In the context of demand theory, the law of demand states that, ceteris paribus: MCQ with Answer and Explanation

In the context of demand theory, the law of demand states that, ceteris paribus:
A. Price and quantity demanded are positively related
B. Price and quantity demanded are inversely related
C. Income and quantity demanded are inversely related
D. Price and supply are inversely related
Answer: Option B
Solution (By JKSSB Mock Tests)
The law of demand states that, other things remaining constant, the quantity demanded of a commodity falls when its price rises and rises when its price falls, indicating an inverse relationship between price and quantity demanded.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is a feature of a mixed economy?
A. Coexistence of public and private sectors
B. Complete private ownership of resources
C. Absence of government intervention
D. Complete government ownership of resources

Correct Answer: Option A


Explanation:
A mixed economy is characterised by the coexistence of both public and private sectors, with government intervention to correct market failures.

This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is a major source of non-tax revenue for the Government of India?
A. Interest receipts and dividends from PSUs
B. Customs duty
C. Personal income tax
D. Corporation tax

Correct Answer: Option A


Explanation:
Interest receipts on loans given by the government and dividends/profits from public sector enterprises are important components of non-tax revenue.

This question belongs to: Economy GK Economy Set 1
Question #3
In the context of economic reforms in India, the New Economic Policy of 1991 emphasised:
A. Licence-permit-quota raj
B. Import substitution only
C. Complete isolation from the world economy
D. Liberalisation, privatisation and globalisation

Correct Answer: Option D


Explanation:
The 1991 economic reforms focused on Liberalisation, Privatisation and Globalisation (LPG) to open up the economy, reduce government control and integrate with the global economy.

This question belongs to: Economy GK Economy Set 1