The 'income effect' of a price rise in a normal good leads to: MCQ with Answer and Explanation

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The 'income effect' of a price rise in a normal good leads to:

A. purchase of inferior goods only

B. no change in purchase

C. decreased purchase of the good

D. increased purchase of the good

Answer: Option C

Solution (By JKSSB Mock Tests)

A price rise reduces real income, so the income effect causes less purchase of a normal good.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Goods and Services Tax' is often described as a game-changing reform because it:

A. increased many taxes

B. removed all taxes

C. unified the Indian market and simplified indirect taxes

D. increased direct tax

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Correct Answer: Option C

Explanation:
GST unified the Indian market and simplified indirect taxation.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'non-accelerating inflation rate of unemployment' is called:

A. NAIRU

B. NREGA

C. NAFTA

D. NATO

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Correct Answer: Option A

Explanation:
NAIRU is the non-accelerating inflation rate of unemployment.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'National Rural Health Mission' was launched in:

A. 2010

B. 2005

C. 2013

D. 2000

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Correct Answer: Option B

Explanation:
NRHM was launched in 2005.

This question belongs to: Economy GK Economy Set 1

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