Class 10 Economics MCQs are a great way for students to test their knowledge of key economic concepts and their applications. These questions follow the NCERT syllabus and cover important chapters like Development, Sectors of the Indian Economy, Money and Credit, Globalisation and the Indian Economy, and Consumer Rights. Practicing these MCQs helps students build a strong foundation in economics, boost confidence, and prepare effectively for exams.
1. Which of the following is NOT a feature of development?
a) Increase in per capita income
b) Equal distribution of wealth
c) Decline in life expectancy
d) Improvement in health and education
View Answer
Explanation: Development means improving people’s quality of life, including better healthcare, education, and income. If life expectancy declines, it means people are dying earlier, which is not a sign of development. A country with poor healthcare and unhealthy living conditions will have a low life expectancy.
2. What does HDI stand for?
a) Human Development Index
b) Human Distribution Index
c) High Development Indicator
d) Health and Development Index
View Answer
Explanation: The Human Development Index (HDI) is a global measure of how well people in a country live. It looks at three important factors:
- Life expectancy (How long people live on average)
- Education level (Literacy rate and school enrollment)
- Per capita income (Average income per person)
A country with high HDI offers good healthcare, education, and economic opportunities.
3. Which of these is NOT included in HDI calculations?
a) Literacy rate
b) Life expectancy at birth
c) Per capita income
d) Gross Domestic Product (GDP)
View Answer
Explanation: HDI focuses on human well-being, while GDP only measures a country’s economic output. A country with high GDP can still have poor education or healthcare, making HDI a better measure of overall development.
4. Why is per capita income considered better than total income for comparisons?
a) It helps in comparing living standards across countries
b) It focuses only on rural areas
c) It ignores economic growth
d) It includes only rich people’s income
View Answer
Explanation: Total income tells us how much money a country makes, but per capita income divides that amount equally among all citizens. This helps compare how well people actually live in different places. For example, India has a huge total income, but because of its large population, per capita income is lower than some smaller countries.
5. What does environmental sustainability mean?
a) Using only fossil fuels for energy
b) Exploiting natural resources for industrialization
c) Preserving resources for future generations
d) Continuous economic growth
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Explanation: Environmental sustainability means using natural resources responsibly so that future generations also have access to them. For example, planting new trees after cutting down old ones and using solar energy instead of depleting coal reserves ensure a sustainable future.
6. Which of these is an example of sustainable development?
a) Overusing groundwater without recharging
b) Cutting down forests for industries
c) Excessive mining without regulations
d) Using renewable energy like solar and wind power
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Explanation: Sustainable development means using resources without harming the environment. Switching to solar and wind power reduces pollution and prevents overuse of coal and oil, making it a better choice for the future.
7. Which organization publishes the Human Development Report?
a) United Nations Development Programme (UNDP)
b) World Health Organization (WHO)
c) International Monetary Fund (IMF)
d) World Bank
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Explanation: The United Nations Development Programme (UNDP) releases the Human Development Report (HDR) every year. It ranks countries based on HDI, helping people understand which countries provide a better standard of living.
8. How does the government contribute to National Development?
a) By reducing public facilities
b) By ignoring social welfare
c) By creating policies for employment and education
d) By increasing population
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Explanation: The government improves infrastructure, healthcare, and education to help the country develop. For example, building new roads, schools, and hospitals leads to better opportunities and a higher quality of life.
9. Why are public facilities important for development?
a) They increase the wealth of rich people
b) They help private businesses grow
c) They are only meant for urban areas
d) They ensure basic services are accessible to everyone
View Answer
Explanation: Public facilities like schools, hospitals, and clean drinking water help everyone, especially poor people, improve their quality of life. For example, free education allows children from low-income families to build a better future.
10. Why is clean drinking water considered a public facility?
a) It is a private service
b) It is a basic necessity for good health
c) It is only required in urban areas
d) It benefits only industrialists
View Answer
Explanation: Clean drinking water prevents diseases and improves public health. Since everyone needs it, governments provide water supply systems to make it affordable and accessible.
11. What does GDP stand for?
a) Gross Domestic Product
b) General Development Plan
c) Gross Demand and Production
d) Global Development Process
View Answer
Explanation: GDP (Gross Domestic Product) is the total value of all goods and services a country produces in a year. A higher GDP means a stronger economy.
