Deadweight loss in economics refers to: MCQ with Answer and Explanation

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Deadweight loss in economics refers to:

A. loss of total welfare due to market inefficiency

B. loss of revenue to the government

C. loss suffered by a monopolist

D. depreciation of capital

Answer: Option A

Solution (By JKSSB Mock Tests)

Deadweight loss is the loss of economic welfare due to inefficiency such as taxes, price controls or monopoly.

This question belongs to: Economy GK Economy Set 1

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Question #1

The term 'Non-Performing Asset' in Indian banking is defined as a loan where:

A. The borrower has excess collateral

B. Interest or principal is overdue for more than 90 days

C. The asset generates continuous income

D. Interest is paid regularly

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Correct Answer: Option B

Explanation:
As per RBI guidelines, a term loan is classified as NPA if interest or instalment of principal remains overdue for a period of more than 90 days.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a measure of relative poverty?

A. Income share of the bottom quintile relative to the top

B. Poverty line based on minimum calorie intake

C. Percentage of population below a fixed income threshold

D. Absolute number of poor people

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Correct Answer: Option A

Explanation:
Relative poverty is measured in relation to the overall distribution of income in society, such as the income share of the poorest relative to the richest.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the Indian capital account?

A. Only current account convertibility without any capital flows

B. Complete ban on capital inflows

C. Complete convertibility for all capital transactions

D. Partial convertibility with controls on certain capital flows

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Correct Answer: Option D

Explanation:
India has achieved current account convertibility but maintains a managed and partial capital account convertibility with prudential controls on certain flows.

This question belongs to: Economy GK Economy Set 1

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