Which of the following is a characteristic of a Giffen good? MCQ with Answer and Explanation

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Which of the following is a characteristic of a Giffen good?

A. Demand decreases as price increases

B. Income elasticity is positive

C. It is a luxury good

D. Demand increases as price increases due to strong negative income effect

Answer: Option D

Solution (By JKSSB Mock Tests)

A Giffen good is an inferior good for which the negative income effect outweighs the substitution effect, resulting in an upward-sloping demand curve.

This question belongs to: Economy GK Economy Set 1

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Question #1

In the context of inflation, 'Headline Inflation' typically refers to:

A. Overall inflation including all items in the basket

B. Only food inflation

C. Inflation excluding food and fuel

D. Only fuel inflation

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Correct Answer: Option A

Explanation:
Headline inflation measures the total inflation in an economy, including all items such as food, fuel and others. Core inflation excludes volatile items like food and fuel.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'NEFT' settlement in India has been made available on a:

A. monthly basis

B. only at branches

C. batch basis only on weekdays

D. 24x7 basis since December 2019

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Correct Answer: Option D

Explanation:
NEFT is available 24x7 since December 2019.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is NOT a objective of fiscal policy?

A. Economic growth

B. Full employment

C. Price stability

D. Control of money supply

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Correct Answer: Option D

Explanation:
Control of money supply is the objective of monetary policy. Fiscal policy aims at economic growth, price stability, full employment and equitable distribution of income.

This question belongs to: Economy GK Economy Set 1

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