Interest payment on government debt is classified as: MCQ with Answer and Explanation

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Interest payment on government debt is classified as:

A. capital expenditure

B. plan expenditure

C. non-tax revenue

D. revenue expenditure

Answer: Option D

Solution (By JKSSB Mock Tests)

Interest payment on debt is a recurring revenue expenditure.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'Consumer Price Index' measures:

A. retail prices paid by consumers

B. prices of exports

C. wholesale prices

D. prices of imports

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Correct Answer: Option A

Explanation:
CPI measures changes in retail prices paid by consumers.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Union Budget' is presented under which article of the Constitution?

A. Article 280

B. Article 265

C. Article 112

D. Article 110

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Correct Answer: Option C

Explanation:
The Annual Financial Statement is presented under Article 112.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the 'Carry Trade' strategy in foreign-exchange markets?

A. Borrowing in a low-interest-rate currency and investing in a high-interest-rate currency

B. Only trading on the basis of purchasing-power parity

C. Borrowing in a high-interest-rate currency and investing in a low-interest-rate currency

D. Only hedging all exchange-rate risk

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Correct Answer: Option A

Explanation:
A carry trade involves borrowing funds in a currency with a low interest rate and investing them in a currency with a higher interest rate, thereby earning the interest differential while remaining exposed to exchange-rate risk.

This question belongs to: Economy GK Economy Set 1

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