Which of the following is most likely to cause a current account deficit to widen? MCQ with Answer and Explanation

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Which of the following is most likely to cause a current account deficit to widen?

A. Increase in remittances

B. Increase in exports

C. Fall in imports

D. Rise in crude oil prices

Answer: Option D

Solution (By JKSSB Mock Tests)

Rising crude oil prices increase the import bill, widening the current account deficit.

This question belongs to: Economy GK Economy Set 1

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Question #1

Open Market Operations refer to:

A. trading in stock exchanges

B. sale and purchase of government securities by the RBI

C. issue of new currency notes

D. lending by commercial banks to customers

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Correct Answer: Option B

Explanation:
Open Market Operations are the sale and purchase of government securities by the RBI to regulate liquidity.

This question belongs to: Economy GK Economy Set 1

Question #2

An indifference curve is convex to the origin because of:

A. diminishing marginal rate of substitution

B. increasing returns to scale

C. increasing marginal rate of substitution

D. constant marginal utility

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Correct Answer: Option A

Explanation:
Convexity of indifference curves is due to diminishing marginal rate of substitution.

This question belongs to: Economy GK Economy Set 1

Question #3

The Gini coefficient measures:

A. poverty

B. unemployment

C. inflation

D. income inequality

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Correct Answer: Option D

Explanation:
The Gini coefficient measures income inequality.

This question belongs to: Economy GK Economy Set 1

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