The 'Fisher equation' is expressed as: MCQ with Answer and Explanation

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The 'Fisher equation' is expressed as:

A. MV = PT

B. S = I

C. Y = C + I + G

D. i = r + π

Answer: Option D

Solution (By JKSSB Mock Tests)

The Fisher equation is i = r + π, where i is nominal interest rate, r is real interest rate and π is inflation.

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' annual return is filed in:

A. GSTR-1

B. GSTR-4

C. GSTR-3B

D. GSTR-9

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Correct Answer: Option D

Explanation:
GSTR-9 is the annual return.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a feature of the 'Fear of Floating' phenomenon identified by Calvo and Reinhart?

A. Only advanced economies fear floating

B. All countries freely float without intervention

C. Many emerging-market countries that claim to float actually intervene heavily to limit exchange-rate volatility

D. Floating is always preferred to pegging

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Correct Answer: Option C

Explanation:
Fear of floating describes the empirical regularity that many countries officially classified as floaters in fact intervene frequently and allow only limited exchange-rate variability, often because of balance-sheet vulnerabilities.

This question belongs to: Economy GK Economy Set 1

Question #3

In the context of production functions, returns to scale refer to:

A. Change in cost when output changes

B. Change in output when one input is varied

C. Change in output when all inputs are varied proportionately

D. Change in price when supply changes

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Correct Answer: Option C

Explanation:
Returns to scale examine how output changes when all inputs are increased by the same proportion. They can be increasing, constant or decreasing.

This question belongs to: Economy GK Economy Set 1

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