Please refer to Chapter 7 Introduction to Macro Economics MCQ Class 12 Economics with answers below. These multiple-choice questions have been prepared based on the latest NCERT book for Class 12 Economics. Students should refer to MCQ Questions for Class 12 Economics with Answers to score more marks in Grade 12 Economics exams. Students should read the chapter Introduction to Macro Economics and then attempt the following objective questions.

MCQ Questions Class 12 Economics Chapter 7 Introduction to Macro Economics

Introduction to Macro Economics MCQ Class 12 Economics provided below covers all important topics given in this chapter. These MCQs will help you to properly prepare for exams.

Question. What is known as the study of individual units?
(a) Macroeconomics
(b) Microeconomics
(c) Income and Employment Theory
(d) Development economics

Question. When was the gold standard abandoned?
(a) 1930’s
(b) 1920’s
(c) 1940’s
(d) 1950’s

Question. Who wrote the book “General Theory of Employment, Interest and Money”?
(a) Adam Smith
(b) Prof. J. M. Keynes
(c) Prof. J. N. Keynes
(d) Alfred Marshall

Question. Balance of trade is measured as :
(a) Difference between import and export goods
(b) Difference between import and export services
(c) Difference between import and export of capital
(d) Difference between all export and all imports: Difference between import and export goods

Question. When was the famous book of Prof. Keynes published?
(a) 1930
(b) 1931
(c) 1936
(d) 1940

Question. Who is considered as father of modern macroeconomics?
(a) Adam Smith
(b) Prof. J. M. Keynes
(c) Prof. J. N. Keynes
(d) Alfred Marshall

Question. What is the relationship between supply of foreign exchange and exchange rate?
(a) Inverse
(b) Direct
(c) One to one
(d) No to relationship: Direct

Question. The book “General Theory of Employment, Interest and Money” was published in———-
(a) 1836
(b) 1936
(c) 1963
(d) None of these

Question. The operation of future delivery in the foreign exchange market is known as
(a) Spot market
(b) Current market
(c) Forward market
(d) Domestic market

Question. Which one is a merit of the fixed exchange rate?
(a) Promotes Foreign Trade
(b) Induces Foreign Capital
(c) Increases Capital Formation
(d) All the above

Question. Macroeconomics became popular after————-
(a) Great depression of 1929- 33
(b) 1972-73
(c) 1996- 97
(d) 2006- 07

Question. The term ‘macro’ has been derived from————–
(a) Greek word ‘makros’ which means large
(b) English word ‘makros’ which means large
(c) Greek word ‘makros’ which means small
(d) French word ‘makros’ which means large

Question. What is the cause of the devaluation of any country’s currency?
(a) Increase in the domestic inflation rate
(b) Domestic real interest rates are less than foreign interest rates
(c) Much increase in the income
(d) All of these

Question. With what kinds of topics does macroeconomics concern itself?
(a) Economic activities of individual firms, households, and other organizations
(b) Forces of supply and demand in a particular market
(c) Consumer behavior and firms output decisions
(d) The labor market, wages, and hiring decisions
(e) Aggregate economic phenomena like the rate of unemployment and inflation

Question. Which of the following is not an example of one of the three macroeconomic goals discussed in the text?
(a) Preventing the economy from experiencing too much unemployment.
(b) Preventing the economy from experiencing too much inflation.
(c) Keeping living standards high enough for people to live decent, meaningful lives.
(d) Making sure the economy is sustainable into the future.
(e) Providing the best environment for corporations.

Question. How is labor productivity defined?
(a) The level of output produced per capita.
(b) The level of output produced per worker (or worker-hour).
(c) The level of output produced as a share of GDP.
(d) The level of human capital in the workforce.
(e) The level of output produced per capital input.

Question. Which of the following is one of the three macroeconomic goals discussed in the text?
(a) Growth in the size of corporations
(b) Living standards growth
(c) Growth in trade and globalization
(d) Technological innovation
(e) None of the above

Question. What problems are we most likely to see at which stage of the business cycle?
(a) High inflation during recessions.
(b) High unemployment during booms.
(c) Low inflation during booms.
(d) High unemployment during recessions.
(e) Both high unemployment and high inflation during booms.

Question. Which of the following does not describe the economic events of the Great Depression?
(a) Stock markets plummeted in the 1929 stock market crash.
(b) A lack of confidence in banks led to runs on the banks and bank failures.
(c) Production dropped by about 30% between 1929 and 1933.
(d) The unemployment rate peaked to 25% at the height of the depression.
(e) The economic crises was short lived and markets quickly adjusted back to equilibrium.

Question. Which of the following are the three dimensions of sustainability as discussed in the text?
(a) Ecological, financial, and social sustainability
(b) Ecological, financial, and political sustainability
(c) Ecological, financial, and cultural sustainability
(d) Ecological, technological, and human sustainability
(e) Ecological, technological, and social sustainability

Question. Which of the following is not an issue concerning social sustainability?
(a) The disparities between the “haves” and the “have-nots.”
(b) The ability of the next generation to contribute to a healthy economy and society
(c) The need for steady growth in production
(d) The creation of social disruption and political strife
(e) The ability of the next generation to experience social and political participation and inclusion.

Question. Which of the following is not one of the ideas associated with the school of classical economics?
(a) Specialization and the division of labor
(b) Laissez-faire and the functioning of markets free of government intervention
(c) The pursuit of individual self-interest leads to positive economic outcomes.
(d) Supply creates its own demand
(e) Markets sometimes fail, necessitating government intervention.

