If MPC is 0.8, the investment multiplier is: MCQ with Answer and Explanation

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If MPC is 0.8, the investment multiplier is:

A. 8

B. 1.25

C. 5

D. 0.8

Answer: Option C

Solution (By JKSSB Mock Tests)

Multiplier = 1/(1 - 0.8) = 1/0.2 = 5.

This question belongs to: Economy GK Economy Set 1

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Question #1

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The term 'core inflation' was coined because it excludes items with:

A. high tax rates

B. high weight in CPI

C. high import content

D. high price volatility such as food and fuel

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Correct Answer: Option D

Explanation:
Core inflation excludes volatile food and fuel prices to reveal underlying inflation.

This question belongs to: Economy GK Economy Set 1

Question #2

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The 'repo rate' in India is the rate at which RBI lends to banks for:

A. long-term capital

B. unsecured overnight loans

C. foreign exchange

D. short-term funds against government securities

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Correct Answer: Option D

Explanation:
Repo rate is the rate at which RBI lends short-term funds to banks against government securities.

This question belongs to: Economy GK Economy Set 1

Question #3

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Make in India initiative was launched in which year?

A. 2016

B. 2014

C. 2012

D. 2018

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Correct Answer: Option B

Explanation:
Make in India was launched in September 2014 to promote manufacturing.

This question belongs to: Economy GK Economy Set 1

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