The concept of 'Fiscal Multiplier' measures: MCQ with Answer and Explanation

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The concept of 'Fiscal Multiplier' measures:

A. Only the change in interest rates

B. Only the change in the money supply

C. Only the change in the exchange rate

D. The change in output resulting from a unit change in government spending or taxes

Answer: Option D

Solution (By JKSSB Mock Tests)

The fiscal multiplier is the ratio of the change in real GDP to an exogenous change in the fiscal instrument (government purchases or taxes).

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is NOT a type of market based on the degree of competition?

A. Monopoly

B. Barter market as a competition classification

C. Perfect competition

D. Oligopoly

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Correct Answer: Option B

Explanation:
Barter refers to exchange without money. Market structures based on competition are perfect competition, monopolistic competition, oligopoly and monopoly.

This question belongs to: Economy GK Economy Set 1

Question #2

Tax revenue of the central government is classified under:

A. capital receipts

B. non-tax revenue

C. revenue receipts

D. borrowings

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Correct Answer: Option C

Explanation:
Tax revenue is a revenue receipt.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Goods and Services Tax' on carbonated water is:

A. 18%

B. 28% plus cess

C. 5%

D. 12%

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Correct Answer: Option B

Explanation:
Carbonated water and aerated drinks attract 28% GST plus cess.

This question belongs to: Economy GK Economy Set 1

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