E For F&b Chap3: Inflation

30 Questions | By Maihoa.cam | Updated: Apr 10, 2020 | Attempts: 36

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1.

A cause of inflation is:
- A.
  
  Increase in money supply
- B.
  
  Increase in money supply and fall in production
- C.
  
  Fall of production
- D.
  
  Decrease in money supply and fall in production
2.

Inflation brings most benefit to which one of following:
- A.
  
  Government pensioners
- B.
  
  Creditors
- C.
  
  Saving Bank Account Holders
- D.
  
  Debtors
3.

An essential attribute of inflation is:
- A.
  
  Increase in prices
- B.
  
  Less productions
- C.
  
  Presences of black market
- D.
  
  Absence of black market
4.

Which is correct with respect to inflation?
- A.
  
  Rise in budgets deficit
- B.
  
  Rise in money supply
- C.
  
  Rise in general price index
- D.
  
  Rise in prices of consumer goods
5.

Increasing unemployment and inflation is a situation of:
- A.
  
  Hyperinflation
- B.
  
  Galloping inflation
- C.
  
  Stagflation
- D.
  
  Reflation
6.

A steady increase in general level of prices as a result the aggregate demand is increasing in unsustainable rate as compared to aggregate supply in termed as:
- A.
  
  Cost- push inflation
- B.
  
  Unrealistic inflation
- C.
  
  Secondary inflation
- D.
  
  Demand pull inflation
7.

Why a high rate of inflation tends to worsen balance of payments?
- A.
  
  Prices of imported goods rise
- B.
  
  Prices of imported goods fall and hence more is imported
- C.
  
  Rices of exported good rise making exports less competitiveOption 3
- D.
  
  Prices of exported goods fall and hence less amount is obtained in terms of foreign exchangeOption 4
8.

Out of the various ways of the financing of the government's investment expenditure, which one of the following is a method of inflation control?
- A.
  
  Foreign aid
- B.
  
  Deficit financing
- C.
  
  Taxation
- D.
  
  Public borrowing
9.

The best mean of saving during inflation is to keep:
- A.
  
  Equity
- B.
  
  Money
- C.
  
  Government Bonds
- D.
  
  Time deposits with Banks
10.

Which of following can contain inflation?
- A.
  
  Surplus Budget
- B.
  
  Increase in taxation
- C.
  
  Reduction in public expenditure
- D.
  
  All the above
11.

Increasing prices related to:
- A.
  
  Generation of black money
- B.
  
  Adverse effect on speculation
- C.
  
  Promotion of inequalities
- D.
  
  Adverse effect on balance of payment
12.

Which of the following is not a remedy of inflation?
- A.
  
  Lowering bank rate
- B.
  
  Reducing budget deficit
- C.
  
  Better capacity utilization
- D.
  
  An efficient public distribution system
13.

Cheap money implies:
- A.
  
  Low rates of interest
- B.
  
  Low level of saving
- C.
  
  Low level of income
- D.
  
  Excess of bank money
14.

In term of economics, the small gap between the first recession and the second recession is:
- A.
  
  Double Deflation
- B.
  
  Deflation
- C.
  
  Deep recession
- D.
  
  Double Dip recession
15.

Deficit financing creates additional paper currency to fill the gap between expenditure and revenue. This device aims at economic development but if it falls. It generates :
- A.
  
  Inflation
- B.
  
  Devaluation
- C.
  
  Deflation
- D.
  
  Demonetisation
16.

Which of the following are definite implications of a fall in inflation ? I)Price have fallen II)Prices are increasing more slowly than before III)Food supply has increased IV)There is industrial stagnation
- A.
  
  I
- B.
  
  I & III
- C.
  
  II
- D.
  
  I,III & IV
17.

Among the causes of inflation can be listed : I)slow growth in agricultural output II)increasing non- development expenditure of Government III)rapid population growth IV)rapid growth of costly imports
- A.
  
  I & II
- B.
  
  II & III
- C.
  
  I,II,III & IV
- D.
  
  I & IV only
18.

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
19.

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
20.

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 Runway inflation
- C.
  
  Inflation coupled with recession
- D.
  
  Inflation that usually prevails in a developing country
21.

The combination of a successful wage push by workers and the government’s commitment to high employment leads to
- A.
  
  Demand-pull inflation
- B.
  
  Supply-side inflation
- C.
  
  Supply-shock inflation
- D.
  
  Cost-push inflation
22.

Which of the following is wrongly matched ?
- A.
  
  Depression: Insufficient demand causing large sale unemployment of men and machinery over a long period of time
- B.
  
  Stagflation :slow pace of economic activity due to falling prices
- C.
  
  Recession : Reduction in demand and production /investment over a short period off time
- D.
  
  Boom :Rapid and all round spurt in economic activity
23.

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 term of foreign exchange
24.

The effect of inflation on tax revenue results in a situation known as :
- A.
  
  Stagflation
- B.
  
  Fiscaldrag
- C.
  
  Reflation
- D.
  
  Disinflation
25.

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