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Grade 12 Economics Model Questions All 60

The document contains a model set of 60 economics questions and answers for Ethiopian Grade 12 students. It covers various economic concepts such as the purpose of economics, types of goods, economic systems, demand laws, subsidies, central bank functions, and fiscal policy. Each question is followed by multiple-choice answers, with the correct answer indicated.

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ahmedabaynew6
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46 views3 pages

Grade 12 Economics Model Questions All 60

The document contains a model set of 60 economics questions and answers for Ethiopian Grade 12 students. It covers various economic concepts such as the purpose of economics, types of goods, economic systems, demand laws, subsidies, central bank functions, and fiscal policy. Each question is followed by multiple-choice answers, with the correct answer indicated.

Uploaded by

ahmedabaynew6
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Ethiopian Grade 12 Economics - Model

Questions with Answers (1–60)


1. 1. What is the primary purpose of economics?

 A. To create money
 B. To study production techniques
 C. To allocate scarce resources efficiently (Correct Answer)
 D. To control the government

2. 2. Which of the following is a *normative* economic statement?

 A. The unemployment rate is 5%


 B. Inflation increased by 2%
 C. The government should reduce taxes (Correct Answer)
 D. Ethiopia exported 10 million tonnes of coffee

3. 3. What type of good is non-excludable and non-rival?

 A. Capital good
 B. Public good (Correct Answer)
 C. Private good
 D. Consumer good

4. 4. Which economic system is based purely on customs and traditions?

 A. Command economy
 B. Market economy
 C. Mixed economy
 D. Traditional economy (Correct Answer)

5. 5. In the law of demand, as price increases,

 A. Quantity demanded increases


 B. Quantity demanded decreases (Correct Answer)
 C. Demand increases
 D. Supply decreases

6. 6. What causes a movement along the demand curve?

 A. Change in income
 B. Change in taste
 C. Change in the price of the good itself (Correct Answer)
 D. Change in population
7. 7. A subsidy is:

 A. A tax imposed on imports


 B. A financial aid to producers to reduce costs (Correct Answer)
 C. A type of loan
 D. A reward for exports

8. 8. Which of the following is not a function of the central bank?

 A. Issuing currency
 B. Controlling inflation
 C. Providing loans to the public (Correct Answer)
 D. Managing foreign reserves

9. 9. What is meant by 'invisible hand' in economics?

 A. Government control
 B. International trade
 C. Self-regulating nature of the market (Correct Answer)
 D. Central bank intervention

10. 10. What is the result of price ceilings?

 A. Surplus
 B. Equilibrium
 C. Shortage (Correct Answer)
 D. Inflation

11. 11. GDP per capita is calculated by:

 A. Total GDP divided by exports


 B. Total GDP divided by population (Correct Answer)
 C. National income minus taxes
 D. GDP multiplied by inflation

12. 12. What is meant by ‘monopoly’?

 A. A single seller dominates the market (Correct Answer)


 B. Multiple sellers compete
 C. Government regulates all prices
 D. Buyers set prices

13. 13. Which of the following can cause inflation?

 A. Increase in unemployment
 B. Decline in demand
 C. Increase in money supply (Correct Answer)
 D. Decrease in costs
14. 14. What is fiscal policy mainly concerned with?

 A. Interest rates
 B. Government spending and taxation (Correct Answer)
 C. Exchange rates
 D. Production planning

15. 15. Which is an example of capital formation?

 A. Consumption
 B. Importing goods
 C. Investment in machinery (Correct Answer)
 D. Export of services

16. 16. Which of the following is a leakage from the circular flow of income?

 A. Investment
 B. Consumption
 C. Saving (Correct Answer)
 D. Production

17. 17. A progressive tax is one where:

 A. The same rate is charged regardless of income


 B. Tax rate increases as income increases (Correct Answer)
 C. Only the poor are taxed
 D. Tax rate decreases as income increases

18. 18. What is a balance of payments deficit?

 A. Imports exceed exports (Correct Answer)


 B. Exports exceed imports
 C. Government earns more revenue
 D. Government spends less

19. 19. Which of the following best describes economic development?

 A. Increase in GDP
 B. Increase in inflation
 C. Improvement in living standards (Correct Answer)
 D. Rise in exports

20. 20. Privatization involves:

 A. Increasing government ownership


 B. Raising taxes
 C. Transfer of public sector enterprises to private ownership (Correct Answer)
 D. Increasing subsidies

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