BA in Economics
--------------------------
1. What is the basic economic problem?
a. Scarcity
b. Surplus
c. Unemployment
d. Inflation
Answer: a. Scarcity
2. Which of the following is a factor of production?
a. Land
b. Money
c. Savings
d. Consumer goods
Answer: a. Land
3. Which of the following is an example of a capital good?
a. A laptop used by a student
b. A pool used for recreational purposes
c. A factory used to produce cars
d. A sandwich purchased at a fast food restaurant
Answer: c. A factory used to produce cars
4. Which of the following is an example of a positive economic statement?
a. The minimum wage should be increased to $15 per hour.
b. The government should provide free healthcare to all citizens.
c. Increased government spending will improve economic growth.
d. A decrease in interest rates will lead to an increase in consumer spending.
Answer: d. A decrease in interest rates will lead to an increase in consumer spending.
5. Which of the following is a characteristic of a market economy?
a. Central planning by the government
b. Private ownership of resources
c. Redistribution of wealth by the government
d. Price controls set by the government
Answer: b. Private ownership of resources
6. Which of the following is a characteristic of a command economy?
a. Private ownership of resources
b. Competition among firms
c. Decisions made by buyers and sellers
d. Central planning by the government
Answer: d. Central planning by the government
7. Which of the following is a measure of the price level?
a. GDP
b. Inflation rate
c. Unemployment rate
d. Interest rate
Answer: b. Inflation rate
8. Which of the following is a measure of economic growth?
a. GDP
b. Inflation rate
c. Unemployment rate
d. Interest rate
Answer: a. GDP
9. Which of the following is a tool used by the Federal Reserve to influence the economy?
a. Fiscal policy
b. Monetary policy
c. Central planning
d. Redistribution of wealth
Answer: b. Monetary policy
10. Which of the following is an example of a government transfer payment?
a. Social Security benefits
b. Corporate profits
c. Interest on a loan
d. Dividend payments
Answer: a. Social Security benefits
11. Which of the following is an example of a positive externality?
a. Pollution from a factory
b. Loud music from a party
c. Planting trees in a neighborhood
d. Construction of a new highway
Answer: c. Planting trees in a neighborhood
12. Which of the following is an example of a negative externality?
a. Investing in education
b. Donating to charity
c. Smoking in a public place
d. Building a hospital
Answer: c. Smoking in a public place
13. Which of the following is a market structure characterized by a large number of firms selling similar
products?
a. Monopoly
b. Oligopoly
c. Monopolistic competition
d. Perfect competition
Answer: d. Perfect competition
14. Which of the following is a market structure characterized by a single firm selling a unique product
with no close substitutes?
a. Monopoly
b. Oligopoly
c. Monopolistic competition
d. Perfect competition
Answer: a. Monopoly
15. Which of the following is a measure of how responsive consumers are to a change in price?
a. Price ceiling
b. Price floor
c. Price elasticity of demand
d. Price elasticity of supply
Answer: c. Price elasticity of demand
16. Which of the following is a measure of how responsive suppliers are to a change in price?
a. Price ceiling
b. Price floor
c. Price elasticity of demand
d. Price elasticity of supply
Answer: d. Price elasticity of supply
17. Which of the following is an example of a public good?
a. A private jet
b. A public park
c. A luxury car
d. A designer handbag
Answer: b. A public park
18. Which of the following is a characteristic of a public good?
a. Excludability
b. Rivalry
c. Non-excludability
d. Non-rivalry
Answer: c. Non-excludability
19. Which of the following is an example of a merit good?
a. Alcohol
b. Education
c. Cigarettes
d. Gambling
Answer: b. Education
Ethiopian University ExitExam Preparation business&economics fields:
BA in Economics
--------------------------
1. What is the basic economic problem?
a. Scarcity
b. Surplus
c. Unemployment
d. Inflation
Answer: a. Scarcity
2. Which of the following is a factor of production?
a. Land
b. Money
c. Savings
d. Consumer goods
Answer: a. Land
3. Which of the following is an example of a capital good?
a. A laptop used by a student
b. A pool used for recreational purposes
c. A factory used to produce cars
d. A sandwich purchased at a fast food restaurant
Answer: c. A factory used to produce cars
4. Which of the following is an example of a positive economic statement?
a. The minimum wage should be increased to $15 per hour.
b. The government should provide free healthcare to all citizens.
c. Increased government spending will improve economic growth.
d. A decrease in interest rates will lead to an increase in consumer spending.
Answer: d. A decrease in interest rates will lead to an increase in consumer spending.
