Economy Set 1 MCQs

Economy GK

Economy Set 1 MCQs

Practice Economy GK MCQs on basic economic concepts including economy, economics, microeconomics, macroeconomics, goods and services, demand and supply, factors of production, opportunity cost, economic activities, sectors of economy and other fundamental concepts frequently asked in SSC, Railway, Banking, UPSC, JKSSB, JKPSC, Police, Defence and other competitive examinations.

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Page 39 of 111
Question #761
Which of the following is a characteristic of the 'Sustainable Development Goals' framework?
A. Only national goals without global coordination
B. Only economic growth targets
C. A set of interlinked global goals covering economic, social and environmental dimensions of development
D. Only environmental targets without social dimensions
Discuss
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Correct Answer: Option C

Explanation:
The Sustainable Development Goals adopted by the United Nations comprise 17 interlinked goals that integrate economic prosperity, social inclusion and environmental sustainability.
This question belongs to: Economy GK Economy Set 1
Question #762
In the context of monetary policy frameworks, 'Average Inflation Targeting' involves:
A. Ignoring past inflation outcomes completely
B. Targeting only the current inflation rate
C. Targeting an average inflation rate over a multi-year period, allowing temporary overshoots to make up for past undershoots
D. Only targeting the price level
Discuss
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Correct Answer: Option C

Explanation:
Average inflation targeting commits the central bank to achieve an average inflation rate over a longer period, so that periods of below-target inflation are followed by periods of above-target inflation (and vice versa).
This question belongs to: Economy GK Economy Set 1
Question #763
Which of the following is a feature of the 'Climate-Related Financial Risks' discussion in central banking?
A. Climate change is completely irrelevant for financial stability
B. Central banks have no role in assessing climate risks
C. Physical and transition risks associated with climate change can affect the stability of the financial system and the transmission of monetary policy
D. Only physical risks matter and transition risks are irrelevant
Discuss
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Correct Answer: Option C

Explanation:
Climate-related financial risks comprise physical risks (damage from extreme weather) and transition risks (losses from the adjustment to a low-carbon economy); both can impair financial institutions and the broader financial system.
This question belongs to: Economy GK Economy Set 1
Question #764
The concept of 'Green Bonds' refers to:
A. Only conventional government bonds
B. Only high-yield corporate bonds
C. Only short-term money-market instruments
D. Debt instruments whose proceeds are earmarked for environmentally beneficial projects
Discuss
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Correct Answer: Option D

Explanation:
Green bonds are fixed-income securities issued to raise capital specifically for projects that have positive environmental or climate benefits, with proceeds tracked and reported accordingly.
This question belongs to: Economy GK Economy Set 1
Question #765
Which of the following is a characteristic of the 'Circular Economy' concept?
A. Only the maximisation of consumption without regard to waste
B. An economic system aimed at eliminating waste and the continual use of resources through reuse, repair, remanufacturing and recycling
C. Only the maximisation of resource extraction
D. A linear take-make-dispose model
Discuss
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Correct Answer: Option B

Explanation:
The circular economy seeks to keep products, materials and resources in use for as long as possible, extracting maximum value and then recovering and regenerating them at the end of their service life.
This question belongs to: Economy GK Economy Set 1
Question #766
In the context of digital finance, 'Central Bank Digital Currency' (CBDC) refers to:
A. Only commercial-bank deposits
B. Only physical cash
C. Only privately issued cryptocurrencies
D. A digital form of central-bank money that is a direct liability of the central bank
Discuss
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Correct Answer: Option D

Explanation:
A central-bank digital currency is a digital payment instrument denominated in the national unit of account that is a direct liability of the central bank, distinct from both physical cash and commercial-bank deposits.
This question belongs to: Economy GK Economy Set 1
Question #767
Which of the following is a feature of the 'Fintech' revolution in financial services?
A. Only the use of paper-based processes
B. The complete replacement of all traditional banks overnight
C. Only the activities of central banks
D. The use of technology to deliver financial services in new ways, often by non-traditional providers
Discuss
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Correct Answer: Option D

Explanation:
Fintech refers to technological innovation in the design and delivery of financial services, encompassing payments, lending, insurance, wealth management and other activities often provided by new entrants.
This question belongs to: Economy GK Economy Set 1
Question #768
The concept of 'Universal Basic Income' proposes:
A. Only unemployment insurance for the temporarily jobless
B. Only targeted transfers to the poor conditional on work
C. Only in-kind transfers
D. An unconditional cash transfer paid regularly to all individuals regardless of employment status or income
Discuss
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Correct Answer: Option D

Explanation:
Universal basic income is a policy proposal under which every citizen receives a regular, unconditional sum of money from the government, irrespective of other income or employment status.
This question belongs to: Economy GK Economy Set 1
Question #769
Which of the following is a characteristic of the 'Platform Economy'?
A. Digital platforms that intermediate between groups of users and often exhibit strong network effects
B. Only traditional brick-and-mortar retail
C. Only agricultural markets
D. Only government-provided services
Discuss
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Correct Answer: Option A

Explanation:
The platform economy consists of digital multi-sided platforms that facilitate interactions and transactions between different groups of users (e.g., buyers and sellers, drivers and riders) and typically display network externalities.
This question belongs to: Economy GK Economy Set 1
Question #770
In the context of labour markets, the 'Gig Economy' is characterised by:
A. Short-term, flexible jobs often mediated by digital platforms rather than traditional long-term employment contracts
B. Only public-sector jobs
C. Only permanent full-time employment
D. Only agricultural self-employment
Discuss
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Correct Answer: Option A

