The 'Fiscal deficit' is financed by: MCQ with Answer and Explanation

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The 'Fiscal deficit' is financed by:

A. only disinvestment

B. only foreign aid

C. market borrowings and other liabilities

D. only taxes

Answer: Option C

Solution (By JKSSB Mock Tests)

Fiscal deficit is financed through market borrowings and other liabilities.

This question belongs to: Economy GK Economy Set 1

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Question #1

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Which of the following is an assumption of the Ricardian theory of comparative advantage?

A. There are increasing returns to scale

B. Labour is the only factor of production and is mobile internationally

C. Labour is the only factor of production and is immobile internationally

D. Capital is the only factor of production

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Correct Answer: Option C

Explanation:
Ricardo assumed a single factor (labour), constant returns, and international immobility of labour, while labour is mobile within a country.

This question belongs to: Economy GK Economy Set 1

Question #2

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The 'demographic dividend' can be reaped when:

A. elderly population is large

B. working-age population is large and productive

C. birth rate is high

D. dependency ratio is high

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Correct Answer: Option B

Explanation:
Demographic dividend arises from a large productive working-age population.

This question belongs to: Economy GK Economy Set 1

Question #3

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The concept of 'Liquidity Preference' includes which of the following motives?

A. Transactions, precautionary and speculative motives

B. Only speculative motive

C. Only precautionary motive

D. Only transactions motive

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Correct Answer: Option A

Explanation:
According to Keynes, the demand for money (liquidity preference) arises from three motives: transactions, precautionary and speculative.

This question belongs to: Economy GK Economy Set 1

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