The 'Gross Domestic Product' at market prices equals GVA at basic prices plus: MCQ with Answer and Explanation

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The 'Gross Domestic Product' at market prices equals GVA at basic prices plus:

A. depreciation

B. net factor income from abroad

C. product subsidies minus product taxes

D. product taxes minus product subsidies

Answer: Option D

Solution (By JKSSB Mock Tests)

GDP at market prices = GVA at basic prices + product taxes - product subsidies.

This question belongs to: Economy GK Economy Set 1

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Question #1

The concept of 'Moral Hazard' in the context of deposit insurance arises because:

A. Depositors monitor banks more intensively

B. Insurance always reduces risk-taking

C. Banks may take excessive risks knowing that deposits are insured

D. Depositors become more careful about bank risk

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Correct Answer: Option C

Explanation:
Deposit insurance can create moral hazard by reducing depositors’ incentive to monitor banks and by encouraging banks to take greater risks because the downside is partly borne by the insurer.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Goods and Services Tax' on veterinary services is:

A. 0%

B. exempt

C. 5%

D. 18%

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Correct Answer: Option B

Explanation:
Veterinary services are exempt from GST.

This question belongs to: Economy GK Economy Set 1

Question #3

Deadweight loss in economics refers to:

A. loss of revenue to the government

B. loss suffered by a monopolist

C. depreciation of capital

D. loss of total welfare due to market inefficiency

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Correct Answer: Option D

Explanation:
Deadweight loss is the loss of economic welfare due to inefficiency such as taxes, price controls or monopoly.

This question belongs to: Economy GK Economy Set 1

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