The 'Pigou effect' suggests that falling prices: MCQ with Answer and Explanation

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The 'Pigou effect' suggests that falling prices:

A. reduce real wealth

B. increase real wealth and consumption

C. increase unemployment

D. reduce money supply

Answer: Option B

Solution (By JKSSB Mock Tests)

The Pigou effect states that lower prices raise real wealth and stimulate consumption.

This question belongs to: Economy GK Economy Set 1

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Question #1

The concept of 'Green Bonds' refers to:

A. Only high-yield corporate bonds

B. Only short-term money-market instruments

C. Only conventional government bonds

D. Debt instruments whose proceeds are earmarked for environmentally beneficial projects

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Correct Answer: Option D

Explanation:
Green bonds are fixed-income securities issued to raise capital specifically for projects that have positive environmental or climate benefits, with proceeds tracked and reported accordingly.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Multidimensional Poverty Index' uses how many indicators?

A. 20

B. 12

C. 5

D. 10

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Correct Answer: Option D

Explanation:
MPI uses 10 indicators across three dimensions.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'Goods and Services Tax' rate on restaurant services in AC restaurants was initially 18%, but later revised to:

A. 12%

B. 28%

C. 5% without ITC

D. 18%

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Correct Answer: Option C

Explanation:
Restaurant services were rationalized to 5% without input tax credit.

This question belongs to: Economy GK Economy Set 1

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