A price floor set above the equilibrium price generally creates: MCQ with Answer and Explanation

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A price floor set above the equilibrium price generally creates:

A. increase in demand

B. surplus

C. no change

D. shortage

Answer: Option B

Solution (By JKSSB Mock Tests)

A price floor above equilibrium creates excess supply or a surplus.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'GDP deflator' is a price index that measures:

A. only wholesale prices

B. prices of all domestically produced final goods and services

C. only food prices

D. only consumer prices

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Correct Answer: Option B

Explanation:
GDP deflator measures the average price of all final goods and services produced domestically.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Goods and Services Tax' on carbonated water is:

A. 12%

B. 5%

C. 28% plus cess

D. 18%

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Correct Answer: Option C

Explanation:
Carbonated water and aerated drinks attract 28% GST plus cess.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is the formula for calculating fiscal deficit?

A. Total expenditure − Total receipts including borrowings

B. Revenue expenditure − Revenue receipts

C. Total expenditure − Total receipts excluding borrowings

D. Capital expenditure − Capital receipts

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Correct Answer: Option C

Explanation:
Fiscal deficit = Total expenditure − (Revenue receipts + Non-debt capital receipts). It indicates the total borrowing requirement of the government.

This question belongs to: Economy GK Economy Set 1

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