The sum of the Marginal Propensity to Consume (MPC) and the Marginal Propensity to Save (MPS) is always 1. This is because any additional unit of income earned by a consumer must either be spent (MPC) or saved (MPS). Therefore, MPC + MPS = 1. Options A, C, and D are mathematically incorrect based on Keynesian consumption theory.
Q2mcq1 mark
GST is equivalence of :
a.
Income tax
b.
Sales tax
Correct Answer
c.
Local tax
d.
Corporation tax
Step-by-Step AI Explanation
Verified Method
GST (Goods and Services Tax) is an indirect tax that replaced various multiple indirect taxes, primarily acting as a comprehensive Sales tax or Value Added Tax (VAT) on the supply of goods and services. Income tax, Corporation tax, and Local taxes are different categories of taxation that do not function as the primary equivalent of GST.
Q3mcq1 mark
Structural unemployment is a feature in a __________.
a.
Dynamic society
Correct Answer
b.
Static society
c.
Mixed economy
d.
Socialist society
Step-by-Step AI Explanation
Verified Method
Structural unemployment arises from shifts in the structure of an economy, such as changes in technology, consumer demand, or resource availability. This is a common feature in a dynamic society where constant innovation and economic shifts occur. It is less relevant in a static or socialist society where the labor market is less driven by rapid structural transformation.
Q4mcq1 mark
Identify the economic system, where only private ownership of production exists.
a.
Globalist Economy
b.
Capitalist Economy
Correct Answer
c.
Mixed Economy
d.
Socialist Economy
Step-by-Step AI Explanation
Verified Method
A Capitalist Economy (or Market Economy) is defined by the private ownership of the means of production, where decisions are driven by profit motive and market forces. Socialist economies rely on public ownership, and mixed economies involve a blend of both. Globalist is not an economic system type defined by ownership.
Q5mcq1 mark
If the values of two variables move in the same direction, it is said to be __________ correlation.
a.
multiple
b.
negative
c.
simple
d.
positive
Correct Answer
Step-by-Step AI Explanation
Verified Method
Correlation measures the relationship between two variables. When variables move in the same direction (i.e., when one increases, the other increases), it is termed a positive correlation. Negative correlation refers to variables moving in opposite directions.
Q6mcq1 mark
Foreign Direct Investments not permitted in India is :
a.
Pharmaceutical
b.
Banking
c.
Insurance
d.
Atomic energy
Correct Answer
Step-by-Step AI Explanation
Verified Method
In India, Foreign Direct Investment (FDI) is prohibited in specific sectors for national security and strategic reasons. Atomic energy is one of the key sectors where FDI is not permitted. Sectors like Pharmaceutical, Banking, and Insurance allow varying degrees of FDI under the automatic or government approval routes.
Q7mcq1 mark
Central Bank is __________ authority of any country.
a.
Wage
b.
Monetary
Correct Answer
c.
National Income
d.
Fiscal
Step-by-Step AI Explanation
Verified Method
The Central Bank (e.g., the Reserve Bank of India) acts as the Monetary authority of a country. It is responsible for formulating and implementing monetary policy, managing the currency, and controlling the money supply. Fiscal policy is the responsibility of the government.
Q8mcq1 mark
Inflation means :
a.
Value of money is increasing
b.
Prices are rising
Correct Answer
c.
Prices are remaining the same
d.
Prices are falling
Step-by-Step AI Explanation
Verified Method
Inflation is defined as a sustained increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services, meaning the purchasing power of money falls, making (A) incorrect.
Q9mcq1 mark
The average propensity to consume is measured by :
a.
Y/C
b.
C/Y
Correct Answer
c.
C+Y
d.
CY
Step-by-Step AI Explanation
Verified Method
The Average Propensity to Consume (APC) is defined as the ratio of total consumption to total income. It is mathematically expressed as $APC = C/Y$. Therefore, option (b) is correct. Options (a), (c), and (d) do not represent this economic ratio.
Q10mcq1 mark
Which of the following does not come under ‘Six dialogue partners’ of ASEAN ?
a.
India
b.
China
c.
North Korea
Correct Answer
d.
Japan
Step-by-Step AI Explanation
Verified Method
The dialogue partners of ASEAN include several nations like India, China, Japan, South Korea, Australia, and New Zealand. North Korea is not listed as one of the six dialogue partners of ASEAN; therefore, option (c) is the correct choice.
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