Which of the following is a characteristic of the 'New Classical' policy ineffectiveness proposition? MCQ with Answer and Explanation

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Which of the following is a characteristic of the 'New Classical' policy ineffectiveness proposition?

A. Fiscal policy is always effective

B. Only unanticipated monetary policy can affect real output

C. Monetary policy is always effective

D. Anticipated monetary policy systematically affects real output

Answer: Option B

Solution (By JKSSB Mock Tests)

Under rational expectations and continuous market clearing, only unanticipated policy shocks can affect real variables; anticipated policy is neutral.

This question belongs to: Economy GK Economy Set 1

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Which of the following is a feature of the Indian fiscal federalism?

A. Division of tax powers between Centre and States with Finance Commission recommendations

B. Absence of any sharing of taxes

C. Complete centralisation of all taxes

D. Only states collect all major taxes

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Correct Answer: Option A

Explanation:
Indian fiscal federalism involves constitutional division of tax bases between the Centre and States, with the Finance Commission recommending the sharing of divisible taxes and grants.

This question belongs to: Economy GK Economy Set 1