A Giffen good is a good for which: MCQ with Answer and Explanation

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A Giffen good is a good for which:

A. demand increases when price rises

B. demand falls when price falls

C. demand is perfectly elastic

D. income effect is zero

Answer: Option A

Solution (By JKSSB Mock Tests)

A Giffen good has a strong income effect that dominates the substitution effect, so quantity demanded rises when price rises.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'Kisan Vikas Patra' is a:

A. stock market instrument

B. small savings certificate scheme

C. crop insurance scheme

D. bank account

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Correct Answer: Option B

Explanation:
Kisan Vikas Patra is a small savings certificate scheme.

This question belongs to: Economy GK Economy Set 1

Question #2

The liquidity trap is a situation where:

A. interest rates are very low and speculative money demand becomes perfectly elastic

B. investment is very high

C. money supply is zero

D. interest rates are very high

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Correct Answer: Option A

Explanation:
In a liquidity trap, interest rates are so low that people hold any amount of money, making speculative money demand perfectly elastic.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Pradhan Mantri Krishi Sinchai Yojana' aims at:

A. promoting exports

B. crop insurance

C. providing tractors

D. improving irrigation and water-use efficiency

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Correct Answer: Option D

Explanation:
PMKSY aims to improve irrigation coverage and water-use efficiency.

This question belongs to: Economy GK Economy Set 1

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