In the context of the Indian economy, the term 'Twin Deficit' refers to: MCQ with Answer and Explanation

In the context of the Indian economy, the term 'Twin Deficit' refers to:
A. Capital account deficit and fiscal surplus
B. Fiscal deficit and current account deficit
C. Budget deficit and trade surplus
D. Revenue deficit and primary deficit only
Answer: Option B
Solution (By JKSSB Mock Tests)
Twin deficit refers to the simultaneous existence of a fiscal deficit (government budget) and a current account deficit (external sector) in an economy.

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Practice More Economy Set 1 Questions

Question #1
The concept of 'Precautionary Saving' arises because:
A. Individuals save only for retirement
B. Saving is independent of uncertainty
C. Only permanent income matters
D. Individuals save more when future income is uncertain

Correct Answer: Option D


Explanation:
Precautionary saving is additional saving undertaken by risk-averse agents to buffer against future income or expenditure uncertainty.

This question belongs to: Economy GK Economy Set 1
Question #2
MGNREGA was enacted in which year?
A. 2010
B. 2005
C. 2003
D. 2007

Correct Answer: Option B


Explanation:
MGNREGA was enacted in 2005.

This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is a feature of 'Nudge' theory in behavioural public policy?
A. Only financial incentives
B. The use of choice architecture to steer people toward better decisions without restricting their freedom of choice
C. The complete rejection of any behavioural interventions
D. The use of mandates and bans only

Correct Answer: Option B


Explanation:
A nudge is any aspect of choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing economic incentives, as popularised by Thaler and Sunstein.

This question belongs to: Economy GK Economy Set 1