Cyclical unemployment is caused by: MCQ with Answer and Explanation

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Cyclical unemployment is caused by:

A. seasonal changes

B. mismatch of skills

C. lack of aggregate demand during economic downturns

D. trade union pressure

Answer: Option C

Solution (By JKSSB Mock Tests)

Cyclical unemployment is caused by deficient aggregate demand during recessions.

This question belongs to: Economy GK Economy Set 1

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Question #1

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The 'Regional Comprehensive Economic Partnership' is a free trade agreement involving countries of:

A. European Union

B. Asia-Pacific, including ASEAN and major partners

C. South America

D. Africa only

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Correct Answer: Option B

Explanation:
RCEP is a free trade agreement among Asia-Pacific countries including ASEAN, China, Japan, South Korea, Australia and New Zealand.

This question belongs to: Economy GK Economy Set 1

Question #2

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Public-Private Partnership refers to:

A. nationalization of private firms

B. complete private ownership of public assets

C. merger of public sector banks

D. collaboration between government and private sector for infrastructure or service delivery

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Correct Answer: Option D

Explanation:
PPP is a collaboration between government and private sector for infrastructure or public service delivery.

This question belongs to: Economy GK Economy Set 1

Question #3

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Which of the following is a characteristic of the 'Calibration' approach in quantitative macroeconomics?

A. Parameters are chosen so that the model matches selected long-run averages or moments of the data

B. No attention is paid to empirical moments

C. Only theoretical consistency matters

D. Parameters are estimated only by maximum likelihood

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Correct Answer: Option A

Explanation:
In the calibration methodology associated with real-business-cycle and dynamic stochastic general-equilibrium models, key parameters are set so that the model reproduces selected long-run averages or other empirical moments.

This question belongs to: Economy GK Economy Set 1

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