5. Which of the following is a characteristic of a market economy?
a. Central planning by the government
b. Private ownership of resources
c. Redistribution of wealth by the government
d. Price controls set by the government
Answer: b. Private ownership of resources
6. Which of the following is a characteristic of a command economy?
a. Private ownership of resources
b. Competition among firms
c. Decisions made by buyers and sellers
d. Central planning by the government
Answer: d. Central planning by the government
7. Which of the following is a measure of the price level?
a. GDP
b. Inflation rate
c. Unemployment rate
d. Interest rate
Answer: b. Inflation rate
8. Which of the following is a measure of economic growth?
a. GDP
b. Inflation rate
c. Unemployment rate
d. Interest rate
Answer: a. GDP
9. Which of the following is a tool used by the Federal Reserve to influence the economy?
a. Fiscal policy
b. Monetary policy
c. Central planning
d. Redistribution of wealth
Answer: b. Monetary policy
10. Which of the following is an example of a government transfer payment?
a. Social Security benefits
b. Corporate profits
c. Interest on a loan
d. Dividend payments
Answer: a. Social Security benefits
11. Which of the following is an example of a positive externality?
a. Pollution from a factory
b. Loud music from a party
c. Planting trees in a neighborhood
d. Construction of a new highway
Answer: c. Planting trees in a neighborhood
12. Which of the following is an example of a negative externality?
a. Investing in education
b. Donating to charity
c. Smoking in a public place
d. Building a hospital
Answer: c. Smoking in a public place
13. Which of the following is a market structure characterized by a large number of firms selling similar
products?
a. Monopoly
b. Oligopoly
c. Monopolistic competition
d. Perfect competition
Answer: d. Perfect competition
14. Which of the following is a market structure characterized by a single firm selling a unique product
with no close substitutes?
