Islamic Economic system MCQs

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Islamic economic system – This differs from traditional economic theory in that its religious principles are deeply intertwined. It views the principles
Islamic Economic System MCQs

Islamic Economic System MCQs

Islamic economic system – This differs from traditional economic theory in that its religious principles are deeply intertwined. It views the principles of economic science as constant, regardless which economic system/ nation it operates within. Here on MCQs.club we have prepared Multiple Choice Questions (MCQs) on Islamic economic system that fully cover MCQs on the Factors of Islamic economic system, Islamic Finance, The Economic System in Islam, the salient features of Islamic economic system. These MCQs on Principles of Islamic Economic System are useful for Competitive exams, Professional accountancy exams and Business management exams.

  1. Factors that enhance the relevance and importance of Islamic economic systems include:
    1. Increasing integration between Muslim and non-Muslim nations
    2. Muslim nations control a substantial share of the world’s oil resources which are as critically important to Western, Eastern, developing and developed economies alike
    3. Both A&B
    4. None
  1. Islamic economic system –
    1. The Islamic economic system differs from traditional economic theory in that its religious principles are deeply intertwined.
    2. It views the principles of economic science as constant, regardless which economic system/ nation it operates within.
    3. Islamic Economic standards fundamentally based on a fair distribution of resources.
    4. All of the above
  1. Islamic economics differentiates through analysing the production and distribution of resources. Identify which of the following is correct?
    1. Economic science: improving manufacturing efficiency, productivity and the properties of inflation
    2. The economic system: how to distribute resources
    3. Its only considers option A
    4. It considers both A&B options as separate
  1. A number of features in the Islamic economic system will be shared with:
    1. Planned economies
    2. Market economies
    3. Mixed economies
    4. None
  1. The core features of Islamic economic system include:
      1. Allah is the sustainer
      2. God is the true owner of everything
      3. State ownership
      4. Practising moderation
      5. Prohibition of charging interest (Riba)
      6. Hoarding of wealth is discouraged
      7. Zakat
    1. (I) (II) and (VII) only
    2. (I) (II) (V) and (VII) only
    3. All of the above
    4. None
  1. The Islamic economic system –
    1. Uses mechanisms such as Zakat, Sadaqat and bequest to help re- distribute wealth.
    2. Concept of interest is effectively abolished. Incentivisation for saving and investment exists through profit- share and partnership.
    3. Common exploitation of the weak through relatively unlimited
    4. A&B only
  1. Islamic economics does not support the premise of relative scarcity but rather believes that there are more than enough goods and commodities to satisfy the needs of all.
    1. False
    2. True

  1. Sharia law is the branch of statute that formalises the previously discussed principles of Islamic economics into law.
    1. True
    2. False
  1. Under Sharia law –
    1. Making money from money – e.g. charging interest – is usury and therefore not permitted
    2. Wealth should only be generated through legitimate investment in assets and legitimate trade
    3. Investment in companies involved with gambling, tobacco and alcohol is prohibited
    4. Short selling and non-asset backed derivatives are not permitted
    5. All of the above
  1. There are a range of products freely available on the global financial markets that comply with Sharia Islamic law. These include:
    1. bank current accounts
    2. mortgages
    3. personal loans
    4. All of the above
  1. The Islamic financial model works on the basis of sharing risk. The bank and customer agree terms on how to share risk of an investment then divide profits between them.
    1. The above is correct
    2. The above is incorrect
  1. Whilst the range of available financial product types continues to grow, some of the key categories of Islamic finance are:
    1. Modaraba, Musharaka, Murabaha
    2. Ijara, Ijara-wa-Iqtina
    3. Both A&B
    4. None
  1. Mudaraba –
    1. This is where a financial expert offers specialist investment in which the customer and bank share profits.
    2. This is an investment partnership with profit sharing terms agreed in advance and losses limited to the initial capital invested.
    3. This is a form of credit that enables customers following Islamic principles to make a purchase without the need to take out an interest-bearing loan.
    4. All of the above
  1. Musharaka –
    1. This is where a financial expert offers specialist investment in which the customer and bank share profits.
    2. This is an investment partnership with profit sharing terms agreed in advance and losses limited to the initial capital invested.
    3. This is a form of credit that enables customers following Islamic principles to make a purchase without the need to take out an interest-bearing loan.
    4. All of the above

  1. Murabaha –
    1. This is where a financial expert offers specialist investment in which the customer and bank share profits.
    2. This is an investment partnership with profit sharing terms agreed in advance and losses limited to the initial capital invested.
    3. This is a form of credit that enables customers following Islamic principles to make a purchase without the need to take out an interest-bearing loan.
    4. All of the above
  1. Ijara –
    1. This is a leasing agreement whereby the bank buys an item for a customer then leases it back to them over an agreed time period. The bank makes a fair profit by charging rent on the property.
    2. The customer is able to buy the item at the end of the contract.
    3. Both A&B
    4. None
  1. Ijara-wa-Iqtina –
    1. This is a leasing agreement whereby the bank buys an item for a customer then leases it back to them over an agreed time period. The bank makes a fair profit by charging rent on the property.
    2. The customer is able to buy the item at the end of the contract.
    3. Both A&B
    4. None
  1. International growth in Islamic finance has been limited due to:
    1. Relatively higher costs associated with limiting activity to Sharia-compliant activities (which is normally subsidised by states committed to Islamic banking)
    2. The absence of robust regulatory regimes in new markets that would be capable of understanding and monitoring Islamic transactions.
    3. Both A&B
    4. None
  1. With Islamic finance’s ever expanding generally accepted product range, rapid growth and increased maturity the market has been attracting greater interest from the world’s leading financial markets.
    1. True
    2. False

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