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

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

A. balance of payments is in equilibrium

B. goods market is in equilibrium

C. labour market is in equilibrium

D. money market is in equilibrium

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Correct Answer: Option D

Explanation:
The LM curve represents equilibrium in the money market.

This question belongs to: Economy GK Economy Set 1

Question #2

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

A. 28%

B. 12%

C. 18%

D. 5%

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Correct Answer: Option C

Explanation:
Shipping services attract 18% GST, with some exemptions.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is NOT a function of the International Monetary Fund?

A. Providing short-term financial assistance for balance of payments problems

B. Providing long-term project finance for infrastructure

C. Surveillance of member countries' economic policies

D. Technical assistance and capacity building

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Correct Answer: Option B

Explanation:
Long-term project finance for infrastructure is primarily the role of the World Bank. The IMF focuses on short-term BOP support, surveillance and technical assistance.

This question belongs to: Economy GK Economy Set 1

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