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 59 of 111
Question #1161
The 'bandwagon effect' in consumer behaviour refers to:
A. buying goods because others are buying them
B. buying only inferior goods
C. buying goods to be different
D. buying fewer goods when prices fall
Discuss
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Correct Answer: Option A

Explanation:
The bandwagon effect occurs when consumers buy more of a good because others are buying it.
This question belongs to: Economy GK Economy Set 1
Question #1162
The 'demonstration effect' in consumption means:
A. people copy the consumption patterns of others
B. people reduce consumption
C. people consume only basic goods
D. people save more
Discuss
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Correct Answer: Option A

Explanation:
The demonstration effect is the tendency to imitate the consumption patterns of others.
This question belongs to: Economy GK Economy Set 1
Question #1163
The 'Pareto optimum' is a situation where:
A. no one can be made better off without making someone else worse off
B. prices are zero
C. total output is maximum
D. everyone has equal income
Discuss
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Correct Answer: Option A

Explanation:
Pareto optimum is a state where no one can be better off without making someone worse off.
This question belongs to: Economy GK Economy Set 1
Question #1164
A 'public good' is characterized by:
A. excludability and rivalry
B. excludability and non-rivalry
C. non-excludability and rivalry
D. non-excludability and non-rivalry
Discuss
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Correct Answer: Option D

Explanation:
Public goods are non-excludable and non-rivalrous.
This question belongs to: Economy GK Economy Set 1
Question #1165
A 'merit good' is a good that:
A. is consumed voluntarily
B. is only for the rich
C. the government encourages or provides because it has positive externalities and is under-consumed
D. has negative externalities
Discuss
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Correct Answer: Option C

Explanation:
Merit goods are under-consumed if left to the market, so government encourages their provision.
This question belongs to: Economy GK Economy Set 1
Question #1166
The 'tragedy of the commons' refers to:
A. overuse of common property resources
B. market success
C. government failure
D. underuse of private property
Discuss
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Correct Answer: Option A

Explanation:
The tragedy of the commons is the overuse and depletion of common property resources.
This question belongs to: Economy GK Economy Set 1
Question #1167
The 'Pigou effect' suggests that falling prices:
A. reduce real wealth
B. reduce money supply
C. increase unemployment
D. increase real wealth and consumption
Discuss
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Correct Answer: Option D

Explanation:
The Pigou effect states that lower prices raise real wealth and stimulate consumption.
This question belongs to: Economy GK Economy Set 1
Question #1168
The 'Ricardo equivalence' proposition states that:
A. taxes have no effect
B. government spending is always contractionary
C. government borrowing is always expansionary
D. deficit-financed spending does not affect aggregate demand if households anticipate future taxes
Discuss
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Correct Answer: Option D

Explanation:
Ricardian equivalence argues that public borrowing is offset by higher private saving in anticipation of future taxes.
This question belongs to: Economy GK Economy Set 1
Question #1169
The 'Lorenz curve' is a graph showing:
A. GDP growth
B. income distribution
C. inflation over time
D. unemployment
Discuss
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Correct Answer: Option B

Explanation:
The Lorenz curve graphically represents the distribution of income or wealth.
This question belongs to: Economy GK Economy Set 1
Question #1170
The 'Kuznets curve' hypothesizes that income inequality:
A. first rises then falls with economic development
B. falls continuously with growth
C. is unrelated to growth
D. rises continuously with growth
Discuss
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Correct Answer: Option A

Explanation:
The Kuznets curve suggests inequality first increases and later decreases as an economy develops.
This question belongs to: Economy GK Economy Set 1
Question #1171
The 'Human Development Index' includes indicators of:
A. only income
B. income, environment and defence
C. only education and health
D. income, education and health
Discuss
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Correct Answer: Option D

Explanation:
HDI combines per capita income, education and life expectancy indicators.
This question belongs to: Economy GK Economy Set 1
Question #1172
The 'Global Gender Gap Report' is published by:
A. World Bank
B. UN Women
C. World Economic Forum
D. UNDP
Discuss
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Correct Answer: Option C

Explanation:
The Global Gender Gap Report is published by the World Economic Forum.
This question belongs to: Economy GK Economy Set 1
Question #1173
The 'Ease of Doing Business Report' was published by:
A. UNCTAD
B. IMF
C. WTO
D. World Bank
Discuss
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Correct Answer: Option D

Explanation:
The Ease of Doing Business Report was published by the World Bank.
This question belongs to: Economy GK Economy Set 1
Question #1174
The 'World Development Report' is published by:
A. UNCTAD
B. WTO
C. World Bank
D. IMF
Discuss
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Correct Answer: Option C

Explanation:
The World Development Report is published by the World Bank.
This question belongs to: Economy GK Economy Set 1
Question #1175
The 'World Economic Outlook' is published by:
A. UNCTAD
B. IMF
C. World Bank
D. OECD
Discuss
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Correct Answer: Option B

Explanation:
The World Economic Outlook is published by the IMF.
This question belongs to: Economy GK Economy Set 1
Question #1176
The 'Asian Development Bank' was established in which year?
A. 1971
B. 1944
C. 1995
D. 1966
Discuss
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Correct Answer: Option D

Explanation:
The Asian Development Bank was established in 1966.
This question belongs to: Economy GK Economy Set 1
Question #1177
The 'New Development Bank' established by BRICS countries is headquartered in:
A. Moscow
B. New Delhi
C. Shanghai
D. Beijing
Discuss
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Correct Answer: Option C

Explanation:
The New Development Bank is headquartered in Shanghai, China.
This question belongs to: Economy GK Economy Set 1
Question #1178
The 'Asian Infrastructure Investment Bank' is headquartered in:
A. Manila
B. Tokyo
C. Singapore
D. Beijing
Discuss
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Correct Answer: Option D

Explanation:
The Asian Infrastructure Investment Bank is headquartered in Beijing.
This question belongs to: Economy GK Economy Set 1
Question #1179
The 'Belt and Road Initiative' is associated with which country?
A. China
B. Japan
C. India
D. United States
Discuss
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Correct Answer: Option A

Explanation:
The Belt and Road Initiative is a Chinese infrastructure and trade connectivity project.
This question belongs to: Economy GK Economy Set 1
Question #1180
The 'Regional Comprehensive Economic Partnership' is a free trade agreement involving countries of:
A. European Union
B. Africa only
C. Asia-Pacific, including ASEAN and major partners
D. South America
Discuss
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Correct Answer: Option C

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
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