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 only for the rich

B. has negative externalities

C. is consumed voluntarily

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

Answer: Option D

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 'Goods and Services Tax' on services by diplomatic missions is:

A. 18%

B. 0%

C. exempt

D. 5%

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Correct Answer: Option C

Explanation:
Services by diplomatic missions are exempt from GST.

This question belongs to: Economy GK Economy Set 1

Question #2

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Which of the following is a feature of the 'New Classical' school of macroeconomics?

A. Importance of fiscal policy for stabilisation

B. Rational expectations and continuous market clearing

C. Emphasis on sticky wages and prices

D. Liquidity trap as a central concept

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Correct Answer: Option B

Explanation:
New Classical economics assumes rational expectations and continuous market clearing, implying that systematic monetary policy cannot systematically affect real output.

This question belongs to: Economy GK Economy Set 1

Question #3

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The 'State Bank of India' was nationalized in which year?

A. 1955

B. 1969

C. 1949

D. 1980

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Correct Answer: Option A

Explanation:
The State Bank of India was nationalized in 1955.

This question belongs to: Economy GK Economy Set 1

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