CURRENCY INFLATION MCQS SET 02

CURRENCY INFLATION MCQS SET 02

11) The best means of saving during inflation is to keep :
A) money
B) Government Bonds
C) equity
D) time deposits with Banks
Correct Answer: money
   
12) The period of high inflation and low economic growth is termed as :
A) stagnation
B) take-off stage in economy
C) stagflation
D) none of these3
Correct Answer: stagflation
   
13) Stagflation implies a case of :
A) galloping inflation
B) recession plus inflation
C) adverse balance of trade
D) rising wages and employment
Correct Answer: recession plus inflation
   
14) Inflation can be contained by :
A) surplus budget
B) increase in taxation
C) reduction in public expenditure
D) all the above
Correct Answer: all the above
   
15) Deficit financing creates additional paper currency to fill the gap between
expenditure and revenue. This device aims at economic development but if it
fails, it generates :
A) inflation
B) devaluation
C) deflation
D) demonetisation
Correct Answer: inflation

16) 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 :
A) demand-pull inflation
B) cost-push inflation
C) stagflation
D) structural inflation
Correct Answer: demand-pull inflation
   
17) Which of the following are definite implications of a fall in inflation?
1. Prices have fallen
2. Prices are increasing more slowly than before
3. Food supply has increased
4. There is industrial stagnation
A) 1 and 3
B) 1 only
C) 2 only
D) 1, 3 and 4
Correct Answer: 2 only
   
18) Among the causes of inflation can be listed :
1. slow growth in agricultural output
2. 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
Correct Answer: 1, 2, 3 and 4
   
19) 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
Correct Answer: lowering bank rate
   
20) 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
Correct Answer: hyper-inflation