Which of the following is a feature of the Classical Quantity Theory of Money? MCQ with Answer and Explanation

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Which of the following is a feature of the Classical Quantity Theory of Money?

A. Output is demand-determined

B. Money is neutral and affects only prices in the long run

C. Interest rates determine money demand primarily

D. Velocity of money is unstable

Answer: Option B

Solution (By JKSSB Mock Tests)

In the classical framework, money is neutral in the long run; changes in money supply affect only the price level, not real variables.

This question belongs to: Economy GK Economy Set 1

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Question #1

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The 'Credit Guarantee Fund Trust for Micro and Small Enterprises' provides guarantee cover to banks for loans to MSMEs.

A. Only for large enterprises

B. Only for foreign companies

C. True

D. False

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Correct Answer: Option C

Explanation:
CGTMSE provides credit guarantee to banks for loans to micro and small enterprises.

This question belongs to: Economy GK Economy Set 1

Question #2

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The 'Kisan Credit Card' was introduced in which year?

A. 1998

B. 2001

C. 2005

D. 1995

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Correct Answer: Option A

Explanation:
Kisan Credit Card was introduced in 1998.

This question belongs to: Economy GK Economy Set 1

Question #3

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The 'Fisher equation' is expressed as:

A. S = I

B. i = r + π

C. MV = PT

D. Y = C + I + G

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Correct Answer: Option B

Explanation:
The Fisher equation is i = r + π, where i is nominal interest rate, r is real interest rate and π is inflation.

This question belongs to: Economy GK Economy Set 1

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