The term 'Gross Fixed Capital Formation' includes: MCQ with Answer and Explanation

The term 'Gross Fixed Capital Formation' includes:
A. Only construction of buildings
B. Only financial investments
C. Only inventory investment
D. Investment in fixed assets such as machinery, buildings and infrastructure
Answer: Option D
Solution (By JKSSB Mock Tests)
Gross Fixed Capital Formation refers to the net addition to the stock of fixed assets such as plant, machinery, buildings and infrastructure during a period.

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Practice More Economy Set 1 Questions

Question #1
Currency appreciation generally makes exports:
A. more expensive in foreign currency
B. free from tariffs
C. unchanged
D. cheaper

Correct Answer: Option A


Explanation:
When a currency appreciates, domestic goods become more expensive for foreign buyers, reducing exports.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'demonstration effect' in consumption means:
A. people consume only basic goods
B. people save more
C. people reduce consumption
D. people copy the consumption patterns of others

Correct Answer: Option D


Explanation:
The demonstration effect is the tendency to imitate the consumption patterns of others.

This question belongs to: Economy GK Economy Set 1
Question #3
M0 in India is also known as:
A. broad money
B. reserve money
C. high-powered money plus time deposits
D. narrow money

Correct Answer: Option B


Explanation:
M0 is reserve money or high-powered money, comprising currency in circulation plus bankers' deposits with RBI and other deposits.

This question belongs to: Economy GK Economy Set 1