In the context of elasticity, if income elasticity of demand for a good is negative, the good is: MCQ with Answer and Explanation

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In the context of elasticity, if income elasticity of demand for a good is negative, the good is:

A. Inferior good

B. Normal good

C. Necessary good

D. Luxury good

Answer: Option A

Solution (By JKSSB Mock Tests)

A negative income elasticity of demand indicates that the good is inferior; demand for it falls as income rises.

This question belongs to: Economy GK Economy Set 1

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The 'Finance Secretary' in India is under the:

A. RBI

B. Ministry of Commerce

C. Ministry of Finance

D. NITI Aayog

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Correct Answer: Option C

Explanation:
Finance Secretary is the administrative head of the Ministry of Finance.

This question belongs to: Economy GK Economy Set 1

Question #2

A deflationary gap exists when:

A. the economy is above full employment

B. prices rise rapidly

C. aggregate demand exceeds full employment output

D. aggregate demand is less than full employment output

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Correct Answer: Option D

Explanation:
A deflationary gap occurs when aggregate demand is below the level needed for full employment output.

This question belongs to: Economy GK Economy Set 1

Question #3

The concept of 'Network Externalities' implies that:

A. The value of a good decreases with the number of users

B. The value of a good or service increases with the number of other users

C. Externalities are always negative

D. Only production externalities matter

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Correct Answer: Option B

Explanation:
Network externalities exist when the utility that a user derives from a good or service depends positively on the number of other users of the same or compatible goods.

This question belongs to: Economy GK Economy Set 1

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