The primary market deals with: MCQ with Answer and Explanation

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The primary market deals with:

A. trading of existing shares

B. only government bonds

C. foreign currency

D. new issue of securities

Answer: Option D

Solution (By JKSSB Mock Tests)

The primary market deals with the issuance of new securities.

This question belongs to: Economy GK Economy Set 1

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Question #1

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The 'Goods and Services Tax' on import of services is:

A. 12%

B. levied as IGST under reverse charge

C. 5%

D. not levied

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Correct Answer: Option B

Explanation:
Import of services attracts IGST under reverse charge.

This question belongs to: Economy GK Economy Set 1

Question #2

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The term 'Fiscal Drag' refers to:

A. Decrease in tax rates

B. Increase in fiscal deficit

C. Automatic increase in tax revenue due to inflation

D. Deliberate reduction in government spending

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Correct Answer: Option C

Explanation:
Fiscal drag occurs when inflation pushes taxpayers into higher tax brackets, increasing tax revenue without any change in tax rates, acting as an automatic stabiliser.

This question belongs to: Economy GK Economy Set 1

Question #3

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The concept of 'Multiplier' in Keynesian economics is related to:

A. Change in money supply and change in prices

B. Change in interest rate and change in investment

C. Change in investment and change in income

D. Change in tax rate and change in revenue

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Correct Answer: Option C

Explanation:
The investment multiplier shows how much income increases as a result of an initial increase in investment. Multiplier = 1/(1-MPC).

This question belongs to: Economy GK Economy Set 1

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