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

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The 'Fiscal deficit' is financed by:

A. market borrowings and other liabilities

B. only disinvestment

C. only taxes

D. only foreign aid

Answer: Option A

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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Practice More Economy Set 1 Questions

Question #1

The 'Goods and Services Tax' on cheese is:

A. 12%

B. 5%

C. 18%

D. 28%

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Correct Answer: Option A

Explanation:
Cheese attracts 12% GST.

This question belongs to: Economy GK Economy Set 1

Question #2

A sunk cost is a cost that:

A. can be recovered easily

B. falls as output rises

C. is equal to marginal cost

D. has already been incurred and cannot be recovered

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Correct Answer: Option D

Explanation:
A sunk cost has already been incurred and cannot be recovered.

This question belongs to: Economy GK Economy Set 1

Question #3

The concept of 'Purchasing Power Parity' is used primarily for:

A. Calculating fiscal deficit

B. Measuring unemployment rates

C. Determining domestic interest rates only

D. Comparing the real value of currencies and living standards across countries

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Correct Answer: Option D

Explanation:
PPP exchange rates equalise the purchasing power of different currencies by eliminating differences in price levels, allowing better comparison of real income and living standards.

This question belongs to: Economy GK Economy Set 1

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