Go Pro
Exam guides
UPSC CSEBankingSSCRailwayState PSCDefence
Study material
FlashcardsFormula sheetsEssay topicsAbbreviationsImportant daysImportant eventsPrevious year papersDownloads
Log in Sign up

Home › Economy › Economy - Economic Terms and Concepts

Economy - Economic Terms and Concepts — Economy Questions & Practice

Practise 114 Economy - Economic Terms and Concepts questions from Economy for competitive exams such as UPSC, Banking, SSC and Railway. Read the worked questions below, check every answer with an explanation, and track what you get wrong.

Practise this topic

114 questions · 0 quizzes · free to start

Practice questions on Economy - Economic Terms and Concepts — with answers

Try each question first, then open the answer. Explanations are included.

1. Which of the following best defines 'Gross Domestic Product (GDP)'?

  1. AThe excess of a government's revenue expenditure over its revenue receipts
  2. BInflation caused by an increase in aggregate demand exceeding the available supply of goods and services
  3. CThe total monetary value of all goods and services produced within a country's borders in a specific period
  4. DThe freedom to convert domestic financial assets into foreign financial assets at market-determined rates
Show answer

Answer: C

'Gross Domestic Product (GDP)': The total monetary value of all final goods and services produced within a country's borders in a given period.

2. Which of the following best defines 'Structural Unemployment'?

  1. AThe sale or liquidation of government assets or stakes in public sector enterprises
  2. BInflation caused by an increase in aggregate demand exceeding the available supply of goods and services
  3. CUnemployment caused by a mismatch between workers' skills and the requirements of available jobs
  4. DTemporary unemployment that occurs when people are between jobs or entering the workforce
Show answer

Answer: C

'Structural Unemployment': Unemployment caused by a mismatch between workers' skills and the skills demanded by employers.

3. Which of the following best defines 'Frictional Unemployment'?

  1. AA sustained increase in the general price level of goods and services in an economy over time
  2. BThe excess of a government's revenue expenditure over its revenue receipts
  3. CA measure of economic growth that accounts for the environmental costs of production
  4. DTemporary unemployment that occurs when people are between jobs or entering the workforce
Show answer

Answer: D

'Frictional Unemployment': Short-term unemployment that occurs when people are transitioning between jobs.

4. Which of the following best defines 'Foreign Direct Investment (FDI)'?

  1. AThe difference between a government's total expenditure and its total revenue, excluding borrowings
  2. BInvestment made by a foreign entity to acquire a lasting interest in an enterprise in another country
  3. CThe total monetary value of all goods and services produced within a country's borders in a specific period
  4. DThe excess of a government's revenue expenditure over its revenue receipts
Show answer

Answer: B

'Foreign Direct Investment (FDI)': Investment made by a foreign entity to acquire a lasting management interest in an enterprise in another country.

5. Which of the following best defines 'Devaluation'?

  1. AA deliberate downward adjustment of a country's currency value relative to another currency
  2. BA sustained decrease in the general price level of goods and services in an economy
  3. CUnemployment caused by a mismatch between workers' skills and the requirements of available jobs
  4. DThe process of building up a country's stock of productive assets, such as machinery and infrastructure
Show answer

Answer: A

'Devaluation': A deliberate downward adjustment of a country's currency value relative to another currency, under a fixed exchange rate system.

Practise more Economy - Economic Terms and Concepts questions

More Economy topics

Numerical Ability - Inflation Rate (CPI) (1024)Numerical Ability - Price Index Numbers (872)Numerical Ability - GDP Growth Rate (531)Numerical Ability - GDP Deflator (453)Economy - World Currencies (105)Economy - Banking and Monetary Policy (80)Economy - Financial Markets (58)Economy - Reforms and Government Schemes (55)Economy - Taxation and Fiscal Policy (44)Economy - Economic Organizations (India) (41)Economy - Inflation, Employment and Indices (41)Economy - International Organizations (40)Numerical Ability - National Income and Per Capita Income (40)Banking & Monetary Policy (37)External Sector and Foreign Trade (32)Fiscal Policy, Budget & Taxation (32)Economic Concepts & National Income (31)Five Year Plans (29)All Economy →