The concept of 'Liquidity Preference' theory of interest was given by: MCQ with Answer and Explanation

The concept of 'Liquidity Preference' theory of interest was given by:
A. Irving Fisher
B. Knut Wicksell
C. John Maynard Keynes
D. Classical economists
Answer: Option C
Solution (By JKSSB Mock Tests)
Keynes proposed the liquidity preference theory, which states that the rate of interest is determined by the demand for and supply of money, where demand arises from transactions, precautionary and speculative motives.

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Practice More Economy Set 1 Questions

Question #1
In the context of economic growth, the Harrod-Domar model emphasises the role of:
A. Natural resources only
B. Labour force growth only
C. Technological progress only
D. Savings and capital-output ratio

Correct Answer: Option D


Explanation:
The Harrod-Domar model states that the growth rate of an economy depends on the savings rate and the capital-output ratio (or inverse of the productivity of capital).

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Wholesale Price Index' measures:
A. prices of services
B. prices of consumer goods only
C. retail prices
D. prices at the wholesale level

Correct Answer: Option D


Explanation:
WPI measures price changes at the wholesale level.

This question belongs to: Economy GK Economy Set 1
Question #3
The concept of 'Lifelong Learning' in the context of technological change emphasises:
A. Only on-the-job training without formal education
B. The need for continuous education and skill upgrading throughout an individual’s working life
C. The irrelevance of skills in a digital economy
D. Only front-loaded education in youth

Correct Answer: Option B


Explanation:
Lifelong learning refers to the ongoing, voluntary and self-motivated pursuit of knowledge and skills throughout life, which becomes increasingly important as technological change accelerates the obsolescence of existing skills.

This question belongs to: Economy GK Economy Set 1