SSC CGL - Basic Economics and Banking Online Test (MCQ Quiz)

1. What is the fundamental economic problem that arises due to limited resources and unlimited wants?

A) Inflation B) Scarcity C) Unemployment D) Deflation

2. Which of the following is a factor of production in economics?

A) Demand B) Consumption C) Land D) Profit

3. What does the Law of Demand state?

A) As price increases, quantity demanded increases. B) As price decreases, quantity demanded decreases. C) As price increases, quantity demanded decreases. D) As price decreases, quantity demanded remains constant.

4. Which type of economy is characterized by private ownership of resources and market-driven decisions?

A) Command Economy B) Socialist Economy C) Capitalist Economy D) Mixed Economy

5. What is the primary function of money?

A) Store of Value B) Unit of Account C) Medium of Exchange D) All of the above

6. Which economic concept measures the value of the next best alternative forgone when a choice is made?

A) Opportunity Cost B) Sunk Cost C) Marginal Cost D) Average Cost

7. What is inflation?

A) A general decrease in the price level of goods and services. B) A general increase in the price level of goods and services. C) A decrease in the money supply. D) An increase in unemployment.

8. Which of the following is a measure of national income?

A) Consumer Price Index (CPI) B) Gross Domestic Product (GDP) C) Wholesale Price Index (WPI) D) Repo Rate

9. What is the role of the Reserve Bank of India (RBI)?

A) Regulating the issue of bank notes. B) Acting as a banker to the Government. C) Managing the country's foreign exchange. D) All of the above

10. Which term describes the situation where demand for goods and services exceeds the supply?

A) Recession B) Deflation C) Shortage D) Surplus

11. What is fiscal policy primarily concerned with?

A) Government spending and taxation B) Interest rates and money supply C) Exchange rates and international trade D) Unemployment benefits and social welfare

12. Which of the following is a tool of monetary policy used by the RBI?

A) Income Tax Rate B) Corporate Tax Rate C) Repo Rate D) Customs Duty

13. What does GDP stand for?

A) Gross Domestic Production B) Gross Domestic Product C) General Development Plan D) Government Domestic Policy

14. Which type of unemployment occurs when workers' skills do not match the available jobs?

A) Frictional Unemployment B) Structural Unemployment C) Cyclical Unemployment D) Seasonal Unemployment

15. What is the main objective of a public sector bank?

A) Maximizing profits for shareholders B) Providing financial services to the public, often with social objectives C) Focusing solely on investment banking D) Operating with minimal government intervention

16. Which banking term refers to the interest rate at which the RBI lends money to commercial banks?

A) Reverse Repo Rate B) Bank Rate C) Cash Reserve Ratio (CRR) D) Statutory Liquidity Ratio (SLR)

17. What is the primary purpose of the Goods and Services Tax (GST) in India?

A) To increase the number of indirect taxes. B) To simplify the indirect tax structure and create a common national market. C) To exclusively tax luxury goods. D) To replace all direct taxes.

18. Which of the following is NOT a function of a commercial bank?

A) Accepting deposits B) Granting loans C) Issuing currency D) Providing agency services

19. What does the term 'liquidity' refer to in economics?

A) The rate of inflation. B) The ease with which an asset can be converted into cash without affecting its market price. C) The total amount of money in circulation. D) The difference between exports and imports.

20. Which economic indicator measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services?

A) Wholesale Price Index (WPI) B) Producer Price Index (PPI) C) Consumer Price Index (CPI) D) Index of Industrial Production (IIP)

21. What is the main goal of monetary policy?

A) To control government spending. B) To manage inflation and promote economic growth. C) To directly regulate wages and prices. D) To increase the national debt.

22. Which of the following is a type of financial market where short-term debt instruments are traded?

A) Capital Market B) Primary Market C) Money Market D) Secondary Market

23. What is the term for the difference between a country's total exports and total imports?

A) Current Account Balance B) Capital Account Balance C) Balance of Trade D) Fiscal Deficit

24. Which institution is responsible for issuing India's currency?

A) State Bank of India B) Ministry of Finance C) Reserve Bank of India D) National Payments Corporation of India (NPCI)

25. What is the 'repo rate'?

A) The rate at which the RBI borrows money from commercial banks. B) The rate at which commercial banks borrow money from the RBI. C) The rate at which banks lend to each other. D) The rate at which the government borrows money.

26. Which economic concept describes the total value of all goods and services produced within a country in a specific period?

