The term 'Base Year' in national income accounting is important because it: MCQ with Answer and Explanation

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The term 'Base Year' in national income accounting is important because it:

A. Provides the price structure for calculating real GDP

B. Fixes the exchange rate

C. Determines the fiscal deficit target

D. Determines the tax rates

Answer: Option A

Solution (By JKSSB Mock Tests)

The base year supplies the constant price weights used to compute real GDP and other volume measures, enabling meaningful comparisons over time.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The 'Appropriation Bill' is passed under which article of the Constitution?

A. Article 110

B. Article 114

C. Article 266

D. Article 280

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Correct Answer: Option B

Explanation:
The Appropriation Bill is passed under Article 114 to authorize withdrawal from the Consolidated Fund.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Goods and Services Tax' on hotel room service is:

A. 12%

B. 18%

C. 5%

D. 28%

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Correct Answer: Option B

Explanation:
Room service in hotels generally attracts 18% GST.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is NOT a type of inflation based on speed?

A. Creeping inflation

B. Walking inflation

C. Demand-pull inflation

D. Galloping inflation

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Correct Answer: Option C

Explanation:
Demand-pull inflation is a classification based on cause. Based on speed/intensity, inflation is classified as creeping, walking, running and galloping (or hyperinflation).

This question belongs to: Economy GK Economy Set 1

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