The 'marginal propensity to consume' can never be greater than: MCQ with Answer and Explanation

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The 'marginal propensity to consume' can never be greater than:

A. 0.5

B. 2

C. 1

D. infinity

Answer: Option C

Solution (By JKSSB Mock Tests)

MPC is the fraction of additional income consumed, so it ranges from 0 to 1.

This question belongs to: Economy GK Economy Set 1

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Question #1

In the context of Indian economy, the concept of 'Inclusive Growth' emphasises:

A. Growth only in the industrial sector

B. Growth without any government intervention

C. Growth only in urban areas

D. Growth that benefits all sections of society

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Correct Answer: Option D

Explanation:
Inclusive growth refers to economic growth that creates opportunities for all segments of the population and distributes the benefits of prosperity more equitably.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'dependency ratio' in demography is defined as:

A. dependent population divided by working-age population

B. working-age population divided by dependent population

C. elderly population divided by children

D. rural population divided by urban population

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Correct Answer: Option A

Explanation:
Dependency ratio = dependent population / working-age population.

This question belongs to: Economy GK Economy Set 1

Question #3

The concept of 'Accelerator Principle' states that:

A. Consumption depends on the rate of interest

B. Saving depends only on income

C. Investment depends on the rate of change of income or output

D. Investment depends on the level of income

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Correct Answer: Option C

Explanation:
The accelerator principle posits that net investment is a function of the change in output or income; a rise in demand induces a multiple increase in investment.

This question belongs to: Economy GK Economy Set 1

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