A 'merit good' is a good that: MCQ with Answer and Explanation

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A 'merit good' is a good that:

A. is consumed voluntarily

B. is only for the rich

C. the government encourages or provides because it has positive externalities and is under-consumed

D. has negative externalities

Answer: Option C

Solution (By JKSSB Mock Tests)

Merit goods are under-consumed if left to the market, so government encourages their provision.

This question belongs to: Economy GK Economy Set 1

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Question #1

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The concept of 'Too Big to Fail' in banking refers to:

A. Only the size of non-bank firms

B. The expectation that systemically important banks will receive government support in the event of distress

C. The absence of any systemic risk

D. The legal requirement that all banks must be small

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Correct Answer: Option B

Explanation:
Too-big-to-fail refers to the market perception or policy practice that certain large and interconnected financial institutions will be rescued by the authorities because their failure would impose systemic costs.

This question belongs to: Economy GK Economy Set 1

Question #2

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The 'forward market' in foreign exchange deals with:

A. only government transactions

B. immediate delivery of currencies

C. only spot transactions

D. delivery of currencies at a future date at a predetermined rate

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Correct Answer: Option D

Explanation:
The forward market deals with contracts for future delivery of currencies at predetermined rates.

This question belongs to: Economy GK Economy Set 1

Question #3

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The 'Yojana Aayog' is the Hindi name for:

A. Planning Commission

B. NITI Aayog

C. Finance Commission

D. GST Council

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Correct Answer: Option A

Explanation:
The Planning Commission was known as Yojana Aayog in Hindi.

This question belongs to: Economy GK Economy Set 1

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