Currency with the public plus demand deposits is called: MCQ with Answer and Explanation

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Currency with the public plus demand deposits is called:

A. narrow money

B. broad money

C. reserve money

D. high-powered money

Answer: Option A

Solution (By JKSSB Mock Tests)

Currency with the public plus demand deposits is narrow money, M1.

This question belongs to: Economy GK Economy Set 1

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Question #1

The term 'Special Drawing Rights' can be used by member countries of the IMF for:

A. Settling international payments and as a reserve asset

B. Only purchasing gold

C. Only domestic transactions

D. Only financing fiscal deficit

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Correct Answer: Option A

Explanation:
SDRs are international reserve assets that can be exchanged for freely usable currencies and used in transactions among IMF members and prescribed holders.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of monetary economics, the 'Velocity of Circulation of Money' refers to:

A. The growth rate of the money supply

B. The rate of inflation only

C. The rate of interest

D. The average number of times a unit of money is used to purchase final goods and services in a given period

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Correct Answer: Option D

Explanation:
Velocity of money measures how frequently the average unit of currency is spent on final goods and services during a given time period; it appears in the equation of exchange.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Goods and Services Tax' on yachts and aircraft is:

A. 18%

B. 28% plus cess

C. 5%

D. 12%

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Correct Answer: Option B

Explanation:
Yachts and aircraft attract 28% GST plus cess.

This question belongs to: Economy GK Economy Set 1

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