MCQs on Introduction of Macro Economics
Economics is one of the most important subject in Humanities and Commerce stream. In class 12, CBSE has two books for Class 12 student. First is Introductory Macro Economics while the second one Indian Economic Development.
We, here, on cbsestudent.com are providing you quality material on the subject Economics, especially for class 12 students of CBSE board.
Introduction is first chapter of the Introductory Macro Economics which introduces you to the Macro Economics branch of Economics. It tells some history of Modern Economics and development of Macro Economics as a separate branch due to the Great Depression of 1929.
Now, we bring to you most important MCQs on Introduction, chapter-1 of Introductory Macro Economics. We hope that they will help you to get maximum marks in the upcoming CBSE Economics Exam on March 19, 2025.
These MCQs are also important for CUETÂ Economics Domain. They are also helpful in other exams like SSC, state selection commission exams, UPSC etc for having a preliminary knowledge of the subject Economics.
Lets Start the MCQs
Q.1 What is the primary focus of Macro Economics?
(a) Individual consumers and firms
(b) The economy as a whole
(c) Small business operations
(d) Market demand and supply
Answer: Option (b) is correct option
Brief Explanation: Macro Economics focuses on the whole economy. It studies issues like inflation, national income and employment. In contrast, Microeconomics deals with individual economic activities like market demand and supply of a good or product.
Q.2 Who is considered the founding father of modern economics?
(a) John Maynard Keynes
(b) Karl Marx
(c) Adam Smith
(d) David Ricardo
Answer: Option (c) is correct option
Brief Explanation: Adam Smith is considered as the father of modern economics. He famous work ‘The Wealth of Nations’ (1776) is a pioneer work in the field of Modern Economics.
Q.3. Macro Economics became a separate branch of economics after which major event?
(a) World War I
(b) Industrial Revolution
(c) Great Depression
(d) World War II
Answer: Option (c) is correct option
Brief Explanation: The Great Depression of 1929 was a major event which led to development of Macro Economics as a separate branch. Famous Economics like John Maynard Keynes (JM Keynes) contributed a lot in its development during and after the Great Depression.
Q.4 The Great Depression caused unemployment in the United States to rise from 3% to:
(a) 10%
(b) 15%
(c) 25%
(d) 30%
Answer: Option (c) is correct option
Brief Explanation: During the Great Depression of 1929, United States of America was badly affected. In fact, the Great Depression started from the USA itself and spread to other parts of the world. Unemployment rate in the United States increased to 25% from 3%.
Q.5 Which economist is known for the book ‘The General Theory of Employment, Interest and Money?
(a) Adam Smith
(b) Milton Friedman
(c) John Maynard Keynes
(d) Alfred Marshall
Answer: Option (c) is correct option
Brief Explanation: John Maynard Keynes is known for the book ‘The General Theory of Employment, Interest and Money’ who published it in 1936. He is also considered Father of Macro Economics.
Q.6 What is a characteristic of a capitalist economy?
(a) Government owns all businesses
(b) Private ownership of resources and firms
(c) Centralized control of production
(d) Equal distribution of income
Answer: Option (b) is correct option
Brief Explanation: Private ownership of businesses and resources is the main characteristics of a capitalistic economy. Â Public Sector is confined to only some administrative fields or to important functions of government like defense, law and order etc.
Q7. Which of the following is not a Macro Economic Agent?
(a) Tata Iron and Steel Company
(b) Reserve Bank of India
(c) Ram as owner of small firm
(d) None of the above
Answer: Option (b) is correct option
Brief Explanation: Economic agents are persons/entities/organisations which take economics decisions like consumption, production, distribution etc. An individual firm or consumer is Micro Economics Agent. However, decision of institution like Reserve Bank of India affect whole economy. As such, it is a Macro Economic agent.
Q.9 Who proposed the idea that individual self-interest in markets leads to overall economic well-being?
(a) John Maynard Keynes
(b) Adam Smith
(c) Karl Marx
(d) None of the above
Answer: Option (b) is correct.
Brief Explanation: It was father of Modern Economics, Adam Smith, who proposed the idea that when individuals pursue their own interests, it leads to greater economic welfare for society as a whole.
Q.10 What does aggregate output refer to in Macro Economics?
(a) Total production of goods in one industry
(b) Combined output of all goods and services in an economy
(c) Average income of a worker
(d) The price level of a specific product
Answer: Option (b) is correct option
Brief Explanation: Aggregate output refers to the total production of goods and services in an economy. All other options are related to Micro Economics
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