The concept of 'wealth effect' in consumption refers to: MCQ with Answer and Explanation

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The concept of 'wealth effect' in consumption refers to:

A. investment increasing when interest rates rise

B. consumption increasing when wealth increases

C. consumption increasing when debt increases

D. saving increasing when wealth falls

Answer: Option B

Solution (By JKSSB Mock Tests)

The wealth effect says consumption rises when household wealth rises.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Goods and Services Tax' rate on cinema tickets below Rs 100 is:

A. 5%

B. 12%

C. 18%

D. 28%

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Correct Answer: Option B

Explanation:
Cinema tickets up to Rs 100 attract 12% GST.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'European Central Bank' headquarters is in:

A. Berlin

B. Brussels

C. Paris

D. Frankfurt

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Correct Answer: Option D

Explanation:
ECB headquarters is in Frankfurt.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'GDP deflator' is a price index that measures:

A. only food prices

B. prices of all domestically produced final goods and services

C. only consumer prices

D. only wholesale prices

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Correct Answer: Option B

Explanation:
GDP deflator measures the average price of all final goods and services produced domestically.

This question belongs to: Economy GK Economy Set 1

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