Daily Current Affairs Quiz: August 13, 2025

Answer: D [1, 2, and 3]
Explanation:

Statement 1 is correct: Gross Domestic Product (GDP) measures the total market value of all final goods and services produced within the geographical boundaries of a country during a specific time period, regardless of who owns the resources.

Statement 2 is correct: Net National Product (NNP) is calculated as:

NNP=GNP−Depreciation (Consumption of fixed capital). It accounts for the wear and tear of capital assets.

Statement 3 is correct: Personal Income (PI) is the income actually received by individuals, and it includes transfer payments (such as pensions, unemployment allowances, and social security benefits), which are not earned through current production.

Answer: A [Increase in national savings]
Explanation:

Increase in national savings can lead to higher investment in the economy, which can boost productivity and GDP growth. Decrease in labor productivity, increase in import tariffs, and decrease in technological innovation are generally considered to negatively impact GDP growth.

Answer: B [A policy related to government revenue generation and expenditure to influence the economy]
Explanation:

Fiscal Policy refers to the use of government spending and tax policies to influence economic conditions, including demand for goods and services, employment, inflation, and economic growth.

Answer: A [Only 1 and 2]
Explanation:

Statement 1 is correct: Market failure occurs when the allocation of goods and services by a free market is inefficient and does not lead to a socially optimal outcome. This means that resources are not used in the best possible way for society.

Statement 2 is correct: The main causes of market failure include:

• Externalities (positive or negative spillover effects on third parties, like pollution),
• Public goods (which are non-excludable and non-rivalrous),
• Monopoly power (leading to higher prices and restricted output), and
• Information asymmetry (where one party has more information than the other, leading to market inefficiency).

Statement 3 is incorrect: Government intervention can sometimes correct market failure through policies such as taxes, subsidies, regulation, and provision of public goods. For example, pollution taxes can internalize negative externalities.

Answer: A [A decrease in the general price level of goods and services]
Explanation:

Deflation is characterized by a decrease in the general price level of goods and services. It is the opposite of inflation, which is an increase in the general price level of goods and services.