The 'fixed exchange rate system' requires the central bank to: MCQ with Answer and Explanation

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The 'fixed exchange rate system' requires the central bank to:

A. intervene to maintain the rate within a narrow band

B. float the currency

C. abolish foreign exchange reserves

D. let the exchange rate move freely

Answer: Option A

Solution (By JKSSB Mock Tests)

Under a fixed exchange rate, the central bank intervenes to maintain the currency value.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Goods and Services Tax' on electricity transmission and distribution is:

A. 5%

B. not under GST

C. 0%

D. 18%

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Correct Answer: Option B

Explanation:
Electricity transmission and distribution are outside GST.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Food Processing Industries' in India are classified as which sector?

A. Tertiary

B. Quaternary

C. Primary

D. Secondary

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Correct Answer: Option D

Explanation:
Food processing is a secondary sector manufacturing activity.

This question belongs to: Economy GK Economy Set 1

Question #3

The Laffer Curve illustrates the relationship between:

A. Money supply and inflation

B. Inflation and unemployment

C. Tax rates and tax revenue

D. Interest rates and investment

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Correct Answer: Option C

Explanation:
The Laffer Curve shows that beyond a certain point, increasing tax rates may lead to a decrease in total tax revenue due to reduced economic activity and tax evasion.

This question belongs to: Economy GK Economy Set 1

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