For a normal good, a fall in its price creates: MCQ with Answer and Explanation

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For a normal good, a fall in its price creates:

A. negative substitution effect

B. positive substitution effect and positive income effect

C. negative income effect only

D. zero income effect

Answer: Option B

Solution (By JKSSB Mock Tests)

For a normal good, both substitution effect and income effect work in the same direction when price falls, increasing quantity demanded.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'child sex ratio' in the Indian census is defined as the number of girls per how many boys in the age group 0-6?

A. 100

B. 10,000

C. 1,000

D. 100,000

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Correct Answer: Option C

Explanation:
Child sex ratio is expressed as girls per 1,000 boys in the 0-6 age group.

This question belongs to: Economy GK Economy Set 1

Question #2

The concept of 'Opportunity Cost' is central to which branch of economics?

A. Both micro and macroeconomics

B. Only microeconomics

C. Only international economics

D. Only macroeconomics

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Correct Answer: Option A

Explanation:
Opportunity cost is a fundamental concept used in both microeconomics (individual choice) and macroeconomics (resource allocation at national level).

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the Indian planning process after 2015?

A. Complete abandonment of any form of planning

B. Replacement of Planning Commission by NITI Aayog with a focus on cooperative federalism

C. Continuation of Five Year Plans by Planning Commission

D. Only centralised planning without state participation

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Correct Answer: Option B

Explanation:
In 2015, the Planning Commission was replaced by NITI Aayog, which promotes cooperative federalism, provides strategic and technical advice, and does not impose centralised Five Year Plans in the earlier form.

This question belongs to: Economy GK Economy Set 1

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