Transfer payments are excluded from national income because they: MCQ with Answer and Explanation

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Transfer payments are excluded from national income because they:

A. are paid to foreigners

B. are included in personal income

C. are paid in cash

D. do not correspond to current production of goods and services

Answer: Option D

Solution (By JKSSB Mock Tests)

Transfer payments are one-sided payments with no corresponding production of goods or services.

This question belongs to: Economy GK Economy Set 1

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Question #1

Which of the following is an automatic stabiliser in the fiscal system?

A. Change in repo rate by the central bank

B. Progressive income tax structure

C. Discretionary increase in infrastructure spending

D. One-time stimulus package

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Correct Answer: Option B

Explanation:
Progressive income taxes automatically increase the tax burden during expansions and reduce it during contractions, stabilising disposable income without new legislation.

This question belongs to: Economy GK Economy Set 1

Question #2

Moral suasion by the RBI refers to:

A. raising reserve requirements

B. persuasion and advice to banks to follow monetary policy objectives

C. legal penalties on banks

D. buying securities from banks

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Correct Answer: Option B

Explanation:
Moral suasion is a non-statutory instrument of persuasion by the RBI to influence bank behaviour.

This question belongs to: Economy GK Economy Set 1

Question #3

The SARFAESI Act, 2002 primarily deals with:

A. payment systems

B. bank nationalization

C. recovery of non-performing assets and securitization

D. microfinance regulation

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Correct Answer: Option C

Explanation:
SARFAESI Act enables banks and financial institutions to recover non-performing assets.

This question belongs to: Economy GK Economy Set 1

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