In an open economy, aggregate demand is given by: MCQ with Answer and Explanation

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In an open economy, aggregate demand is given by:

A. I + G + M

B. C + S + T

C. C + I - G

D. C + I + G + (X - M)

Answer: Option D

Solution (By JKSSB Mock Tests)

In an open economy, aggregate demand is C + I + G + (X - M).

This question belongs to: Economy GK Economy Set 1

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Question #1

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The first Narasimham Committee of 1991 was appointed to recommend reforms in:

A. capital markets only

B. indirect taxes

C. the financial system and banking sector

D. agricultural pricing

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Correct Answer: Option C

Explanation:
The Narasimham Committee was appointed to recommend financial system and banking sector reforms.

This question belongs to: Economy GK Economy Set 1

Question #2

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The 'Goods and Services Tax' on audit services is:

A. 12%

B. 28%

C. 18%

D. 5%

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Correct Answer: Option C

Explanation:
Audit services attract 18% GST.

This question belongs to: Economy GK Economy Set 1

Question #3

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In the context of measuring inequality, the 'Palma Ratio' is defined as:

A. The Gini coefficient multiplied by 100

B. The share of the middle 50 per cent only

C. The ratio of the income share of the top 10 per cent to that of the bottom 40 per cent

D. The ratio of the top 1 per cent to the bottom 1 per cent

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Correct Answer: Option C

Explanation:
The Palma ratio is the ratio of the income share of the richest 10 per cent of the population to that of the poorest 40 per cent; it focuses on the tails of the distribution that account for most inequality.

This question belongs to: Economy GK Economy Set 1

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