Economics multiple choice questions
GCSE and O level
Public Expenditure vs Private Expenditure
Multiple Choice Questions and Answers
1. What is most likely to be the responsibility of a central government?
A) The provision of immigration officials at an airport
B) The provision of security cameras in a shopping center
C) The provision of security staff at a bank
D) The provision of ticket inspectors on a train
2. Which concepts does the statement involve? "In 2012, the local government of a city decided to increase parking charges for motorists. It was intended to raise money to correct a deficit in the local government's budget. The local government said if they did not increase charges, they would not be able to provide all their current services. Businesses complained about the likely loss of revenue if parking charges were increased."
A) Inflation and the private sector
B) Opportunity cost and public expenditure
C) Private benefit and the free market
D) Unlimited resources and a centrally planned economy
3. What is not a public sector expenditure?
A) Claims paid on travel insurance for canceled flights
B) Collections of rubbish by a local council to meet regulations on waste disposal
C) Grants from central funds to compensate people whose property has been damaged by storms
D) The establishment of a national database to assist the police in finding criminals
4. Which economic ideas cannot be found in the above statement? "A large supermarket applied to build on land which was in an area of natural beauty. The local government allowed the building, even though the natural beauty of the area would be lost because many jobs would be created and much-needed income would be brought to the local community."
A) External cost and private enterprise
B) Free market and the conservation of resources
C) Opportunity cost and improved standards of living
D) Public sector and external benefit
5. What is most likely to be the responsibility of a government?
A) The building of a food processing plant
B) The building of a housing estate
C) The building of a large shopping center
D) The building of infrastructure
6. How could the government protect the interests of households after selling a large gas company to the private sector?
A) By excluding all competition from foreign companies
B) By imposing a tax on excess profits
C) By introducing a quota system for imports of gas
D) By removing price controls on gas
7. Which type of business organization is necessarily in the public sector of the economy?
A) Multinational company
B) Public limited company
C) Public corporation
D) Sole trade
8. What is not included in public expenditure?
A) Capital spending by firms
B) Interest payments on government borrowing
C) Investment in defense by the central government
D) Subsidies to bus companies from local government
1. A) The provision of immigration officials at an airport
2. B) Opportunity cost and public expenditure
3. A) Claims paid on travel insurance for canceled flights
4. B) Free market and the conservation of resources
5. D) The building of infrastructure
6. B) By imposing a tax on excess profits
7. C) Public corporation
8. A) Capital spending by firms
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