The 'break-even point' in consumption occurs when: MCQ with Answer and Explanation

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The 'break-even point' in consumption occurs when:

A. saving equals investment

B. consumption equals income

C. MPC equals zero

D. consumption equals saving

Answer: Option B

Solution (By JKSSB Mock Tests)

At break-even point, consumption equals income, so saving is zero.

This question belongs to: Economy GK Economy Set 1

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Question #1

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The concept of 'Terms of Trade' deterioration for developing countries was emphasised by:

A. Raul Prebisch and Hans Singer

B. Adam Smith

C. David Ricardo

D. Heckscher and Ohlin

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Correct Answer: Option A

Explanation:
The Prebisch-Singer hypothesis argues that the terms of trade of primary commodity exporters (mostly developing countries) tend to deteriorate over time relative to manufactured goods.

This question belongs to: Economy GK Economy Set 1

Question #2

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The 'Personal Disposable Income' is personal income minus:

A. customs duty

B. indirect taxes

C. direct personal taxes and other deductions

D. corporate tax

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Correct Answer: Option C

Explanation:
Personal disposable income is personal income minus direct personal taxes and other receipts of government.

This question belongs to: Economy GK Economy Set 1

Question #3

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The 'rate of inflation' is measured as:

A. change in exchange rate

B. percentage change in price index from one period to another

C. change in money supply

D. change in price level over time divided by current price level

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Correct Answer: Option B

Explanation:
Inflation rate is the percentage change in a price index from one period to the next.

This question belongs to: Economy GK Economy Set 1

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