The 'liquidity trap' causes which policy to become ineffective? MCQ with Answer and Explanation

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The 'liquidity trap' causes which policy to become ineffective?

A. trade policy

B. exchange rate policy

C. expansionary monetary policy

D. fiscal policy

Answer: Option C

Solution (By JKSSB Mock Tests)

In a liquidity trap, interest rates are near zero and monetary expansion does not lower rates further, making monetary policy ineffective.

This question belongs to: Economy GK Economy Set 1

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The 'Reverse Charge Mechanism' under GST shifts the tax liability to:

A. supplier

B. GST council

C. government

D. recipient

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Correct Answer: Option D

Explanation:
Under reverse charge, the recipient of goods or services pays the tax.

This question belongs to: Economy GK Economy Set 1

Question #2

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

A. 18%

B. 5%

C. 28%

D. 12%

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Correct Answer: Option A

Explanation:
Housekeeping services attract 18% GST.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'FDI' in insurance sector is allowed up to what percentage?

A. 26%

B. 49%

C. 74%

D. 100%

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Correct Answer: Option C

Explanation:
FDI in insurance is allowed up to 74%.

This question belongs to: Economy GK Economy Set 1

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