12. What is the primary sector of the economy?
a) Activities related to information technology
b) Activities providing services
c) Activities related to manufacturing
d) Activities that exploit natural resources
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Explanation: The primary sector includes jobs like farming, fishing, and mining, where people directly use natural resources. It is the oldest sector and remains important in many countries.
13. Which sector does banking belong to?
a) Tertiary
b) Quaternary
c) Secondary
d) Primary
View Answer
Explanation: The tertiary sector provides services instead of producing goods. Banking, tourism, education, and healthcare are all part of this sector.
14. Why is the tertiary sector growing in India?
a) Government policies
b) Increasing demand for services
c) Development of industries
d) All of the mentioned
View Answer
Explanation: The tertiary sector in India is growing due to multiple factors. First, industrial development increases the need for services like transportation, banking, and communication. Second, as people’s income rises, they demand better healthcare, education, and entertainment services. Lastly, government policies, such as investments in infrastructure and digital services, have contributed to this sector’s expansion. As a result, the tertiary sector has become one of the largest contributors to India’s GDP.
15. What is the main problem with the unorganised sector?
a) Government regulations
b) High job stability
c) Low wages and job insecurity
d) High salaries
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Explanation: The unorganised sector in India consists of jobs that do not provide job security, regular income, or benefits like healthcare and pensions. Workers in this sector often receive low wages, work under poor conditions, and have no protection against sudden job loss. Unlike organised sector employees, they lack access to government-mandated job benefits, making their livelihood highly unstable.
16. What is the main objective of MGNREGA?
a) Reduce urban employment
b) Support private industries
c) Offer free education to children
d) Provide 100 days of guaranteed wage employment
View Answer
Explanation: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) aims to provide at least 100 days of wage employment in rural areas to people willing to do unskilled manual labor. This helps reduce poverty, provide economic security, and develop rural infrastructure. It also prevents distress migration to cities by ensuring work is available in villages.
17. Which type of unemployment is mostly found in rural India?
a) Structural unemployment
b) Open unemployment
c) Disguised unemployment
d) Technological unemployment
View Answer
Explanation: Disguised unemployment occurs when more people are engaged in a job than necessary. It is common in rural India, especially in agriculture. For example, if a farm requires only 3 workers but 6 are working, the extra 3 are not actually increasing productivity. This means they are technically unemployed, even though they appear to be working.
18. Which sector is responsible for services like healthcare and education in India?
a) Industrial sector
b) Private sector only
c) Public sector only
d) Both public and private sectors
View Answer
Explanation: In India, both the public and private sectors play a crucial role in providing healthcare and education. The government runs hospitals and schools to make these services affordable for all, while private institutions offer advanced facilities at a higher cost. A balance between the two ensures accessibility and quality in these essential services.
19. What does the term “economic development” refer to?
a) Increase in national income and improvement in living standards
b) Growth of industries only
c) Increase in exports only
d) Expansion of agriculture
View Answer
Explanation: Economic development is not just about industries or exports—it includes a rise in national income, job opportunities, and people’s quality of life. A country with good economic development ensures better healthcare, education, and infrastructure, leading to overall progress in society.
20. What is the key difference between the public and private sectors?
a) The private sector is controlled by the government
b) The public sector focuses on profit-making
c) The private sector is owned by individuals, while the public sector is government-controlled
d) The public sector only operates in rural areas
View Answer
Explanation: The public sector is managed by the government and provides services like public transport, healthcare, and defense, often focusing on welfare rather than profit. The private sector is owned by individuals or businesses and operates to earn profits. Both sectors are essential for economic growth.
21. What is the primary function of money?
a) Unit of account
b) Store of value
c) Medium of exchange
d) All of the mentioned
View Answer
Explanation: Money has multiple roles in an economy. It is a medium of exchange that allows us to buy and sell goods without barter trade. It is a store of value, meaning we can save it for future use. It is also a unit of account, which helps us measure the value of different goods and services.
22. Who issues currency notes in India?
a) Ministry of Finance
b) Commercial Banks
c) Reserve Bank of India
d) State Bank of India
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Explanation: The Reserve Bank of India (RBI) is responsible for issuing currency notes in India. It ensures a stable money supply, controls inflation, and regulates banking operations. The Ministry of Finance, however, oversees the printing of one-rupee notes and coins.
