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

Question
The concept of 'wealth effect' in consumption refers to:
A. saving increasing when wealth falls
B. consumption increasing when wealth increases
C. consumption increasing when debt increases
D. investment increasing when interest rates rise
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 'big push theory' of development was proposed by:
A. Amartya Sen
B. Paul Rosenstein-Rodan
C. W.W. Rostow
D. Arthur Lewis
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Correct Answer: Option B

Explanation:
The big push theory was proposed by Paul Rosenstein-Rodan.
This question belongs to: Economy GK Economy Set 1
Question #2
Which of the following is a characteristic of 'Libertarian Paternalism'?
A. The design of policies that steer people toward better choices while preserving freedom of choice
B. The complete rejection of any paternalistic intervention
C. The use of mandates that eliminate choice
D. Only laissez-faire without any guidance
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Correct Answer: Option A

Explanation:
Libertarian paternalism, the philosophical foundation of nudge theory, advocates interventions that improve welfare by guiding choices without restricting the set of available options.
This question belongs to: Economy GK Economy Set 1
Question #3
The 'Goods and Services Tax' on telecommunication towers is:
A. 18%
B. 28%
C. 12%
D. 5%
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Correct Answer: Option A

Explanation:
Telecommunication tower services attract 18% GST.
This question belongs to: Economy GK Economy Set 1
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