Top 80+ Solved Currency and Inflation MCQ Questions Answer
Q. The period of high inflation and low economic growth is termed as: [RRB 1992]
a. stagnation
b. take-off stage in economy
c. stagflation
d. none of these
Q. Stagflation implies a case of: [CDS 1992]
a. galloping inflation
b. recession plus inflation
c. adverse balance of trade
d. rising wages and employment
Q. Inflation can be contained by:
a. surplus budget
b. increase in taxation
c. reduction in public expenditure
d. all the above
Q. Deficit financing creates additional paper currency to fill the gap between expenditureand revenue. This device aims at economic development but if it fails, it generates : [IFS 1990]
a. inflation
b. devaluation
c. deflation
d. demonetization
Q. A steady increase in the general level of prices as a result of excessive increase in aggregate demand as compared to aggregate supply is termed as : [CDS 1999]
a. demand-pull inflation
b. cost-push inflation
c. stagflation
d. structural inflation
Q. A high rate of inflation tends to worsen balance of payments because:
a. prices of imported goods rise
b. prices of exported goods rise making exports less competitive
c. prices of imported goods fall and hence more is imported
d. prices of exported goods fall and hence less amount is obtained in terms of foreign exchange
Q. The effect of inflation on tax revenue results in a situation known as :
a. stagflation
b. fiscaldrag
c. reflation
d. disinflation
Q. The sum of which of the following constitutes Broad Money in India? [IAS 1997] 1. Currency with the public 2. Demand deposits with banks 3. Time deposits with banks 4. Other deposits with RBI Choose the correct answer using the codes given below:
a. 1 and 2
b. 1, 2 and 3
c. 1, 2, 3 and 4
d. 1, 2 and 4
Q. Rising prices lead to all but one of the following:
a. promotion of inequalities
b. generation of black money
c. adverse effect on balance of payments
d. adverse effect on speculation
Q. Consider the following statements about Wholesale Price Index (WPI) : 1. It captures the price movement extensively and is, therefore, taken as an indicator of inflation. 2. The office of the Economic adviser (OEA) is entrusted with the function of compilation and publication of the weekly wholesale price index number in India. Which of the statements given above is/are correct? [CDS 2009]
a. I only
b. II only
c. Both I and II
d. Neither I nor II
Q. In the last one decade, which one among the following sectors has attracted the highestForeign Direct Investment inflows into India? [IAS 2004]
a. Chemicals other than fertilizers
b. Services sector
c. Food processing
d. Telecommunication
Q. Under the Constitution, the power to raise and disburse public funds:
a. has been vested in Union Government
b. has been divided between the Union and State Governments
c. has been given to the Finance Commission
d. has not been given to anyone