Which of the following is a feature of the Classical model of the economy? MCQ with Answer and Explanation

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Which of the following is a feature of the Classical model of the economy?

A. Flexible wages and prices ensuring continuous full employment

B. Possibility of liquidity trap

C. Importance of aggregate demand in determining output

D. Sticky wages and prices

Answer: Option A

Solution (By JKSSB Mock Tests)

The Classical model assumes flexible wages and prices that adjust continuously to maintain full employment equilibrium.

This question belongs to: Economy GK Economy Set 1

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Question #1

MSME classification in India is based on:

A. investment in plant and machinery or equipment and turnover

B. number of employees only

C. export earnings

D. location only

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Correct Answer: Option A

Explanation:
MSMEs are classified based on investment in plant and machinery/equipment and annual turnover.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Marginal Standing Facility' is available to banks at a rate how much above repo rate?

A. 0.50%

B. 0.25%

C. 1%

D. 2%

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Correct Answer: Option B

Explanation:
MSF rate is normally 0.25 percentage points above the repo rate.

This question belongs to: Economy GK Economy Set 1

Question #3

The 'International Development Association' is a part of:

A. World Bank Group

B. WTO

C. United Nations

D. IMF

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Correct Answer: Option A

Explanation:
IDA is part of the World Bank Group.

This question belongs to: Economy GK Economy Set 1

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