23. Why is money called a medium of exchange?
a) It increases the population
b) It eliminates the need for double coincidence of wants
c) It helps in growing crops
d) It facilitates barter transactions
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Explanation: Before money, people exchanged goods through barter trade, which required both parties to have what the other needed (double coincidence of wants). Money simplifies this by acting as an accepted medium of exchange, making transactions easier and more efficient.
24. What is the purpose of Self-Help Groups (SHGs)?
a) To promote international trade
b) To provide employment to the rich
c) To encourage informal lending
d) To help the poor access loans collectively
View Answer
Explanation: Self-Help Groups (SHGs) consist of people (mostly women) who save small amounts regularly and use their pooled money to help members get loans without collateral. Banks also provide loans to SHGs, enabling small businesses and economic self-sufficiency.
25. How does credit help businesses grow?
a) It helps finance production and expansion
b) It increases taxation
c) It eliminates the need for investment
d) It reduces employment
View Answer
Explanation: Businesses need money to buy raw materials, expand operations, and hire workers. Credit provides the necessary funds, allowing businesses to invest in growth. When used wisely, credit leads to higher production, job creation, and economic development.
26. Why do small farmers often struggle with credit repayment?
a) Too much reliance on technology
b) Government restrictions on farming
c) High interest rates and unpredictable crop yields
d) Lack of work ethic
View Answer
Explanation: Small farmers rely on unpredictable factors like rainfall and market prices, making it difficult to repay loans. Additionally, many borrow from informal moneylenders at very high interest rates, leading to debt traps. Government schemes and bank loans at lower rates help reduce this issue.
27. What is financial inclusion?
a) Ensuring everyone can access financial services
b) Giving loans only to rich people
c) Providing business loans only in cities
d) Limiting banking services to private banks
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Explanation: Financial inclusion means making sure everyone—especially the poor—can use banking services like savings accounts, loans, and insurance. This helps people manage money better and improves their lives. Imagine a small farmer who gets a loan easily from a bank instead of borrowing from a moneylender at high interest. That’s financial inclusion!
28. Why is money considered a better medium of exchange than the barter system?
a) It increases farming production
b) It requires no effort
c) It is based on supply and demand
d) It is accepted everywhere
View Answer
Explanation: In the barter system, you had to find someone who wanted exactly what you had—like trading wheat for rice. But money solves this problem because everyone accepts it in exchange for goods and services. That’s why money makes trade easier and faster!
29. Which of the following is NOT an advantage of digital transactions?
a) They are quick and convenient
b) You don’t need to carry cash
c) There is no risk of fraud or hacking
d) They help keep a record of transactions
View Answer
Explanation: Digital payments are fast, secure, and help you track spending. But they can have risks like fraud and hacking if you don’t use secure passwords or click on suspicious links. Always be careful while making online payments!
30. Why are demand deposits considered money?
a) They can be withdrawn anytime
b) They have a fixed maturity period
c) They are used only for big purchases
d) They are issued by the government
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Explanation: Demand deposits are like money because you can withdraw them anytime from your bank. For example, when you swipe your debit card at a store, money is instantly deducted from your bank account—just like using cash!
31. Why does everyone prefer to receive payments in money?
a) Because it has its own value
b) Because it can be used to buy anything
c) Because it can’t be stolen
d) Because it is backed by gold
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Explanation: Money is accepted everywhere and can be used to buy anything—groceries, clothes, or even a house. Unlike barter, where you needed to find someone willing to trade, money makes transactions simple.
32. What is the main goal of liberalisation?
a) To limit foreign trade
b) To promote traditional industries
c) To increase import taxes
d) To reduce government control over businesses
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Explanation: Liberalisation means reducing government restrictions on businesses. It allows companies to grow freely, attract foreign investments, and create jobs. For example, after liberalisation in India (1991), many global brands like McDonald’s and Amazon entered the Indian market.
33. What role do MNCs play in globalisation?
a) They stop international trade
b) They only support local products
c) They expand businesses across many countries
d) They reduce foreign investments
View Answer
Explanation: MNCs (Multinational Companies) like Apple, Toyota, and Nestlé operate in many countries. This increases trade, spreads new technology, and creates jobs worldwide. Think about how a Samsung phone is designed in South Korea, manufactured in China, and sold in India—that’s globalisation!
