A deflationary gap exists when: MCQ with Answer and Explanation

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A deflationary gap exists when:

A. aggregate demand exceeds full employment output

B. aggregate demand is less than full employment output

C. the economy is above full employment

D. prices rise rapidly

Answer: Option B

Solution (By JKSSB Mock Tests)

A deflationary gap occurs when aggregate demand is below the level needed for full employment output.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'United Nations Educational, Scientific and Cultural Organization' is headquartered in:

A. New York

B. Rome

C. Geneva

D. Paris

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Correct Answer: Option D

Explanation:
UNESCO is headquartered in Paris.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Imperial Bank of India' was created in 1921 by merging three presidency banks: Bank of Bengal, Bank of Bombay and:

A. Punjab National Bank

B. Bank of Calcutta

C. Allahabad Bank

D. Bank of Madras

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Correct Answer: Option D

Explanation:
The Imperial Bank of India was formed by merging Bank of Bengal, Bank of Bombay and Bank of Madras.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Goods and Services Tax' on metro rail travel is:

A. 18%

B. 12%

C. 0%

D. 5%

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Correct Answer: Option D

Explanation:
Metro rail travel attracts 5% GST.

This question belongs to: Economy GK Economy Set 1

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