General Knowledge MCQs
Topic Notes: General Knowledge
MCQs and preparation resources for competitive exams, covering important concepts, past papers, and detailed explanations.
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
1
What is 'Hyperinflation'?
Answer:
When prices rise uncontrollably and the currency loses value rapidly
Hyperinflation is a term to describe rapid, excessive, and out-of-control general price increases in an economy. It typically occurs when a government prints money to pay for spending, rendering the currency worthless (e.g., Zimbabwe in the late 2000s, Germany in 1923).
2
The transition from a command economy to a market economy is known as:
Answer:
Economic shock therapy
Shock therapy refers to the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country, usually also including large-scale privatization of previously public-owned assets. This was seen in post-Soviet states.
3
Which of the following best describes 'Intellectual Property'?
Answer:
Intangible property that is the result of creativity (patents, copyrights)
Intellectual property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names, and images used in commerce. Protection of IP (via patents and copyrights) is crucial in capitalist economies to incentivize innovation.
4
The European Union (EU) functions as a single market. What does this mean?
Answer:
Goods, capital, services, and people move freely between member states
The EU Single Market refers to the EU as one territory without any internal borders or other regulatory obstacles to the free movement of goods and services. A functioning single market stimulates competition and trade.
5
What is the main criticism of the welfare state?
Answer:
It creates high tax burdens and may reduce the incentive to work
Critics of the welfare state (a system where the government protects the health and well-being of its citizens) argue that the high taxes required to fund it slow down economic growth and that generous benefits might discourage people from seeking employment.
6
Which event in 1929 highlighted the instability of unregulated markets?
Answer:
The Great Depression
The Great Depression was a severe worldwide economic depression that took place mostly during the 1930s, beginning in the United States. The stock market crash of 1929 exposed weaknesses in the unregulated capitalist system and led to increased government intervention (Keynesian economics).
7
What is 'Protectionism'?
Answer:
Economic policy of restricting imports from other countries
Protectionism refers to government policies that restrict international trade to help domestic industries. Protectionist policies are usually implemented with the goal to improve economic activity within a domestic economy but can also be implemented for safety or quality concerns.
8
In a Mixed Economy, why does the government provide public education?
Answer:
Because it is a 'positive externality' that benefits society as a whole
Public education creates positive externalities; an educated population leads to a more productive workforce, lower crime, and better civic engagement. The private market might not provide enough education for everyone due to cost, so the government steps in to ensure broad access.
9
The 'Bourgeoisie' in Marxist terms refers to:
Answer:
The capitalist class who own the means of production
In Marxist philosophy, the bourgeoisie is the social class that came to own the means of production during modern industrialization and whose societal concerns are the value of property and the preservation of capital to ensure the perpetuation of their economic supremacy.
10
What is a 'Black Market'?
Answer:
An illegal traffic or trade in officially controlled or scarce commodities
A black market, or underground economy, is economic activity that takes place outside government-sanctioned channels. It often arises in command economies to bypass price controls or rationing, or in market economies to avoid taxes or trade illegal goods.