A) Gross National Product (GNP) B) Gross Domestic Product (GDP) C) Net National Product (NNP) D) National Income

27. What is 'disguised unemployment'?

A) Unemployment due to economic recession. B) Unemployment where more people are employed than actually needed. C) Unemployment where skills do not match job requirements. D) Temporary unemployment between jobs.

28. Which of the following is a direct tax?

A) Sales Tax B) Value Added Tax (VAT) C) Income Tax D) Excise Duty

29. What is the primary role of the Securities and Exchange Board of India (SEBI)?

A) To regulate the banking sector. B) To regulate the stock market and protect investors. C) To manage foreign exchange reserves. D) To control inflation.

30. What does the term 'monopoly' signify in economics?

A) A market with many sellers and many buyers. B) A market with a single seller dominating the market. C) A market with few sellers and many buyers. D) A market where goods are freely exchanged without government intervention.

31. Which of the following is a tool of fiscal policy?

A) Bank Rate B) Open Market Operations C) Government Expenditure D) Cash Reserve Ratio

32. What is the 'reverse repo rate'?

A) The rate at which commercial banks lend to the RBI. B) The rate at which the RBI lends to commercial banks. C) The rate at which banks lend to each other. D) The rate at which the government borrows money.

33. Which economic system emphasizes collective ownership and control of the means of production?

A) Capitalism B) Socialism C) Feudalism D) Mercantilism

34. What is the term for the amount of money that consumers are willing and able to buy at a given price?

A) Supply B) Demand C) Equilibrium D) Scarcity

35. Which type of bank focuses on providing loans and financial services to agricultural and rural sectors?

A) Commercial Bank B) Investment Bank C) Regional Rural Bank (RRB) D) Co-operative Bank

36. What is the 'marginal propensity to consume'?

A) The proportion of income spent on goods and services. B) The proportion of additional income that is spent on consumption. C) The proportion of income that is saved. D) The total consumption expenditure.

37. Which of the following is a type of financial asset?

A) Real Estate B) Machinery C) Stocks D) Gold

38. What does the 'Balance of Payments' account track?

A) Only visible exports and imports. B) All economic transactions between a country and the rest of the world. C) Only the flow of capital into a country. D) Only the country's foreign debt.

39. What is the primary function of the World Trade Organization (WTO)?

A) To provide loans to developing countries. B) To regulate international trade and resolve disputes. C) To manage global currency exchange rates. D) To set international interest rates.

40. Which of the following is a feature of a mixed economy?

A) Complete government control over the economy. B) Private ownership of all resources. C) Coexistence of public and private sectors. D) Absence of any market regulation.

41. What is the term for the decrease in the value of an asset over time due to wear and tear or obsolescence?

A) Amortization B) Depreciation C) Appreciation D) Inflation

42. Which economic concept represents the total value of goods and services produced per person in a country?

A) Gross Domestic Product (GDP) B) Gross National Product (GNP) C) GDP per capita D) National Income

43. What is the 'multiplier effect' in economics?

A) A decrease in government spending leads to a larger decrease in aggregate demand. B) An increase in investment leads to a larger increase in aggregate income. C) An increase in savings leads to a decrease in consumption. D) A decrease in taxes leads to a proportional decrease in government revenue.

44. Which of the following is a form of indirect tax?

A) Corporate Tax B) Property Tax C) Customs Duty D) Income Tax

45. What is the primary role of the International Monetary Fund (IMF)?

A) To fund infrastructure projects. B) To promote global monetary cooperation, financial stability, and international trade. C) To provide direct loans to individuals. D) To regulate stock exchanges.

46. What does the 'liquidity trap' refer to in monetary economics?

A) A situation where interest rates are so low that monetary policy becomes ineffective. B) A situation where there is a shortage of cash in the economy. C) A period of high inflation and low economic growth. D) A situation where banks hoard excess reserves.

47. Which economic indicator measures the cost of a basket of goods and services purchased by a typical urban household?

A) GDP Deflator B) Wholesale Price Index (WPI) C) Consumer Price Index (CPI) D) Index of Industrial Production (IIP)

48. What is the term for the amount of money that producers are willing and able to offer for sale at a given price?

A) Demand B) Scarcity C) Supply D) Equilibrium

49. Which of the following is a non-performing asset (NPA) for a bank?

A) A loan on which interest is paid regularly. B) A loan where the principal or interest payment is overdue for a specified period. C) A deposit account. D) A government bond held by the bank.

50. What is the 'stagflation' phenomenon?

A) High economic growth with low inflation. B) High unemployment with high inflation. C) Low economic growth with low inflation. D) High unemployment with low inflation.

Basic Economics and Banking - Online Test

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