a. Monopoly
b. Oligopoly
c. Monopolistic competition
d. Perfect competition
Answer: a. Monopoly
15. Which of the following is a measure of how responsive consumers are to a change in price?
a. Price ceiling
b. Price floor
c. Price elasticity of demand
d. Price elasticity of supply
Answer: c. Price elasticity of demand
16. Which of the following is a measure of how responsive suppliers are to a change in price?
a. Price ceiling
b. Price floor
c. Price elasticity of demand
d. Price elasticity of supply
Answer: d. Price elasticity of supply
17. Which of the following is an example of a public good?
a. A private jet
b. A public park
c. A luxury car
d. A designer handbag
Answer: b. A public park
18. Which of the following is a characteristic of a public good?
a. Excludability
b. Rivalry
c. Non-excludability
d. Non-rivalry
Answer: c. Non-excludability
19. Which of the following is an example of a merit good?
a. Alcohol
b. Education
c. Cigarettes
d. Gambling
Answer: b. Education
20. Which of the following is an example of a demerit good?
a. Exercise
b. Alcohol
c. Fruits and vegetables
d. Meditation
Answer: b. Alcohol
21. Which of the following is a measure of economic inequality?
a. GDP
b. Gini coefficient
c. Inflation rate
d. Unemployment rate
Answer: b. Gini coefficient
22. Which of the following is a measure of labor market performance?
a. GDP
b. Gini coefficient
c. Labor force participation rate
d. Interest rate
Answer: c. Labor force participation rate
23. Which of the following is an example of a trade barrier?
a. Tariffs
b. Free trade agreements
c. Open borders
d. Foreign aid
Answer: a. Tariffs
24. Which of the following is an example of a capital account transaction?
a. Imports of goods and services
b. Exports of goods and services
c. Income from foreign investments
d. Income paid to foreign investors
Answer: c. Income from foreign investments
25. Which of the following is a measure of a nation's balance of payments?
a. Fiscal deficit
b. Current account balance
c. GDP
d. National debt
Answer: b. Current account balance
26. Which of the following is an example of a tariff rate quota?
a. Limit on the quantity of goods imported
b. Tax on imported goods
c. Limit on the value of imported goods
d. Variable tax on imported goods
Answer: a. Limit on the quantity of goods imported
27. Which of the following is an example of a non-tariff trade barrier?
a. Quota on imported goods
b. Tax on imported goods
c. Price ceiling on domestic goods
d. Subsidy on domestic goods
Answer: a. Quota on imported goods
28. Which of the following is an example of a free trade agreement?
a. NAFTA
b. OPEC
c. GATT
d. World Bank
Answer: a. NAFTA
29. Which of the following is a measure of the price level relative to a base year?
a. GDP deflator
b. Consumer price index
c. Producer price index
d. Wholesale price index
Answer: a. GDP deflator
30. Which of the following is an example of a fiscal policy tool?
a. Monetary policy
b. Tariffs
c. Taxation
d. Free trade agreements
Answer: c. Taxation
31. Which of the following is an example of a contractionary fiscal policy?
a. Decrease in government spending
b. Increase in government spending
c. Decrease in taxes
d. Increase in taxes
Answer: d. Increase in taxes
32. Which of the following is an example of an expansionary fiscal policy?
a. Decrease in government spending
b. Increase in government spending
c. Decrease in taxes
d. Increase in taxes
Answer: b. Increase in government spending
33. Which of the following is an example of mandatory government spending?
a. Defense spending
b. Social Security benefits
c. Education spending
d. Infrastructure spending
Answer: b. Social Security benefits
34. Which of the following is an example of discretionary government spending?
a. Defense spending
b. Social Security benefits
c. Education spending
d. Infrastructure spending
Answer: d. Infrastructure spending
35. Which of the following is a measure of the ability of a person or group to influence government
policy?
a. Political power
b. Economic power
c. Social power
d. Cultural power
Answer: a. Political power
36. Which of the following is an example of a progressive tax system?
a. Flat tax
b. Regressive tax
c. Proportional tax
d. Graduated income tax
Answer: d. Graduated income tax
37. Which of the following is an example of a regressive tax system?
a. Flat tax
b. Graduated income tax
c. Proportional tax
d. Sales tax
Answer: d. Sales tax
38. Which of the following is a measure of the amount of money circulating in the economy?
a. M1
b. M2
c. M3
d. M4
Answer: b. M2
39. Which of the following is a measure of the money supply that includes cash and checking account
deposits?
a. M1
b. M2
c. M3
d. M4
Answer: a. M1
40. Which of the following is an example of a commodity money?
a. Gold
b. Currency
c. Check
d. Credit card
Answer: a. Gold
41. Which of the following is an example of fiat money?
a. Gold
b. Currency
c. Check
d. Credit card
Answer: b. Currency
42. Which of the following is a measure of the interest rate charged by banks for short-term loans?
a. Prime rate
b. Bond yield
c. Mortgage rate
d. Savings rate
Answer: a. Prime rate
43. Which of the following is an example of a capital market security?
a. Corporate bond
b. Savings account
c. Checking account
d. Money market fund
Answer: a. Corporate bond
44. Which of the following is an example of a money market security?
a. Corporate bond
b. Savings account
c. Checking account
d. Money market fund
Answer: d. Money market fund
45. Which of the following is a measure of the overall stock market performance?
a. S&P 500
b. NASDAQ
c. Dow Jones Industrial Average
d. Russell 2000
Answer: c. Dow Jones Industrial Average
46. Which of the following is a measure of the value of all goods and services produced within a country
during a given period of time?
a. GDP
b. GNP
c. NNP
d. NI
Answer: a. GDP
47. Which of the following is a measure of the value of all final goods and services produced within a
country during a given period of time?
a. GDP
b. GNP
c. NNP
d. NI
Answer: a. GDP
48. Which of the following is a measure of the value of all goods and services produced by a country's
residents, regardless of location, during a given period of time?
a. GDP
b. GNP
c. NNP
d. NI
Answer: b. GNP
49. Which of the following is a measure of the value of all final goods and services produced by a
country's residents, regardless of location, during a given period of time?
a. GDP
b. GNP
c. NNP
d. NI
Answer: b. GNP
50. Which of the following is a measure of a nation's income after all taxes and other transfer payments
have been made?
a. GDP
b. GNP
c. NNP
d. NI
Answer: d. NI
Some tips to help you prepare for your exit exam:
1. Start Early:
1️⃣
Don't wait until the last minute to start studying for your exam. Give yourself plenty of time to review all
the materials and concepts covered throughout your course.
2️⃣. Create a study plan:
Make a schedule that accounts for all the subjects and topics you need to study, and set aside blocks of
time for each one. This will help you stay on track and ensure that you cover everything before the
exam.
3️⃣. Identify weak areas:
Focus your efforts on the areas where you need the most improvement. Spend extra time studying
difficult topics and concepts.
4️⃣. Practice regularly:
Use practice tests, quizzes, and sample questions to gauge your progress and get comfortable with the
format of the exam. This will also help you identify areas where you need additional study.
5️⃣. Take care of yourself:
Get plenty of rest, eat healthy foods, and exercise regularly. A healthy body will help you maintain focus
and stay motivated.
6️⃣. Seek help from a tutor:
If you're struggling with certain subjects or topics, consider a tutor from your respective university to
help you. They can offer personalized support and guidance to help you better understand and prepare
for the exam.
7️⃣. Stay positive:
Keep a positive attitude and stay motivated throughout your exam preparation. Don't get discouraged if
you encounter challenges. Stay focused on your goals and keep pushing forward.
Good luck!
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