INFLATION : PREVIOUS YEAR QUESTIONS :: ECONOMICS

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2011

Economic growth is usually coupled with:

(a) Deflation

(b) Inflation

(c) Stagflation

(d) Hyperinflation

b

 

A rapid increase in the rate of inflation is sometimes attributed to the “base effect”. What is “base effect”?

(a) It is the impact of drastic deficiency in supply due to failure of crops.

(b) It is the impact of the surge in demand due to rapid economic growth.

(c) It is the impact of the price levels of previous year on the calculation of inflation rate.

(d) None of the statements (a ), (b ) and (c  ) given above is correct in this context.

c

 

India has experienced persistent and high food inflation in the recent past. What could be the reasons?

1. Due to a gradual switchover to the cultivation of commercial crops, the area under the cultivation of food grains has steadily decreased in the last five years by about 30%.

2. As a consequence of increasing incomes, the consumption patterns of the people have undergone a significant change.

3. The food supply chain has structural constraints.

Which of the statements given above are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

b

 

 

2012

Which of the following measures would result in an increase in the money supply in the economy?

  1. Purchase of government securities from the public by the Central Bank.
  2. Deposit of currency in commercial banks by the public.
  3. Borrowing by the government from the Central Bank.
  4. Sale of government securities to the public by the Central Bank.

Select the correct answer using the codes given below.

(a) 1 only

(b) 2 and 4 only

(c) 1 and 3

(d) 2, 3 and 4

c

 

2013

Supply of money remaining the same when there is an increase in demand for money, there will be

(a) a fall in the level of prices

(b) an increase in the rate of interest

(c) a decrease in the rate of interest

(d) an increase in the level of income and employment

b

 

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) Borrowings from banks to finance a budget deficit.

(d) Creating new money to finance a budget deficit.

d

 

A rise in general level of prices may be caused by

1. an increase in the money supply

2. a decrease in the aggregate level of output

3. an increase in the effective demand

Select the correct answer using the codes given below.

(a) 1 only

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

d

 

Consider the following statements:

  1. Inflation benefits the debtors.
  2. Inflation benefits the bond-holders.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

a

 

2015

Which of the following brings out the ‘Consumer Price Index Number for the Industrial Workers’?
a) The Reserve Bank of India
b) The Department of Economic Affairs
c) The Labour Bureau
d) The department of Personnel and Training
Solution: c)

 

Which reference to inflation in India, which of the following statements is correct?
a) Controlling the inflation in India is the responsibility of the Government of India only
b) The Reserve Bank of India has no role in controlling the inflation
c) Decreased money circulation helps in controlling the inflation
d) Increased money circulation helps in controlling the inflation
Solution: c)

 

2020

Consider the following statements:

1. The weightage of food in Consumer Price Index(CPI) is higher than that in Wholesale Price Index(WPI).

2. The WPI does not capture changes in the prices of services, which CPI does.

3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.

Which of the statements given above is/are correct ?

(a) 1 and 2 only

(b) 2 only

(c) 3 only

(d) 1,2 and 3

Answer: A

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