The concept of 'Multiplier' in Keynesian economics is larger when: MCQ with Answer and Explanation

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The concept of 'Multiplier' in Keynesian economics is larger when:

A. Tax rate is higher

B. Marginal propensity to consume is lower

C. Marginal propensity to consume is higher

D. Marginal propensity to save is higher

Answer: Option C

Solution (By JKSSB Mock Tests)

The investment multiplier = 1/(1−MPC). A higher marginal propensity to consume leads to a larger multiplier effect on income.

This question belongs to: Economy GK Economy Set 1

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The 'Advance Pricing Agreement' is related to:

A. customs valuation

B. transfer pricing

C. indirect taxes

D. income from salary

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Correct Answer: Option B

Explanation:
Advance Pricing Agreements relate to transfer pricing arrangements.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Goods and Services Tax' rate on telecom services is:

A. 28%

B. 18%

C. 12%

D. 5%

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Correct Answer: Option B

Explanation:
Telecom services attract 18% GST.

This question belongs to: Economy GK Economy Set 1

Question #3

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B. Central authority allocates resources according to a plan

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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

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