The 'financial trilemma' states that a country cannot simultaneously have: MCQ with Answer and Explanation

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The 'financial trilemma' states that a country cannot simultaneously have:

A. free capital mobility, fixed exchange rates and independent monetary policy

B. free trade, high tariffs and high exports

C. low taxes, high spending and low deficit

D. high growth, low inflation and low unemployment

Answer: Option A

Solution (By JKSSB Mock Tests)

The trilemma says a country can achieve only two of three: free capital mobility, fixed exchange rate and independent monetary policy.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is NOT a type of tax based on the impact on income distribution?

A. Ad valorem tax as a distribution classification

B. Progressive tax

C. Proportional tax

D. Regressive tax

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Correct Answer: Option A

Explanation:
Ad valorem is a classification based on the method of assessment (percentage of value). Based on impact on distribution, taxes are progressive, proportional or regressive.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'National Mission on Food Processing' is implemented by the Ministry of:

A. Consumer Affairs

B. Agriculture

C. Health

D. Food Processing Industries

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Correct Answer: Option D

Explanation:
The National Mission on Food Processing is implemented by the Ministry of Food Processing Industries.

This question belongs to: Economy GK Economy Set 1

Question #3

The concept of 'Sudden Stop' in international finance refers to:

A. Only a stop in trade flows

B. An abrupt reversal of capital inflows into a country

C. Only a stop in domestic investment

D. A gradual reduction in capital flows

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Correct Answer: Option B

Explanation:
A sudden stop is a large and abrupt reversal of capital inflows, often associated with currency crises, output collapses and balance-sheet problems in emerging markets.

This question belongs to: Economy GK Economy Set 1

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