The 'injection' into the circular flow in a three-sector economy includes: MCQ with Answer and Explanation

The 'injection' into the circular flow in a three-sector economy includes:
A. taxes
B. government expenditure and investment
C. saving
D. imports
Answer: Option B
Solution (By JKSSB Mock Tests)
In a three-sector economy, injections include investment and government expenditure.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is used to measure the degree of concentration in an industry?
A. Lorenz curve only
B. Herfindahl-Hirschman Index
C. Gini coefficient only
D. Human Development Index

Correct Answer: Option B


Explanation:
The Herfindahl-Hirschman Index (HHI) is calculated as the sum of the squares of the market shares of all firms in an industry and is widely used to measure market concentration.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Foreign Direct Investment' policy in India is formulated by:
A. NITI Aayog
B. RBI
C. SEBI
D. Department for Promotion of Industry and Internal Trade

Correct Answer: Option D


Explanation:
FDI policy is formulated by the Department for Promotion of Industry and Internal Trade.

This question belongs to: Economy GK Economy Set 1
Question #3
In the context of financial markets, 'Adverse Selection' before a loan is made refers to:
A. Only the problem of monitoring after the loan
B. Borrowers becoming riskier after receiving loans
C. Borrowers with higher risk being more likely to seek loans
D. Lenders always having perfect information

Correct Answer: Option C


Explanation:
Adverse selection in credit markets occurs when higher-risk borrowers are more eager to borrow at any given interest rate, so that the pool of applicants becomes riskier as the interest rate rises.

This question belongs to: Economy GK Economy Set 1