The concept of 'Liquidity Preference' theory explains the determination of: MCQ with Answer and Explanation

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The concept of 'Liquidity Preference' theory explains the determination of:

A. Rate of interest

B. Real wages

C. Profit rate

D. Rent on land

Answer: Option A

Solution (By JKSSB Mock Tests)

According to Keynes, the rate of interest is determined by the demand for money (liquidity preference) and the supply of money.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is a characteristic of a command economy?

A. Prices determined solely by market forces

B. Central authority allocates resources according to a plan

C. Consumer sovereignty as the guiding principle

D. Decentralised decision making by private firms

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Correct Answer: Option B

Explanation:
In a command (planned) economy, a central planning authority makes major decisions regarding production, allocation of resources and distribution of goods.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is NOT a component of the Human Development Report published by UNDP?

A. Human Development Index

B. Multidimensional Poverty Index

C. Gender Inequality Index

D. Wholesale Price Index of India

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Correct Answer: Option D

Explanation:
The Wholesale Price Index is an Indian domestic price index. The Human Development Report includes HDI, GII, MPI and other development-related indices.

This question belongs to: Economy GK Economy Set 1

Question #3

Treasury bills are issued by:

A. State governments only

B. RBI on behalf of the Central Government

C. commercial banks

D. SEBI

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Correct Answer: Option B

Explanation:
Treasury bills are short-term debt instruments issued by the RBI on behalf of the Central Government.

This question belongs to: Economy GK Economy Set 1

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