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. interest rate and income

B. exchange rate

C. income only

D. prices only

Answer: Option A

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 'Effective Revenue Deficit' was introduced to exclude from revenue deficit those grants:

A. used for creation of capital assets

B. used for interest payments

C. given to states for revenue expenditure

D. given to foreign countries

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Correct Answer: Option A

Explanation:
Effective revenue deficit excludes grants for creation of capital assets from revenue deficit.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'non-accelerating inflation rate of unemployment' is called:

A. NAFTA

B. NATO

C. NREGA

D. NAIRU

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Correct Answer: Option D

Explanation:
NAIRU is the non-accelerating inflation rate of unemployment.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'NACH' system is used for:

A. foreign exchange trading

B. stock trading

C. bulk payments such as subsidies and salary credits

D. cryptocurrency

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Correct Answer: Option C

Explanation:
NACH is used for bulk electronic payments.

This question belongs to: Economy GK Economy Set 1

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