Keynes' liquidity preference theory relates the demand for money to: MCQ with Answer and Explanation

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Keynes' liquidity preference theory relates the demand for money to:

A. prices only

B. interest rate and income

C. exchange rate

D. income only

Answer: Option B

Solution (By JKSSB Mock Tests)

Liquidity preference theory says money demand depends on income and the interest rate.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Clean Note Policy' of RBI aims to:

A. ensure good quality currency notes in circulation

B. ban all old notes

C. print more currency

D. reduce currency in circulation

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Correct Answer: Option A

Explanation:
Clean Note Policy aims to keep currency notes in good quality.

This question belongs to: Economy GK Economy Set 1

Question #2

In the context of the Indian economy, the demographic dividend can be harnessed through:

A. Increasing the dependency ratio

B. Investing in education, skill development and job creation for the working-age population

C. Reducing the labour force participation rate

D. Raising the fertility rate continuously

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Correct Answer: Option B

Explanation:
To realise the demographic dividend, a country must invest in human capital and create productive employment opportunities for its large working-age population.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'OPEC' is an organization of:

A. natural gas exporters only

B. oil-exporting countries

C. coal exporters

D. oil-importing countries

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Correct Answer: Option B

Explanation:
OPEC is the Organization of the Petroleum Exporting Countries.

This question belongs to: Economy GK Economy Set 1

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