The 'dumping margin' is the difference between: MCQ with Answer and Explanation

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The 'dumping margin' is the difference between:

A. export price and cost of production

B. export price and home market price

C. tariff and subsidy

D. import price and domestic price

Answer: Option B

Solution (By JKSSB Mock Tests)

Dumping margin is the difference between the normal value (home market price) and export price.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Taylor rule' is used by central banks to set:

A. policy interest rates based on inflation and output gap

B. reserve requirements

C. foreign exchange reserves

D. exchange rates

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Correct Answer: Option A

Explanation:
The Taylor rule prescribes setting policy interest rates based on inflation and output gap.

This question belongs to: Economy GK Economy Set 1

Question #2

The concept of 'Moral Hazard' in the context of deposit insurance arises because:

A. Depositors become more careful about bank risk

B. Insurance always reduces risk-taking

C. Depositors monitor banks more intensively

D. Banks may take excessive risks knowing that deposits are insured

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Correct Answer: Option D

Explanation:
Deposit insurance can create moral hazard by reducing depositors’ incentive to monitor banks and by encouraging banks to take greater risks because the downside is partly borne by the insurer.

This question belongs to: Economy GK Economy Set 1

Question #3

The Gini coefficient value of zero indicates:

A. perfect inequality

B. perfect equality of income distribution

C. no unemployment

D. high poverty

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Correct Answer: Option B

Explanation:
A Gini coefficient of zero indicates perfect equality in income distribution.

This question belongs to: Economy GK Economy Set 1

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