India
6. What is the primary function of money in an economy?
Answer: Medium of exchange
7. Name the formula for calculating Gross Domestic Product (GDP).
Answer: C + I + G + (X - M)
8. What is the next best alternative forgone called?
Answer: Opportunity cost
9. Define the additional satisfaction from one more unit.
Answer: Marginal utility
10. What is the full form of RBI?
Answer: Reserve Bank of India
11. What shows trade-offs in production?
Answer: PPC
12. Name the basic problem of economics.
Answer: Scarcity
13. What is the measure of average output per worker?
Answer: Productivity
14. Which type of goods satisfy human wants directly?
Answer: Consumer goods
15. What is the total market value of final goods called?
Answer: GDP
16. What causes a demand curve to shift?
Answer: Income
17. What is the physical form of money called?
Answer: Currency
18. Which economic branch studies aggregates?
Answer: Macroeconomics
19. What is an example of direct tax?
Answer: Income tax
20. What is the fee for using borrowed money?
Answer: Interest
21. What does CPI measure?
Answer: Inflation
22. What is the reward for entrepreneurship?
Answer: Profit
23. What is a situation of falling prices called?
Answer: Deflation
24. What is the government’s income and expenditure plan called?
Answer: Budget
25. Name a factor that causes cost-push inflation.
Answer: Rising wages
26. What is the rate at which banks borrow from the RBI?
Answer: Repo rate
27. What is the flow of goods, services, and money called?
Answer: Circular flow
28. Name one limitation of GDP.
Answer: Ignores non-market activities
29. What is a rise in general price levels called?
Answer: Inflation
30. What is the primary aim of consumers?
Answer: Utility maximization
