The LM curve shows combinations of income and interest rate where: MCQ with Answer and Explanation

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The LM curve shows combinations of income and interest rate where:

A. money market is in equilibrium

B. balance of payments is in equilibrium

C. goods market is in equilibrium

D. labour market is in equilibrium

Answer: Option A

Solution (By JKSSB Mock Tests)

The LM curve represents equilibrium in the money market.

This question belongs to: Economy GK Economy Set 1

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Question #1

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

A. 18%

B. 12%

C. 5%

D. 28%

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Correct Answer: Option A

Explanation:
Franchise services attract 18% GST.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Finance Commission' recommends distribution of which tax proceeds between the Centre and states?

A. corporate tax only

B. net proceeds of divisible taxes

C. Customs duties only

D. central excise duties only

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Correct Answer: Option B

Explanation:
The Finance Commission recommends distribution of net proceeds of divisible taxes between Centre and states.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of the Indian money market?

A. Dominance of long-term instruments only

B. No role for the Reserve Bank of India

C. Presence of call money, treasury bills, commercial paper and certificates of deposit

D. Absence of short-term instruments

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Correct Answer: Option C

Explanation:
The Indian money market comprises various short-term instruments including the call/notice money market, treasury bills, commercial paper, certificates of deposit and collateralised instruments.

This question belongs to: Economy GK Economy Set 1

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