Effective Revenue Deficit is defined as revenue deficit minus: MCQ with Answer and Explanation

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Effective Revenue Deficit is defined as revenue deficit minus:

A. non-tax revenue

B. grants for creation of capital assets

C. tax revenue

D. interest payments

Answer: Option B

Solution (By JKSSB Mock Tests)

Effective Revenue Deficit is revenue deficit minus grants for creation of capital assets.

This question belongs to: Economy GK Economy Set 1

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Question #1

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Which of the following is a feature of the 'Fear of Floating' phenomenon identified by Calvo and Reinhart?

A. All countries freely float without intervention

B. Only advanced economies fear floating

C. Many emerging-market countries that claim to float actually intervene heavily to limit exchange-rate volatility

D. Floating is always preferred to pegging

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Correct Answer: Option C

Explanation:
Fear of floating describes the empirical regularity that many countries officially classified as floaters in fact intervene frequently and allow only limited exchange-rate variability, often because of balance-sheet vulnerabilities.

This question belongs to: Economy GK Economy Set 1

Question #2

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If the price elasticity of demand for a good is exactly 1, an increase in its price will:

A. leave total revenue unchanged

B. decrease total revenue

C. increase total revenue

D. eliminate all demand

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Correct Answer: Option A

Explanation:
Unitary elastic demand means total expenditure remains constant when price changes.

This question belongs to: Economy GK Economy Set 1

Question #3

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The 'Goods and Services Tax' rate on footwear above Rs 1,000 is:

A. 12%

B. 5%

C. 28%

D. 18%

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Correct Answer: Option D

Explanation:
Footwear above Rs 1,000 attracts 18% GST.

This question belongs to: Economy GK Economy Set 1

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