Question. Which of the following is not one of the ideas of Keynesian economics?
(a) An economy can experience insufficient demand
(b) Governments can step in to help boost aggregate demand
(c) Active use of fiscal policy can help keep employment rates up.
(d) Governments should focus on keeping the money supply steady
(e) Lowering interest rates alone may be insufficient if investors lack the confidence to engage in spending.

Question. Why is the instability of the business cycle a problem?
(a) During recessions there is high unemployment, and resources are underutilized.
(b) High unemployment is associated with individual and social stress, such as suicide, domestic violence, illness and crime.
(c) During booms, high inflation can erode purchasing power, savings and pensions.
(d) Unpredictable fluctuations in rates of inflation, interest rates, and foreign exchange rates make it difficult for individuals and organizations to plan for the future.
(e) All of the above.

Question. In macroeconomics, we study about ——————
(a) Theory of National Income & Employment
(b) Theory of Money Supply & Price Level
(c) Theory of International Trade & Eco growth
(d) All of the above.

Question. The study of groups and broad aggregates of the economy is known as———–
(a) Microeconomics
(b) Macroeconomics
(c) International Economics
(d) None of the above

Question. Mr. Skund Kumar wants to study the national income. Which branch of economics will he have to study?
(a) Microeconomics
(b) Price theory
(c) Factor price determination
(d) Macroeconomics

Question. The term microeconomics and macroeconomics were first given by ———–
(a) Adam Smith
(b) Prof. J. M. Keynes
(c) Ragner Frisch
(d) Alfred Marshall

Question. Which of the following is/are the goals of macroeconomics———–
(a) To Achieve Higher Level of GDP
(b) To Achieve Higher Level of Employment
(c) Stability of Prices
(d) All of the above.

Question. What are the tools of macroeconomics?
(a) Monetary Policy
(b) Fiscal Policy
(c) Income Policy
(d) All of the above.

Question.“Economics is a science of logic.’’ Who said it ?
(a) Hicks
(b) Keynes
(c) Robbins
(d) Marshall 

Question. Mr. Skund Kumar wants to study the national income. Which branch of economics will he have to study?
(a) Microeconomics
(b) Price theory
(c) Factor price determination
(d) Macroeconomics 

Question. The basic factors of production are land, labour, capital, and _____.
(a) Enterprise
(b) Investment
(c) Machinery
(d) Resources 

Question. Which one is inclded in National Income?
(a) winning from lottery
(b) milk purchase by a dairy shop
(c) national debt interest
(d) none of these.

Question. Which of the following is studied under Micro Economics ?
(a) Individual unit
(b) Economic Aggregate
(c) National Income
(d) None of these 

Question. Macro-static equilibrium implies:
(a) A complete absence of change
(b) A change at an unchanged rate
(c) A change in only absolute values
(d) None of these 

Question. What is the name of the book written by J.M. Keynes?
(a) The Wealth of Nation
(b) The General Theory of Employment, Interest, and Money
(c) Political Economy
(d) None of these 

Question. Which of the following is studied under Macro Economics ?
(a) National Income
(b) Full. Employment
(c) Total Production
(d) All of these

Question. which of the following is not an economic activity and hence not included while estimating national income in india?
(a) medical services rendered by a dispensary
(b) a housewife doing household work
(c) a lawyer doing his practice
(d) a maid working full time with a family 

Question. Under which type of activity would you categorise the sale of shares of another firm whilst preparing the cash flow statement?
(a) Financing activity
(b) Investing and financing
(c) Operating activity
(d) Investing activity 

Question. Who used the word ‘micro’ for the first time:
(a) Marshall
(b) Boulding
(c) Keynes
(d) Ragnar Frisch 

Question. Which of the following is the salient feature of factors (or resources) ?
(a) These are limited as compared to wants
(b) These have alternative uses
(c) Both (a) and (b)
((d) None of the above 

Question. Which of the following is NOT a flow variable?
(a) Income
(b) Wealth
(c) Saving
(d) Investment 

Question. When did the great depression occur?
(a) 1929-30
(b) 1934-35
(c) 1938-39
(d) 1941-42 

Question. What is a good in economics
(a) It is a service.
(b) It can be a service.
(c) It is something that appears appealing.
(d) It is something that satisfies wants and needs.

Question. Which among the following is not a feature of Keynesian theory?
(a) Short run
(b) Wage price flexibility
(c) Fiscal policy
(d) Underemployment equilibrium

Question. Two sector economy consists of:
(a) Households, firms
(b) Households, Government
(c) Firms, Foreign sector
(d) Firms, Government

Question. If factor cost is greater than Market price, then it means that:
(a) Indirect taxes > subsidies
(b) Indirect taxes = subsidies
(c) Indirect Taxes < Subsidies
(d) Indirect taxes = and > subsidies 

Question. Market price ad factor cost would be equal when there is:
(a) no direct tax
(b) no indirect tax
(c) no subsidy
(d) no indirect tax and no subsidy 

Question. In which type of economy, domestic income is equal to national income?
(a) OPen economy
(b) Closed Economy
(c) Both a and b
(d) Neither a nor b 

Question. National income is equal to:
(a) Domestic product plus factor income earned from abroad
(b) domestic product plus net factor income earned from abroad
(c) Domestic product mins factor income earned from abroad
(d) Domestic product plus export minus imports 

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