In the context of demand analysis, the Engel Curve shows the relationship between: MCQ with Answer and Explanation

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In the context of demand analysis, the Engel Curve shows the relationship between:

A. Cost and output

B. Price and quantity demanded

C. Price and supply

D. Income and quantity demanded

Answer: Option D

Solution (By JKSSB Mock Tests)

The Engel Curve illustrates how the quantity demanded of a good changes as consumer income changes, holding prices constant.

This question belongs to: Economy GK Economy Set 1

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Question #1

The IS curve shows combinations of income and interest rate where:

A. money market is in equilibrium

B. goods market is in equilibrium

C. labour market is in equilibrium

D. foreign exchange market is in equilibrium

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Correct Answer: Option B

Explanation:
The IS curve shows equilibrium in the goods market.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Goods and Services Tax Compensation Cess' is levied to compensate states for:

A. loss due to bank failures

B. loss due to natural calamities

C. loss of import revenue

D. loss of revenue due to GST implementation for a transition period

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Correct Answer: Option D

Explanation:
GST Compensation Cess compensates states for revenue loss due to GST implementation for five years.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the 'Availability Heuristic'?

A. People always use base rates correctly

B. Only statistical frequencies matter

C. People assess the probability of an event by the ease with which instances come to mind

D. Memory has no effect on probability judgments

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Correct Answer: Option C

Explanation:
The availability heuristic leads people to judge the likelihood of events by how readily examples can be recalled, which can produce systematic biases when memory is distorted by vividness or recency.

This question belongs to: Economy GK Economy Set 1

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