The free-rider problem is associated with: MCQ with Answer and Explanation

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The free-rider problem is associated with:

A. common resources

B. public goods

C. club goods

D. private goods

Answer: Option B

Solution (By JKSSB Mock Tests)

Public goods are non-excludable, so individuals can benefit without paying, creating the free-rider problem.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The term 'Repo Rate' is the rate at which:

A. Government borrows from the public

B. Commercial banks borrow from the RBI against collateral of government securities

C. RBI borrows from commercial banks

D. Banks lend to each other in the call market

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Correct Answer: Option B

Explanation:
Repo rate is the interest rate at which the RBI lends short-term funds to commercial banks against the collateral of government securities under the Liquidity Adjustment Facility.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is a feature of the 'Real Business Cycle' theory?

A. Sticky prices are the main source of fluctuations

B. Business cycles are primarily caused by monetary shocks

C. Fiscal policy is the primary driver of cycles

D. Business cycles are primarily driven by real shocks, especially technology shocks

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Correct Answer: Option D

Explanation:
Real Business Cycle theory attributes macroeconomic fluctuations mainly to real shocks, particularly technological disturbances, under the assumption of continuous market clearing and rational expectations.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Fourth Five Year Plan' period was:

A. 1969-1974

B. 1974-1979

C. 1966-1971

D. 1961-1966

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Correct Answer: Option A

Explanation:
The Fourth Five Year Plan covered 1969-1974.

This question belongs to: Economy GK Economy Set 1

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