Which of the following is a characteristic of a closed economy? MCQ with Answer and Explanation

Question
Which of the following is a characteristic of a closed economy?
A. Free capital flows
B. High volume of exports and imports
C. Membership of WTO only
D. No foreign trade
Answer: Option D
Solution (By JKSSB Mock Tests)
A closed economy does not engage in international trade or capital flows. It is self-sufficient and isolated from the rest of the world.
This question belongs to: Economy GK Economy Set 1
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Practice More Economy Set 1 Questions

Question #1
Which of the following is a characteristic of the 'Universal Basic Services' proposal?
A. Only private provision of all services
B. Public provision of a range of essential services free at the point of use as a complement or alternative to basic income
C. Only cash transfers without any public services
D. Only targeted residual welfare
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Correct Answer: Option B

Explanation:
Universal basic services advocates the collective provision of a set of essential services—such as health, education, housing, transport and information—available to all citizens free or at low cost.
This question belongs to: Economy GK Economy Set 1
Question #2
The 'Goods and Services Tax' on port services is:
A. 18%
B. 28%
C. 5%
D. 12%
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Correct Answer: Option A

Explanation:
Port services attract 18% GST.
This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is a capital expenditure of the government?
A. Subsidies
B. Interest payments
C. Construction of a new highway
D. Payment of salaries
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Correct Answer: Option C

Explanation:
Capital expenditure creates assets or reduces liabilities. Construction of a highway creates a durable asset and is therefore capital expenditure.
This question belongs to: Economy GK Economy Set 1
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