In the context of inflation measurement, the GDP deflator is: MCQ with Answer and Explanation

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In the context of inflation measurement, the GDP deflator is:

A. A measure of wholesale prices only

B. A measure of consumer price changes only

C. A fixed-basket consumer price index

D. The ratio of nominal GDP to real GDP

Answer: Option D

Solution (By JKSSB Mock Tests)

The GDP deflator is calculated as (Nominal GDP / Real GDP) × 100 and reflects price changes of all goods and services produced domestically.

This question belongs to: Economy GK Economy Set 1

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Question #1

In the context of monetary economics, the 'Velocity of Circulation of Money' refers to:

A. The rate of inflation only

B. The average number of times a unit of money is used to purchase final goods and services in a given period

C. The rate of interest

D. The growth rate of the money supply

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Correct Answer: Option B

Explanation:
Velocity of money measures how frequently the average unit of currency is spent on final goods and services during a given time period; it appears in the equation of exchange.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'injection' into the circular flow in a three-sector economy includes:

A. government expenditure and investment

B. imports

C. taxes

D. saving

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Correct Answer: Option A

Explanation:
In a three-sector economy, injections include investment and government expenditure.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Customs duty' is levied on:

A. services only

B. income of citizens

C. domestic production

D. imports and exports of goods

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Correct Answer: Option D

Explanation:
Customs duty is levied on imports and, in some cases, exports of goods.

This question belongs to: Economy GK Economy Set 1

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