34. What is foreign investment?
a) When local companies invest in their own country
b) When MNCs invest in another country
c) When businesses invest only in stocks
d) When investments do not involve businesses
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Explanation: Foreign investment happens when a company from one country invests money in another country. For example, when Google sets up offices in India or Tesla builds a factory in China, that’s foreign investment.
35. What does the World Trade Organization (WTO) do?
a) Controls trade within one country
b) Stops international trade
c) Helps countries trade freely and fairly
d) Supports only rich nations
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Explanation: The WTO ensures that trade between countries is fair and without unnecessary restrictions. For example, it helps make sure that Indian companies can sell their products in Europe without high import taxes.
36. Why do MNCs invest in developing countries?
a) Because labor is cheap and there are large markets
b) Because trade rules are very strict
c) Because they discourage foreign investments
d) Because production costs are high
View Answer
Explanation: MNCs prefer developing countries like India and Vietnam because they have cheap labor and growing markets. That’s why brands like Nike and Samsung set up factories there—they save costs and sell to a large number of people.
37. What is outsourcing?
a) Banning foreign investments
b) Stopping foreign trade
c) Increasing trade barriers
d) Hiring other companies to provide services
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Explanation: Outsourcing means hiring another company (often in another country) to do specific work. For example, many American companies outsource customer service jobs to India because it’s cheaper and efficient.
38. How has globalisation affected Indian workers?
a) Increased unemployment everywhere
b) More demand for skilled workers in IT and services
c) Decreased wages in all jobs
d) Shut down all local industries
View Answer
Explanation: Globalisation has created jobs in IT and services (like software engineering, customer support). However, it has also affected small businesses that can’t compete with big companies.
39. What is the main advantage of interlinking production across countries?
a) Higher production costs
b) Less international trade
c) More efficiency and profit
d) Fewer product choices
View Answer
Explanation: Companies produce different parts in different countries to save money. For example, an iPhone’s design is from the U.S., the screen from South Korea, and assembly in China. This reduces costs and increases profits.
40. How do international supply chains affect production?
a) They allow different parts to be made in different countries
b) They slow down manufacturing
c) They reduce product variety
d) They encourage only local production
View Answer
Explanation: International supply chains mean different steps of production happen in different countries. For example, cars may have engines made in Germany, seats from India, and final assembly in Japan. This makes production faster, cheaper, and more efficient.
41. What is the primary objective of consumer rights?
a) Promoting monopolies
b) Increasing product prices
c) Protecting businesses from losses
d) Ensuring fair treatment and protection for consumers
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Explanation: Consumer rights exist to protect buyers from unfair trade practices, faulty products, and misleading advertisements. Imagine buying a mobile phone that stops working in two days, but the shop refuses to replace it. Consumer rights ensure that you can demand a fair resolution.
42. Which of the following is NOT a consumer right?
a) Right to monopoly
b) Right to safety
c) Right to be informed
d) Right to choose
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Explanation: Consumer rights include the Right to Safety (protection from harmful goods), Right to Information (knowing product details), and Right to Choose (buying freely without pressure). A monopoly means one company controls everything, leaving consumers with no choice, which goes against consumer rights.
43. Which of these is an unfair trade practice?
a) Giving customers choices
b) Providing correct product details
c) Selling goods at a discount
d) Misleading advertisements
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Explanation: Unfair trade practices deceive consumers. For example, if a fairness cream claims you will get “perfectly white skin in 7 days” without proof, that’s a misleading advertisement. Such practices trick people into buying products based on false promises.
44. Which of these is a consumer grievance?
a) Purchasing a product at a discounted price
b) Getting free after-sale service
c) Receiving a damaged product
d) Getting a product of choice
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Explanation: A consumer grievance means a complaint due to poor product quality or unfair treatment. Imagine ordering a new laptop online, but receiving an empty box instead—that is a serious consumer grievance.
45. What is the main purpose of the Consumer Protection Act?
a) To provide relief and protection to consumers from exploitation
b) To restrict consumer rights
c) To regulate government policies
d) To help consumers pay higher prices
View Answer
Explanation: The Consumer Protection Act (CPA) helps consumers file complaints against fraud, defective products, and unfair pricing. If a company refuses to honor a warranty, you can file a legal case under this act.
46. Which of these rights ensures that consumers receive correct information about products?
a) Right to Choice
b) Right to Information
c) Right to Representation
d) Right to Safety
View Answer
Explanation: The Right to Information ensures that companies provide clear, truthful details about their products. If a food product contains harmful chemicals, the company must mention it in the ingredients list.
