CFA Economics
Past Questions

22+ verified Economics past questions for CFA. Step-by-step worked answers in 5 Nigerian languages.

Start practicing →See pricing

Economics topics (2)

Macro
1 questions
Micro
1 questions

Sample Economics past questions

1. Demand curve usually slopes:

  • A. Upward
  • B. Downward
  • C. Vertical
  • D. Horizontal

Answer: B

2. Inflation is a sustained rise in:

  • A. Wages
  • B. General price level
  • C. Unemployment
  • D. Population

Answer: B

3. When demand rises and supply is fixed, price tends to:

  • A. Fall
  • B. Rise
  • C. Stay flat
  • D. Disappear

Answer: B

4. Inflation generally reduces the ___ of money.

  • A. Weight
  • B. Purchasing power
  • C. Colour
  • D. Size

Answer: B

5. A price ceiling set below equilibrium causes:

  • A. Surplus
  • B. Shortage
  • C. No effect
  • D. Higher supply

Answer: B

6. Fiscal policy is controlled by the:

  • A. Central bank
  • B. Government
  • C. Companies
  • D. Households

Answer: B

7. The law of demand states that, ceteris paribus:

  • A. Higher price → higher quantity demanded
  • B. Higher price → lower quantity demanded
  • C. Price has no effect
  • D. Demand always rises

Answer: B

AI Explanation

Demand curves slope downward — as price rises, quantity demanded falls (all else equal).

8. Price elasticity of demand is:

  • A. Change in supply / change in demand
  • B. % change in quantity demanded ÷ % change in price
  • C. Demand × price
  • D. Supply ÷ demand

Answer: B

AI Explanation

PED measures responsiveness of demand to price changes. > 1 elastic, < 1 inelastic.

9. GDP measures:

  • A. Total population
  • B. Total market value of all final goods and services produced in a country in a period
  • C. National debt
  • D. Inflation

Answer: B

AI Explanation

GDP is the standard measure of an economy's total output, typically reported quarterly and annually.

10. Inflation is BEST defined as:

  • A. Price drops
  • B. A sustained rise in the general price level
  • C. More employment
  • D. More exports

Answer: B

AI Explanation

Inflation = sustained increase in the average price level — eroding purchasing power.

11. Monetary policy is the responsibility of:

  • A. Treasury Department
  • B. Central Bank
  • C. Stock exchange
  • D. Parliament only

Answer: B

AI Explanation

Central banks set monetary policy — managing money supply and interest rates.

12. Fiscal policy involves:

  • A. Money-supply changes
  • B. Government taxation and spending decisions
  • C. Foreign exchange only
  • D. Stock issues

Answer: B

AI Explanation

Fiscal policy is government spending and taxation — usually decided by the legislature/executive.

13. In a perfectly competitive market, firms are:

  • A. Price-setters
  • B. Price-takers
  • C. Monopolists
  • D. Suppliers only

Answer: B

AI Explanation

Many small firms producing identical products means no single firm can influence price — they are price-takers.

14. A monopoly is characterised by:

  • A. Many sellers
  • B. A single seller with significant pricing power
  • C. Identical products
  • D. Free entry

Answer: B

AI Explanation

Monopoly = one seller; barriers to entry create pricing power above marginal cost.

15. Profit maximisation occurs where:

  • A. Total revenue is highest
  • B. Marginal revenue equals marginal cost (MR = MC)
  • C. Total cost is lowest
  • D. Output is highest

Answer: B

AI Explanation

Standard microeconomic rule: produce until the marginal revenue from one more unit equals its marginal cost.

16. Supply curve typically slopes:

  • A. Downward
  • B. Upward — higher prices induce more supply
  • C. Horizontal
  • D. Vertical

Answer: B

AI Explanation

Supply curves slope upward — higher prices encourage more production due to higher profits.

17. An exchange rate of 1 USD = 1500 NGN means:

  • A. Naira is stronger
  • B. It costs 1,500 naira to buy 1 dollar
  • C. Dollar is weaker
  • D. Equal value

Answer: B

AI Explanation

Direct quote — the price of one unit of foreign currency in domestic units.

18. If a currency depreciates, exports become:

  • A. More expensive abroad
  • B. Cheaper to foreign buyers (boosting export demand)
  • C. Cancelled
  • D. Equal value

Answer: B

AI Explanation

Weaker currency → foreign buyers pay less in their currency for the same goods → stimulates exports.

19. The Phillips curve (short-run) suggests:

  • A. No relationship
  • B. An inverse relationship between unemployment and inflation
  • C. Same direction
  • D. Random

Answer: B

AI Explanation

Short-run Phillips curve: lower unemployment tends to correlate with higher inflation, holding expectations constant.

20. Quantitative easing (QE) is when a central bank:

  • A. Raises rates
  • B. Buys long-term securities to expand money supply and lower long rates
  • C. Issues new currency
  • D. Cuts banks' licences

Answer: B

AI Explanation

QE = unconventional monetary tool — central bank buys bonds to inject liquidity and lower borrowing costs.

21. Gross National Product (GNP) differs from GDP by:

  • A. Including/excluding government spending
  • B. Including income earned by nationals abroad and excluding income earned by foreigners domestically
  • C. Adding inflation
  • D. Using a 12-month measure

Answer: B

AI Explanation

GNP = GDP + net factor income from abroad. GDP is location-based; GNP is nationality-based.

22. A trade surplus occurs when:

  • A. Imports exceed exports
  • B. Exports exceed imports
  • C. Imports equal exports
  • D. There is no trade

Answer: B

AI Explanation

Trade surplus: country's exports > imports for a period. Trade deficit is the opposite.

Start practicing Economics

Get AI breakdowns on every answer. Free to start.

Practice now →