Which of the following is a flow variable? MCQ with Answer and Explanation

Which of the following is a flow variable?
A. GDP
B. Money supply
C. Capital stock
D. Wealth
Answer: Option A
Solution (By JKSSB Mock Tests)
GDP is measured over a period of time and is a flow variable.

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Practice More Economy Set 1 Questions

Question #1
A Pigouvian tax is imposed to:
A. increase imports
B. internalize the external cost of a negative externality
C. reduce government revenue
D. encourage production of positive externality goods

Correct Answer: Option B


Explanation:
A Pigouvian tax is levied to make producers internalize the external cost of negative externalities.

This question belongs to: Economy GK Economy Set 1
Question #2
The term 'J-Curve Effect' in international economics refers to:
A. Continuous deterioration of trade balance
B. Initial worsening of trade balance after depreciation followed by improvement
C. Immediate improvement in trade balance after depreciation
D. No effect of exchange rate on trade balance

Correct Answer: Option B


Explanation:
The J-curve effect describes the pattern where a currency depreciation first worsens the trade balance (due to existing contracts) before improving it as quantities adjust.

This question belongs to: Economy GK Economy Set 1
Question #3
The term 'Open Market Operations' refer to:
A. Buying and selling of goods in the open market by the government
B. Lending by commercial banks to the public
C. Issuing new shares by companies
D. Buying and selling of government securities by the central bank

Correct Answer: Option D


Explanation:
Open Market Operations involve the purchase and sale of government securities by the central bank to regulate liquidity and money supply in the economy.

This question belongs to: Economy GK Economy Set 1