Which of the following is an assumption of the perfect competition model? MCQ with Answer and Explanation

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Which of the following is an assumption of the perfect competition model?

A. Product differentiation

B. Firms face a downward-sloping demand curve

C. Free entry and exit of firms

D. Selling costs are significant

Answer: Option C

Solution (By JKSSB Mock Tests)

Perfect competition assumes free entry and exit, homogeneous product, large number of buyers and sellers, and perfect information, resulting in firms being price takers.

This question belongs to: Economy GK Economy Set 1

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Question #1

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The 'International Monetary Fund' lending to a country under a Stand-By Arrangement is usually for:

A. military support

B. short-term balance of payments support

C. climate finance

D. long-term development projects

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Correct Answer: Option B

Explanation:
IMF Stand-By Arrangements provide short-term balance of payments support.

This question belongs to: Economy GK Economy Set 1

Question #2

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The 'Consolidated Fund of India' includes:

A. only tax revenues

B. only borrowing

C. all government revenues, borrowings and loans received

D. only foreign aid

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Correct Answer: Option C

Explanation:
The Consolidated Fund of India includes all government revenues, borrowings and receipts.

This question belongs to: Economy GK Economy Set 1

Question #3

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Net factor income from abroad is equal to:

A. factor income received from abroad minus factor income paid to abroad

B. exports minus imports

C. factor income received from abroad plus factor income paid to abroad

D. remittances received by India

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Correct Answer: Option A

Explanation:
Net factor income from abroad is the difference between factor income received from abroad and factor income paid abroad.

This question belongs to: Economy GK Economy Set 1

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