47. What is the role of the Consumer Disputes Redressal Commission?
a) To promote the sale of imported goods
b) To regulate industrial production
c) To settle disputes between consumers and sellers
d) To protect businesses from financial losses
View Answer
Explanation: If you buy an expensive fridge that stops working in a week but the company refuses to repair it, you can approach the Consumer Disputes Redressal Commission to resolve the issue. This system helps ensure that consumers get fair treatment.
48. What is a consumer’s primary responsibility before purchasing a product?
a) Trust all advertisements
b) Avoid comparing products
c) Buy only the cheapest product
d) Demand a bill or receipt
View Answer
Explanation: Always ask for a bill or receipt when making a purchase. This acts as proof of purchase in case of defects. If a store refuses to accept returns for a faulty TV but you have a bill, you can file a complaint.
49. How do advertisements sometimes mislead consumers?
a) By using false claims and exaggerated benefits
b) By showing both advantages and disadvantages of a product
c) By informing consumers about their rights
d) By providing complete product details
View Answer
Explanation: Many advertisements use flashy marketing tricks. A shampoo might claim to stop hair fall in “one wash,” but without scientific proof, this is misleading. Consumers should always check facts before trusting ads.
50. What does the Right to Consumer Education ensure?
a) Consumers remain unaware of their rights
b) Consumers are educated about their rights and responsibilities
c) Consumers are forced to file complaints
d) Consumers can only buy from government-approved sellers
View Answer
Explanation: The Right to Consumer Education ensures that people know their rights and responsibilities. Schools, NGOs, and governments educate consumers about fraud, misleading ads, and the importance of legal action.
51. Which of the following is a key feature of globalisation?
a) Increased isolation
b) Reduction in foreign investments
c) Free movement of capital, goods, and services
d) Protectionism
View Answer
Explanation: Globalisation means countries trade freely, allowing businesses to grow worldwide. A company like Nike designs products in the U.S., manufactures in Vietnam, and sells in India—all because of globalisation!
Class 10 Economics MCQs – Chapter-wise Practice
Explore the topics below to practice multiple-choice questions (MCQs) from each chapter of Class 10 Economics:
- Class 10 Economics Chapter 1 – Development Economics
- Class 10 Economics Chapter 2 – Sectors of the Indian Economy
- Class 10 Economics Chapter 3 – Money and Credit
- Class 10 Economics Chapter 4 – Globalisation and the Indian Economy
- Class 10 Economics Chapter 5 – Consumer Rights
Why Should You Practice Class 10 Economics MCQs?
Practicing Class 10 Economics MCQs is an effective way to prepare for exams and strengthen your understanding of economic concepts.
- Revises Key Concepts: MCQs help reinforce important topics like Development, Sectors of the Indian Economy, Money and Credit, Globalisation and the Indian Economy, and Consumer Rights.
- Improves Exam Skills: Regular practice enhances your ability to answer questions quickly and accurately, which is crucial for scoring well in exams.
- Enhances Understanding: Solving MCQs helps you grasp economic principles better by applying them to different scenarios.
- Reduces Exam Stress: Continuous practice builds confidence, making you feel more prepared and less anxious during exams.
Frequently Asked Questions (FAQs) About Class 10 Economics MCQs
Q1. What are the key chapters to focus on for Class 10 Economics MCQs?
The key chapters in the NCERT Economics syllabus include:
- Development
- Sectors of the Indian Economy
- Money and Credit
- Globalisation and the Indian Economy
- Consumer Rights
Q2. How do MCQs help in exam preparation?
MCQs help with revision, improve problem-solving speed, enhance time management, and highlight weak areas for focused study.
Q3. Are Class 10 Economics MCQs based on the NCERT syllabus?
Yes, these MCQs strictly follow the NCERT syllabus and cover all essential topics.
Q4. How often should I practice Class 10 Economics MCQs?
Practicing MCQs daily or at least a few times a week ensures better understanding and retention of concepts.
Q5. Can MCQs help with quick revision?
Yes, MCQs are great for quick revision as they help you recall important concepts and facts efficiently.
Q6. Are Class 10 Economics MCQs useful for all types of exams?
Yes, practicing MCQs helps in preparing for school exams as well as competitive exams where objective-type questions are asked.
