The 'Keynesian cross' model shows equilibrium income where: MCQ with Answer and Explanation

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The 'Keynesian cross' model shows equilibrium income where:

A. exports equal imports

B. money supply equals money demand

C. interest rate equals inflation

D. aggregate demand equals aggregate supply

Answer: Option D

Solution (By JKSSB Mock Tests)

The Keynesian cross shows equilibrium where aggregate demand equals aggregate supply.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Aadhaar Payment Bridge System' enables:

A. stock trading

B. direct benefit transfers using Aadhaar number

C. insurance claims

D. foreign exchange trading

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Correct Answer: Option B

Explanation:
APBS enables direct benefit transfers using Aadhaar number.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following best describes the concept of 'Income Effect' in consumer theory?

A. Change in demand due to a change in tastes

B. Change in supply due to a change in input prices

C. Change in quantity demanded due to a change in relative prices holding real income constant

D. Change in quantity demanded due to a change in real income resulting from a price change

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Correct Answer: Option D

Explanation:
The income effect refers to the change in quantity demanded of a good that results solely from the change in real income caused by a change in the price of the good.

This question belongs to: Economy GK Economy Set 1

Question #3

The concept of 'Intergenerational Equity' in fiscal policy emphasises:

A. Only maximising current consumption

B. Only reducing taxes for the current generation

C. Only short-term stabilisation

D. Fair distribution of the burden of public debt between present and future generations

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Correct Answer: Option D

Explanation:
Intergenerational equity requires that the burden of financing public expenditure and debt is distributed fairly across generations so that future generations are not unduly burdened.

This question belongs to: Economy GK Economy Set 1

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