Crowding out occurs when: MCQ with Answer and Explanation

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Crowding out occurs when:

A. government expenditure increases private investment

B. taxes are reduced

C. private investment reduces government spending

D. government borrowing reduces private investment

Answer: Option D

Solution (By JKSSB Mock Tests)

Crowding out occurs when increased government borrowing raises interest rates and reduces private investment.

This question belongs to: Economy GK Economy Set 1

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Question #1

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The 'Goods and Services Tax' rate on cement is:

A. 12%

B. 18%

C. 28%

D. 5%

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Correct Answer: Option C

Explanation:
Cement attracts 28% GST.

This question belongs to: Economy GK Economy Set 1

Question #2

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The 'Wholesale Price Index' in India is released by:

A. Labour Bureau

B. NSO

C. Office of Economic Adviser, Ministry of Commerce and Industry

D. RBI

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Correct Answer: Option C

Explanation:
WPI is released by the Office of Economic Adviser.

This question belongs to: Economy GK Economy Set 1

Question #3

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In the context of project appraisal, a project is considered economically viable if:

A. Only financial costs are considered

B. The present value of costs exceeds the present value of benefits

C. The present value of benefits exceeds the present value of costs

D. Social costs are ignored

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Correct Answer: Option C

Explanation:
In cost-benefit analysis, a project is viable when the discounted present value of its benefits exceeds the discounted present value of its costs (positive net present value).

This question belongs to: Economy GK Economy Set 1

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