Balance of Trade refers to the difference between: MCQ with Answer and Explanation

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Balance of Trade refers to the difference between:

A. capital inflows and outflows

B. foreign exchange reserves and gold

C. exports and imports of goods only

D. exports and imports of goods and services

Answer: Option C

Solution (By JKSSB Mock Tests)

Balance of Trade is the difference between a country's exports and imports of goods only.

This question belongs to: Economy GK Economy Set 1

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Question #1

In the context of demand theory, the law of demand may not hold for:

A. All inferior goods without exception

B. Giffen goods and Veblen goods

C. Necessary goods with elastic demand

D. Normal goods

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Correct Answer: Option B

Explanation:
Giffen goods (strong negative income effect) and Veblen goods (prestige value rising with price) are exceptions to the law of demand.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is NOT a type of unemployment recognised in economics?

A. Nominal unemployment

B. Frictional unemployment

C. Cyclical unemployment

D. Structural unemployment

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Correct Answer: Option A

Explanation:
The main types of unemployment are frictional, structural, cyclical and seasonal. 'Nominal unemployment' is not a standard classification.

This question belongs to: Economy GK Economy Set 1

Question #3

Total utility is maximum when marginal utility is:

A. equal to average utility

B. zero

C. negative

D. maximum

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Correct Answer: Option B

Explanation:
Total utility reaches its maximum when marginal utility is zero; beyond this point, marginal utility becomes negative and total utility falls.

This question belongs to: Economy GK Economy Set 1

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