Excess capacity is a characteristic feature of which market structure? MCQ with Answer and Explanation

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Excess capacity is a characteristic feature of which market structure?

A. Perfect competition

B. Pure competition

C. Monopolistic competition

D. Monopoly

Answer: Option C

Solution (By JKSSB Mock Tests)

Firms in monopolistic competition produce below optimum capacity, leading to excess capacity.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a feature of the 'Impossible Trinity' in open economy macroeconomics?

A. A country can achieve only two of the three: fixed exchange rate, free capital flows and monetary independence

B. Only fiscal policy is constrained

C. All three objectives are always compatible

D. A country can simultaneously maintain a fixed exchange rate, free capital mobility and independent monetary policy

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Correct Answer: Option A

Explanation:
The impossible trinity (or trilemma) states that it is impossible for a country to maintain a fixed exchange rate, free capital mobility and an independent monetary policy at the same time.

This question belongs to: Economy GK Economy Set 1

Question #2

The term 'Base Money' or 'Reserve Money' consists of:

A. Only currency with the public

B. Only demand deposits

C. Only time deposits of banks

D. Currency in circulation plus bankers' deposits with RBI and other deposits

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Correct Answer: Option D

Explanation:
Reserve money (monetary base) includes currency in circulation, bankers' deposits with the RBI and other deposits with the RBI.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Human Capital Index' is published by:

A. UNESCO

B. World Bank

C. UNDP

D. IMF

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Correct Answer: Option B

Explanation:
The Human Capital Index is published by the World Bank.

This question belongs to: Economy GK Economy Set 1

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