Top 80+ Solved Currency and Inflation MCQ Questions Answer
Q. Among the causes of inflation can be listed: 1. slow growth in agricultural output increasing non-development expenditure of Government 3. rapid population growth 4. rapid growth in costly imports
a. 1 and 2
b. 2 and 3
c. 1, 2, 3 and 4
d. 1 and 4 only
Q. Among the remedies of inflation we cannot include:
a. better capacity utilisation
b. lowering bank rate
c. reducing budgetary deficit
d. an efficient public distribution system
Q. A very rapid growth in prices in which money loses its value to the point where even barter may be preferable is known as:
a. inflation
b. hyper-inflation
c. deflation
d. disinflation
Q. Inflationary Gap is a situation characterized by:
a. excess of Aggregate Demand over Aggregate Supply at the full employment level
b. gap between Galloping Inflation and Runaway Inflation
c. Inflation coupled with recession
d. Inflation that usually prevails in a developing country
Q. Which of the following is wrongly matched?
a. Depression: Insufficient demand causing large scale unemployment of men and machinery over a long period of time
b. Recession: Reduction in demand and production/ investment over a short period of time
c. Stagflation: slow pace of economic activity due to falling prices
d. Boom: Rapid and all-round spurt in economic activity
Q. The cause of inflation is:
a. increase in money supply
b. fall in production
c. increase in money supply and fall in production
d. decrease in money supply and fall in production
Q. Who among the following is most benefitted from inflation? [IAS 1989]
a. Government pensioners
b. Creditors
c. Savings Bank Account holders
d. Debtors
Q. Which of the following groups suffer the most from inflation? [CPO SI 2003]
a. Debtors
b. Creditors
c. Business class
d. Holders of real assets
Q. Inflation is caused as a result of:
a. increase in money supply
b. fall in production
c. increase in money supply without a corresponding increase in production
d. decrease in money supply without a corresponding decrease in production
Q. Which of the following accounts for Cost-Push Inflation?
a. Increase in money supply
b. Increase in indirect taxation
c. Increase in population
d. Increase in non-plan expenditure
Q. The inflation experienced in the country at present is:
a. galloping inflation
b. secondary inflation
c. unrealistic inflation
d. cost-push inflation
Q. Which of the following governmental steps has proved relatively effective in controlling the double digit rate of inflation in the Indian economy during recent years?
a. Containing budgetory deficits and unproductive expenditure
b. Streamlined public distribution system
c. Enhanced rate of production of all consumer goods
d. Pursuing an export-oriented strategy
Q. Of the various ways of financing government's investment expenditure, the leastinflationary is : [PCS 1994]
a. foreign aid
b. deficit financing
c. taxation
d. public borrowing