Explanation:
The gig economy refers to labour markets characterised by short-term contracts or freelance work, frequently organised through online platforms that match workers with individual tasks or projects.
This question belongs to: Economy GK Economy Set 1
Question #771
Which of the following is a feature of the 'Data Economy' or 'Attention Economy'?
A. Only physical goods generate value
B. Economic value is increasingly derived from the collection, analysis and monetisation of data and user attention
C. Only traditional manufacturing matters
D. Data has no economic value
Discuss
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Correct Answer: Option B

Explanation:
In the data and attention economy, the ability to collect, process and monetise large volumes of personal and behavioural data, as well as to capture user attention, has become a central source of economic value.
This question belongs to: Economy GK Economy Set 1
Question #772
The concept of 'Sustainable Finance' encompasses:
A. Only maximising short-term financial returns without regard to externalities
B. Only government budgetary finance
C. Only microfinance in rural areas
D. Financial activities that take environmental, social and governance (ESG) factors into account in investment decisions
Discuss
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Correct Answer: Option D

Explanation:
Sustainable finance refers to the process of taking environmental, social and governance considerations into account when making investment decisions, with the aim of supporting long-term sustainable economic activities.
This question belongs to: Economy GK Economy Set 1
Question #773
Which of the following is a characteristic of the 'Just Transition' framework in climate policy?
A. Only maximising the speed of decarbonisation regardless of social costs
B. Ensuring that the shift to a low-carbon economy is fair and inclusive, protecting workers and communities dependent on carbon-intensive industries
C. Only focusing on technological solutions without social considerations
D. Ignoring the social consequences of climate policies
Discuss
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Correct Answer: Option B

Explanation:
A just transition seeks to ensure that the benefits and costs of the transition to a low-carbon economy are shared equitably and that workers and communities affected by the decline of carbon-intensive sectors receive adequate support.
This question belongs to: Economy GK Economy Set 1
Question #774
In the context of global public goods, climate-change mitigation is considered a:
A. Club good limited to a few countries
B. Global pure public good because its benefits are non-excludable and non-rivalrous across countries
C. Pure private good
D. Common-pool resource only
Discuss
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Correct Answer: Option B

Explanation:
Climate-change mitigation is a global pure public good: the benefits of reduced greenhouse-gas concentrations are non-excludable and non-rivalrous at the worldwide level, creating strong free-rider incentives.
This question belongs to: Economy GK Economy Set 1
Question #775
Which of the following is a feature of the 'Paris Agreement' on climate change?
A. A legally binding set of identical emission targets for all countries
B. Only a voluntary declaration without any reporting requirements
C. A global framework under which countries submit nationally determined contributions to limit global warming
D. A treaty limited to developed countries only
Discuss
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Correct Answer: Option C

Explanation:
The Paris Agreement establishes a framework in which each party submits successive nationally determined contributions (NDCs) outlining its climate actions, with the collective aim of limiting global temperature rise.
This question belongs to: Economy GK Economy Set 1
Question #776
The concept of 'Natural Capital' in environmental economics refers to:
A. Only human skills
B. Only physical capital produced by humans
C. The stock of natural resources and ecosystems that provide goods and services to the economy
D. Only financial capital
Discuss
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Correct Answer: Option C

Explanation:
Natural capital comprises the world’s stocks of natural assets—geology, soil, air, water and all living things—from which humans derive a wide range of ecosystem services.
This question belongs to: Economy GK Economy Set 1
Question #777
Which of the following is a characteristic of the 'Doughnut Economics' framework proposed by Kate Raworth?
A. A model that ignores environmental boundaries
B. A model focused only on maximising GDP growth
C. A model concerned only with financial stability
D. An economic model that aims to meet human needs within the ecological limits of the planet
Discuss
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Correct Answer: Option D

Explanation:
Doughnut economics visualises a safe and just operating space for humanity lying between a social foundation of human well-being and an ecological ceiling of planetary boundaries.
This question belongs to: Economy GK Economy Set 1
Question #778
In the context of measuring economic progress, the 'Genuine Progress Indicator' attempts to:
A. Adjust GDP by subtracting environmental and social costs and adding non-market benefits
B. Replace GDP with only environmental indicators
C. Measure only market production
D. Ignore all non-market activities
Discuss
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Correct Answer: Option A

Explanation:
The Genuine Progress Indicator starts from personal consumption expenditure and then adjusts for factors such as income distribution, environmental degradation, and the value of unpaid work to provide a broader measure of welfare.
This question belongs to: Economy GK Economy Set 1
Question #779
Which of the following is a feature of the 'Beyond GDP' movement?
A. The rejection of all economic statistics
B. The complete abandonment of any quantitative indicators
C. The search for broader indicators of well-being and sustainability that complement or go beyond GDP
D. The exclusive focus on GDP growth
Discuss
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Correct Answer: Option C

Explanation:
The Beyond GDP agenda seeks to develop and use a wider set of indicators—covering health, education, environment, inequality and subjective well-being—to provide a more comprehensive picture of societal progress.
This question belongs to: Economy GK Economy Set 1
Question #780
The concept of 'Planetary Boundaries' identifies:
A. Only national environmental regulations
B. Nine biophysical thresholds that, if crossed, could destabilise the Earth system
C. Only economic growth limits
D. Only population limits
Discuss
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Correct Answer: Option B

Explanation:
The planetary-boundaries framework, developed by Rockström and colleagues, defines a set of nine Earth-system processes and associated quantitative boundaries within which humanity can operate safely.
This question belongs to: Economy GK Economy Set 1
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