The term 'core inflation' was coined because it excludes items with: MCQ with Answer and Explanation

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The term 'core inflation' was coined because it excludes items with:

A. high tax rates

B. high price volatility such as food and fuel

C. high import content

D. high weight in CPI

Answer: Option B

Solution (By JKSSB Mock Tests)

Core inflation excludes volatile food and fuel prices to reveal underlying inflation.

This question belongs to: Economy GK Economy Set 1

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Question #1

The 'Bombay Stock Exchange' is the oldest stock exchange in Asia and was established in:

A. 1875

B. 1850

C. 1947

D. 1900

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Correct Answer: Option A

Explanation:
BSE was established in 1875.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Finance Minister' who presented the 1991 budget and launched economic reforms was:

A. Yashwant Sinha

B. Manmohan Singh

C. Jaswant Singh

D. P. Chidambaram

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Correct Answer: Option B

Explanation:
Manmohan Singh, as Finance Minister, presented the 1991 budget that launched reforms.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is a feature of 'Herd Behaviour' in financial markets?

A. Individuals always act independently on the basis of their own information

B. Individuals imitate the actions of others, potentially leading to cascades and excess volatility

C. Imitation never occurs

D. Only fundamental information drives prices

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Correct Answer: Option B

Explanation:
Herd behaviour occurs when agents follow the actions of others rather than their own private information, which can generate informational cascades, bubbles and crashes.

This question belongs to: Economy GK Economy Set 1

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