The sacrifice ratio measures: MCQ with Answer and Explanation

Question
The sacrifice ratio measures:
A. the cost of inflation in terms of lost output
B. the ratio of tax revenue to GDP
C. the ratio of exports to imports
D. the cost of unemployment in terms of inflation
Answer: Option A
Solution (By JKSSB Mock Tests)
The sacrifice ratio is the cumulative output loss required to reduce inflation by one percentage point.
This question belongs to: Economy GK Economy Set 1
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Practice More Economy Set 1 Questions

Question #1
Which of the following is a feature of a socialist economy?
A. Collective ownership of means of production
B. Market determination of prices
C. Profit maximisation as the sole motive
D. Private ownership of means of production
Discuss
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Correct Answer: Option A

Explanation:
In a socialist economy, the means of production are owned collectively or by the state, and economic decisions are largely centralised.
This question belongs to: Economy GK Economy Set 1
Question #2
The 'Essential Commodities Act' was amended in 2020 to deregulate which commodities?
A. Cereals, pulses, oilseeds, edible oils and onion
B. Medicines
C. Fertilizers
D. Petroleum products
Discuss
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Correct Answer: Option A

Explanation:
The Essential Commodities (Amendment) Act 2020 deregulated cereals, pulses, oilseeds, edible oils and onion.
This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is a characteristic of the long-run equilibrium in perfect competition?
A. Price is greater than marginal cost
B. Firms earn supernormal profits
C. Price equals minimum average cost and firms earn normal profits
D. Firms operate with excess capacity
Discuss
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Correct Answer: Option C

Explanation:
In long-run equilibrium under perfect competition, free entry and exit ensure that price equals minimum long-run average cost and firms earn only normal profits.
This question belongs to: Economy GK Economy Set 1
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