In the context of inflation, 'Built-in Inflation' refers to: MCQ with Answer and Explanation

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In the context of inflation, 'Built-in Inflation' refers to:

A. Inflation due to supply shocks only

B. Inflation resulting from the wage-price spiral

C. One-time increase in prices

D. Inflation caused by excess demand

Answer: Option B

Solution (By JKSSB Mock Tests)

Built-in inflation arises from adaptive expectations and the wage-price spiral, where past inflation influences current wage and price setting.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Goods and Services Tax' Council was constituted in which year?

A. 2014

B. 2017

C. 2018

D. 2016

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Correct Answer: Option D

Explanation:
The GST Council was constituted in 2016.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Pradhan Mantri Krishi Sinchai Yojana' aims at:

A. crop insurance

B. providing tractors

C. improving irrigation and water-use efficiency

D. promoting exports

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Correct Answer: Option C

Explanation:
PMKSY aims to improve irrigation coverage and water-use efficiency.

This question belongs to: Economy GK Economy Set 1

Question #3

The term 'J-Curve Effect' in international economics refers to:

A. No effect of exchange rate on trade balance

B. Continuous deterioration of trade balance

C. Immediate improvement in trade balance after depreciation

D. Initial worsening of trade balance after depreciation followed by improvement

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Correct Answer: Option D

Explanation:
The J-curve effect describes the pattern where a currency depreciation first worsens the trade balance (due to existing contracts) before improving it as quantities adjust.

This question belongs to: Economy GK Economy Set 1

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