The term 'Primary Market' in the capital market refers to: MCQ with Answer and Explanation

The term 'Primary Market' in the capital market refers to:
A. Market for short-term funds only
B. Market for agricultural commodities
C. Market for trading existing securities
D. Market for issue of new securities
Answer: Option D
Solution (By JKSSB Mock Tests)
The primary market is the market where new securities are issued by companies or governments for the first time to raise capital. The secondary market deals with existing securities.

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Practice More Economy Set 1 Questions

Question #1
Which of the following is a feature of the 'Modern Supply-Side Economics' emphasis?
A. Complete neglect of incentives
B. Only demand management through fiscal expansion
C. Only monetary expansion
D. Tax incentives and structural reforms to raise potential output and improve incentives to work, save and invest

Correct Answer: Option D


Explanation:
Supply-side approaches stress policies that expand the productive capacity of the economy by improving incentives, reducing distortions and raising the efficiency of resource allocation.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'long-run Phillips curve' is vertical at:
A. zero inflation
B. the natural rate of unemployment
C. full employment with zero unemployment
D. maximum inflation

Correct Answer: Option B


Explanation:
The long-run Phillips curve is vertical at the natural rate of unemployment.

This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is a feature of the 'Portfolio Balance' approach to exchange-rate determination?
A. Exchange rates are determined by the relative supplies of and demands for domestic and foreign assets
B. Only purchasing-power parity matters
C. Only goods-market equilibrium determines the exchange rate
D. Interest rates are irrelevant

Correct Answer: Option A


Explanation:
The portfolio-balance approach treats the exchange rate as the relative price of domestic and foreign assets and emphasises imperfect substitutability among assets denominated in different currencies.

This question belongs to: Economy GK Economy Set 1