The 'base effect' in inflation calculation means: MCQ with Answer and Explanation

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The 'base effect' in inflation calculation means:

A. change in base year of the price index

B. effect of currency depreciation

C. the influence of the previous year's price level on current inflation

D. effect of money supply

Answer: Option C

Solution (By JKSSB Mock Tests)

Base effect refers to the impact of the previous year's price level on the current inflation rate.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a characteristic of the 'Splinternet' or 'Digital Fragmentation' concern?

A. The risk that the global internet may fragment into separate national or regional networks with incompatible rules and standards

B. The absence of any regulatory differences

C. Only the growth of a single global platform

D. The complete global harmonisation of all digital rules

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Correct Answer: Option A

Explanation:
Digital fragmentation (or the 'splinternet') refers to the potential balkanisation of the internet into distinct spheres governed by divergent national regulations, technical standards and platform ecosystems.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is NOT a feature of imperfect competition?

A. Few or many sellers with some control over price

B. Perfect knowledge

C. Product differentiation

D. Selling costs

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Correct Answer: Option B

Explanation:
Perfect knowledge is a feature of perfect competition. Imperfect competition is characterised by product differentiation, selling costs and some degree of price control by sellers.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'C2 cost' in agriculture includes A2 plus family labour plus:

A. interest on land and fixed capital

B. only pesticide cost

C. only fertilizer cost

D. only seed cost

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Correct Answer: Option A

Explanation:
C2 cost includes A2 plus family labour plus interest on land and fixed capital.

This question belongs to: Economy GK Economy Set 1

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