CURRENCY INFLATION MCQS SET 18

CURRENCY INFLATION MCQS SET 18

171) With reference to Indian economy, consider the following statements
1. Three types of Consumer Price Index are used in the determination of Consumer Price Index.
2. Consumer Price Index of Industrial Worker and Consumer Price Index of Rural Labour has given same weight in the determination of inflation.
Which of the statements given above is/are correct?
A) Only 1
B) Only 2
C) Both 1 and 2
D) Neither 1 nor 2
Correct Answer: Only 1
   
172) Which one of the following is correct about the Phillips Curve of an economy?
A) An inverse relationship between the rate of unemployment and the rate of inflation
B) A directly proportionate of the rate of unemployment and the rate of the inflation
C) An inverse relationship between the rate of GDP growth and the rate of inflation
D) A directly proportionate of the rate of unemployment and the rate of the unemployment
Correct Answer: An inverse relationship between the rate of unemployment and the rate of inflation
   
173) Consider the following statements
1. In the disinflation the prices are still rising during disinflation but at a lower rate.
2. Deflation results into a sustained increase in the real value of money and other monetary items.
Which of the statements given above is/are correct?
A) Only 1
B) Only 2
C) Both 1 and 2
D) Neither 1 nor 2
Correct Answer: Both 1 and 2
   
174) Which one of the following is commonly occurred in the biflation in an economy?
A) Inflation
B) Deflation
C) Disinflation
D) Both 'a' and 'b'
Correct Answer: Both 'a' and 'b'
   
175) Consider the following statements
1. Headline inflation may not present an accurate picture of the current state of the economy.
2. Inflationary spikes occur when a particular section of the economy experiences a sudden price rise.
Which of the statements given above is/are correct?
A) Only 1
B) Only 2
C) Both 1 and 2
D) Neither 1 nor 2
Correct Answer: Both 1 and 2

176) Which one among the following is an appropriate description of deflation?
A) It is a sudden fall in the value of a currency against other currencies.
B) It is a persistent recession in the economy.
C) It is a-persistent fall in the general price level of goods and services.
D) It is fall in the rate of inflation over a period of time.
Correct Answer: It is a-persistent fall in the general price level of goods and services.
   
177) Which one of the following is likely to be the most inflationary, in its effect?
A) Repayment of public debt
B) Borrowing from the public to finance a budget deficit
C) Borrowing from banks to finance a budget deficit
D) Creating new money to finance a budget deficit
Correct Answer: Creating new money to finance a budget deficit
   
178) Consider the following statements
1. Tobin tax is a tax on all spot conversions of one currency into another.
2. Tobin tax is a currency transaction tax to find a way to manage exchange rate volatility.
Which of the statements given above is/are correct?
A) Only 1
B) Only 2
C) Both 1 and 2
D) Neither 1 nor 2
Correct Answer: Both 1 and 2
   
179) Which one of the following inflations is the type of inflation that results from past events and persists in the present?
A) Hyperinflation
B) Sogflation
C) Built-in inflation
D) Biflation
Correct Answer: Built-in inflation
   
180) Consider the following services/ goods
1. Universalisation of Secondary Education.
2. Cleaning of Ganga and Yamuna Rivers.
3. Polio Vaccination.
Which of the services/goods given above are merit goods of an economy?
A) 1 and 2
B) 1 and 3
C) 2 and 3
D) All of these
Correct Answer: All of these