Deflation is best defined as: MCQ with Answer and Explanation

Deflation is best defined as:
A. a decrease in the rate of inflation
B. a rise in unemployment
C. a sustained fall in the general price level
D. a fall in GDP
Answer: Option C
Solution (By JKSSB Mock Tests)
Deflation is a sustained fall in the general price level.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is a characteristic of the 'Sudden Stop' literature?
A. Capital-flow reversals are always gradual and benign
B. Abrupt reversals of capital inflows can cause large real depreciations, output collapses and financial crises
C. Only trade shocks matter
D. Capital flows never reverse

Correct Answer: Option B


Explanation:
Sudden-stop models analyse the macroeconomic and financial consequences of large and abrupt reversals in capital inflows, which often trigger currency crises, credit contractions and sharp recessions.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'TReDS' platform is meant for:
A. foreign exchange trading
B. commodity futures
C. financing of receivables of MSMEs
D. trading government securities

Correct Answer: Option C


Explanation:
TReDS is an electronic platform for financing trade receivables of MSMEs from corporate buyers.

This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is a characteristic of the 'Green New Deal' type of policy proposals?
A. Large-scale public investment programmes aimed at simultaneously addressing climate change, economic inequality and job creation
B. Only austerity measures
C. Only voluntary private-sector initiatives
D. Only market-based carbon pricing without public investment

Correct Answer: Option A


Explanation:
Green New Deal proposals typically combine ambitious climate targets with large public investment in clean energy and infrastructure, together with social policies intended to ensure a just transition.

This question belongs to: Economy GK Economy Set 1