Hyperinflation is characterized by: MCQ with Answer and Explanation

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Hyperinflation is characterized by:

A. slow price rise

B. stable prices

C. extremely rapid and out-of-control rise in prices

D. falling prices

Answer: Option C

Solution (By JKSSB Mock Tests)

Hyperinflation is extremely rapid and uncontrollable price inflation.

This question belongs to: Economy GK Economy Set 1

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Question #1

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In the context of development economics, the 'Big Push' theory emphasises:

A. Only agricultural investment

B. Complete reliance on market forces without coordination

C. The need for a coordinated large-scale investment to overcome complementarities and indivisibilities

D. Gradual and small investments in all sectors

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Correct Answer: Option C

Explanation:
The Big Push argument, associated with Rosenstein-Rodan, stresses that simultaneous large investments in many sectors may be necessary to make industrialisation profitable when demand complementarities and infrastructure indivisibilities exist.

This question belongs to: Economy GK Economy Set 1

Question #2

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A deflationary gap exists when:

A. aggregate demand is less than full employment output

B. the economy is above full employment

C. aggregate demand exceeds full employment output

D. prices rise rapidly

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Correct Answer: Option A

Explanation:
A deflationary gap occurs when aggregate demand is below the level needed for full employment output.

This question belongs to: Economy GK Economy Set 1

Question #3

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Which of the following is a feature of a perfectly competitive market?

A. Product differentiation exists

B. Firms are price takers

C. Firms are price makers

D. Barriers to entry exist

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Correct Answer: Option B

Explanation:
In perfect competition, individual firms are price takers because the market price is determined by industry demand and supply, and no single firm can influence it.

This question belongs to: Economy GK Economy Set 1

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