CLASS ASSIGNMENT ( REVISION )
1. High inflation levels in the economy leads to _______ in the supply of money.
a. Increase
b. Decrease
c. No change
d. None of the above
2. ______ compared inflation with robbers.
a. Amartya Sen
b. Professor Brahmand and Wakeel
c. Professor Jagdish Bhagwati
d. Professor Key
3. Which of the following concepts is the opposite of inflation?
a. Deflation
b. Stagflation
c. Recession
d. None of the above
4. A government resorts to __________ to reduce inflation.
a. Cuts in government spending
b. Increase in government expenditure
c. Reduction in repo rate
d. None of the above
5. When the price levels of goods and services are falling continuously, this
phenomenon is called _________.
a. Deflation
b. Stagflation
c. Inflation
d. None of the above
6. If too much money is chasing too few goods, the resulting inflation is known as
__________.
a. Stagflation
b. Cost-push inflation
c. Demand-pull inflation
d. None of the above
7. The main causes of inflation in India are ___________.
a. The inadequate rise in industrial production
b. Erratic agricultural growth
c. Deficit financing
d. All of the above
8. _____ is an effective method to control inflation in the economy.
a. Cash reserve ratio
b. Selective control of credit
c. Bank rate policy
d. None of the above
9. Inflation is measured by _______.
a. Consumer price index
b. Wholesale price index
c. Marshall’s index
d. None of the above
10. When inflation is a result of an increase in the price of factors of production, the
result is ________.
a. Stagflation
b. Cost-push inflation
c. Demand-pull inflation
d. None of the above
11. The combination of stagnation and inflation is known as _____.
a. Stagflation
b. Cost-push inflation
c. Demand-pull inflation
d. None of the above
12. When the central government reduces the value of the domestic currency in terms
of foreign currency, this phenomenon is called ______.
a. Depreciation
b. Appreciation
c. Devaluation
d. None of the above
13. In the context of inflation control, what does one mean when they say sterilisation
of foreign inflow?
a. Withdrawing an equivalent local currency to maintain the desired rate of
exchange
b. Complying with the regulations for import and export
c. Filtering of the black money within an economy
d. None of the above
14. The Reserve Bank of India (RBI) can take the measure of _________ to control
inflation within the country.
a. Rationing of credit
b. Introducing a progressive tax system
c. Improving profits of the public sector
d. Controlling public expenditure
15. Which one of the following steps taken by the Government of India effectively
controlled the double-digit rate of inflation in the economy in the 1970s?
a. Contain unproductive expenditure and budget deficits
b. Pursue an export-oriented strategy
c. Streamline public distribution system
d. Enhance production of all public goods
16. The purchasing power of money varies ______.
a. Directly with the volume of employment
b. Inversely with the price level
c. Directly with the interest rate
d. Directly with the price level
17. How does inflation help in the redistribution of income?
a. Disproportional change in prices
b. Proportional changes in prices
c. Falling prices
d. Rising prices
18. The item with the maximum weightage in the Wholesale Price Index is _______.
a. Food items
b. Manufactured products
c. Fuel and power
d. None of the above
19. The Consumer Price Index helps to measure the degree to which ___________.
a. Consumer prices have risen relative to the wage level in the economy
b. Distribution of income between two different sets of income recipients at the
same point in time
c. Distribution of income between two different sets of income recipients during
different periods
d. None of the above
20. The share of food items within India’s total consumption expenditure has reduced
within the last two decades because of _________.
a. Increase in people’s income levels
b. The availability of foodgrains has declined in the country
c. Increase in the share of non-food items
d. None of the above
21. High inflation levels in the economy leads to _______ in the supply of money.
a. Increase
b. Decrease
c. No change
d. None of the above
22. ______ compared inflation with robbers.
a. Amartya Sen
b. Professor Brahmand and Wakeel
c. Professor Jagdish Bhagwati
d. Professor Key
23. Which of the following concepts is the opposite of inflation?
a. Deflation
b. Stagflation
c. Recession
d. None of the above
24. A government resorts to __________ to reduce inflation.
a. Cuts in government spending
b. Increase in government expenditure
c. Reduction in repo rate
d. None of the above
25. When the price levels of goods and services are falling continuously, this
phenomenon is called _________.
a. Deflation
b. Stagflation
c. Inflation
d. None of the above
26. If too much money is chasing too few goods, the resulting inflation is known as
__________.
a. Stagflation
b. Cost-push inflation
c. Demand-pull inflation
d. None of the above
27. The main causes of inflation in India are ___________.
a. The inadequate rise in industrial production
b. Erratic agricultural growth
c. Deficit financing
d. All of the above
28. _____ is an effective method to control inflation in the economy.
a. Cash reserve ratio
b. Selective control of credit
c. Bank rate policy
d. None of the above
29. Inflation is measured by _______.
a. Consumer price index
b. Wholesale price index
c. Marshall’s index
d. None of the above
30. When inflation is a result of an increase in the price of factors of production, the
result is ________.
a. Stagflation
b. Cost-push inflation
c. Demand-pull inflation
d. None of the above
31. The combination of stagnation and inflation is known as _____.
a. Stagflation
b. Cost-push inflation
c. Demand-pull inflation
d. None of the above
32. When the central government reduces the value of the domestic currency in terms
of foreign currency, this phenomenon is called ______.
a. Depreciation
b. Appreciation
c. Devaluation
d. None of the above
33. In the context of inflation control, what does one mean when they say sterilisation
of foreign inflow?
a. Withdrawing an equivalent local currency to maintain the desired rate of
exchange
b. Complying with the regulations for import and export
c. Filtering of the black money within an economy
d. None of the above
34. The Reserve Bank of India (RBI) can take the measure of _________ to control
inflation within the country.
a. Rationing of credit
b. Introducing a progressive tax system
c. Improving profits of the public sector
d. Controlling public expenditure
35. Which one of the following steps taken by the Government of India effectively
controlled the double-digit rate of inflation in the economy in the 1970s?
a. Contain unproductive expenditure and budget deficits
b. Pursue an export-oriented strategy
c. Streamline public distribution system
d. Enhance production of all public goods
36. The purchasing power of money varies ______.
a. Directly with the volume of employment
b. Inversely with the price level
c. Directly with the interest rate
d. Directly with the price level
37. How does inflation help in the redistribution of income?
a. Disproportional change in prices
b. Proportional changes in prices
c. Falling prices
d. Rising prices
38. The item with the maximum weightage in the Wholesale Price Index is _______.
a. Food items
b. Manufactured products
c. Fuel and power
d. None of the above
39. The Consumer Price Index helps to measure the degree to which ___________.
a. Consumer prices have risen relative to the wage level in the economy
b. Distribution of income between two different sets of income recipients at the
same point in time
c. Distribution of income between two different sets of income recipients during
different periods
d. None of the above
40. The share of food items within India’s total consumption expenditure has reduced
within the last two decades because of _________.
a. Increase in people’s income levels
b. The availability of foodgrains has declined in the country
c. Increase in the share of non-food items
d. None of the above