In the context of economic reforms, 'Disinvestment' involves: MCQ with Answer and Explanation

In the context of economic reforms, 'Disinvestment' involves:
A. Nationalisation of private firms
B. Complete closure of all public enterprises
C. Sale of government equity in public sector enterprises
D. Increasing government stake in public sector enterprises
Answer: Option C
Solution (By JKSSB Mock Tests)
Disinvestment refers to the sale of government-held shares in public sector enterprises to private investors or the public, thereby reducing the government's ownership stake.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is a component of the current account of the balance of payments?
A. Foreign direct investment
B. Portfolio investment
C. External commercial borrowings
D. Trade in goods and services

Correct Answer: Option D


Explanation:
The current account includes merchandise trade, trade in services, primary income and secondary income (transfers). FDI, portfolio investment and ECBs are capital account items.

This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is a characteristic of 'Libertarian Paternalism'?
A. The design of policies that steer people toward better choices while preserving freedom of choice
B. The use of mandates that eliminate choice
C. Only laissez-faire without any guidance
D. The complete rejection of any paternalistic intervention

Correct Answer: Option A


Explanation:
Libertarian paternalism, the philosophical foundation of nudge theory, advocates interventions that improve welfare by guiding choices without restricting the set of available options.

This question belongs to: Economy GK Economy Set 1
Question #3
The concept of 'Break-even Analysis' is used to determine:
A. The level of output at which marginal cost is minimum
B. The level of output at which total revenue equals total cost
C. The level of output at which average cost is maximum
D. The level of output at which profit is maximised

Correct Answer: Option B


Explanation:
Break-even analysis identifies the output level at which total revenue equals total cost, so that the firm makes neither profit nor loss.

This question belongs to: Economy GK Economy Set 1