In the context of development economics, the 'Kuznets Curve' suggests that: MCQ with Answer and Explanation

In the context of development economics, the 'Kuznets Curve' suggests that:
A. Inequality is unrelated to the level of development
B. Inequality first rises and then falls with economic development
C. Inequality rises continuously with development
D. Inequality falls continuously with development
Answer: Option B
Solution (By JKSSB Mock Tests)
The Kuznets hypothesis proposes an inverted-U relationship between income inequality and per capita income: inequality rises in the early stages of development and declines later.

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Practice More Economy Set 1 Questions

Question #1
The 'gender budgeting' in India refers to:
A. budget for defence
B. analysis of budget allocations from a gender perspective
C. budget for women only
D. tax on women

Correct Answer: Option B


Explanation:
Gender budgeting involves analyzing government budgets for their impact on women and girls.

This question belongs to: Economy GK Economy Set 1
Question #2
In the context of monetary policy transmission, the 'Credit Channel' emphasises:
A. Only exchange-rate effects
B. Only the interest-rate effects on investment
C. Only wealth effects on consumption
D. The effects of monetary policy on the supply of bank loans and external finance premia

Correct Answer: Option D


Explanation:
The credit channel (or financial-accelerator mechanism) stresses that monetary policy affects real activity not only through interest rates but also through changes in the availability and cost of external finance for borrowers.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'Goods and Services Tax' on renting of commercial property is:
A. 5%
B. 12%
C. 28%
D. 18%

Correct Answer: Option D


Explanation:
Renting of commercial property attracts 18% GST.

This question belongs to: Economy GK Economy Set 1