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. Velocity of money is unstable

B. Output is demand-determined

C. Interest rates determine money demand primarily

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

Answer: Option D

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

The 'Financial Stability and Development Council' is chaired by:

A. RBI Governor

B. SEBI Chairman

C. Union Finance Minister

D. Prime Minister

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Correct Answer: Option C

Explanation:
The Financial Stability and Development Council is chaired by the Union Finance Minister.

This question belongs to: Economy GK Economy Set 1

Question #2

Which of the following is NOT a source of agricultural finance in India?

A. Cooperative societies

B. Commercial banks

C. NABARD

D. Stock exchanges for small farmers

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Correct Answer: Option D

Explanation:
Stock exchanges primarily serve corporate entities. Agricultural finance is provided by commercial banks, cooperatives, RRBs and refinanced by NABARD.

This question belongs to: Economy GK Economy Set 1

Question #3

Balance of Trade refers to the difference between:

A. exports and imports of goods and services

B. foreign exchange reserves and gold

C. capital inflows and outflows

D. exports and imports of goods only

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Correct Answer: Option D

Explanation:
Balance of Trade is the difference between a country's exports and imports of goods only.

This question belongs to: Economy GK Economy Set 1

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