Inflation Quiz – Question inflation – inflation means


Administered Price means

(a) Prices fixed by private sector under the guidance of government

(b) Prices ford by consumer forums

(c) Prices fived to the Government and private sector

(d)  Price fixed by the Government

Answer (d)

Inflation spiral means

(a) an inter fluctuating trend in the prices 

(b) an upward trend in Prices

(c) evil consequences of inflation

(d) both upward and downward trend in prices

Answer (b)

Which of the following causes retardation in inflationary conditions.

(a) Increase in bard rate

(b) Decrease in budget deficit

(c) Both (a) and (b)

(d) Decrease in unemployment

Answer (c)

Which measure can check inflation ?

(a) Surplus Budgeting

(b) Increase in direct deficit

(c) Curtailment in Public expenditure

(d) all of these

Answer (d)

Inflation is unjust because

(a) it increase economic inequalities

(b)it adversely affects the growth process

(c) It brings about a disequilibrium in balance of trade

(d) It harms the money holders and benefits the assets holders

Answer (a)

When prices increase as per the expectations of people it is known as

(a) Anticipated inflation

(b) Creeping inflation

(c) True inflation

(d)Bottleneck inflation

Answer (a)

Which of the following statements is wrong?

(a) In inflation deficit financing should be reduced

(b) In inflation unproductive public expenditure should be reduced

6) In inflation consumption credit must be reduced

(d) In inflation rates of direct and indirect taxes should be reduced

Answer (d)


(a) makes some people rich and some people poor

(b) makes the rich richer and the poor poorer

(c) makes all the people rich

(d) makes all the people poor in the long run

Answer (d)

Stagflation was observed in India during the period

(a) 1985-1988

(b) 1988-1991


(d) 1991-1994

Answer (d)

In inflation which of the statements would be found to be wrong

(a) Debtors gain and Creditors lose

(b) Exports decrease and Imports increase

(c) Profit earner gain and Wage earners lose

(d) The fixed income earners gain the maximum

Answer (d)

Which of the following plans experienced an excessive increase in prices ?

(a) Fourth plan

(b)Fifth plan

(c) Fifth plan

(d) Sixth Plan

Answer (a)

In inflation the value of local currency in terms of the foreign currency

(a) Increases

(b) Decreases:

(c) is not affected

(d) None of the above

Answer (b)

The government’s agricultural price policy contributes in inflation by

(a) Helping the large farmers

(b) Helping the small and marginal farmers

(c) Helping the landless labourers

(d) Raising procurement prices),

Answer (d)

Monetary measures to control inflation are related to

(a) Control of money supply

(b) Control of commodity prices

(c) Control of prices of imported goods

(d) Control of currency supply and credit

Answer (d)

Why does an economy experience Inflation during prosperity?

(a) Due to rise in employment level

(b) Due to increase in GDP

(c). Due to increase in the real income

(d)All the above

Answer (d)

Value of money depends upon

(a) Prices of goods

(b) Quality of goods

(c) Quantity of goods

(d) All the throe

Answer (d)

When prices are artificially controlled it is known as

(a) Price control

(b) Concealed inflation

(c) Suppressed inflation

(d) Structural inflation

Answer (c)

The rate of inflation in India is measured generally in respect of movement in

(a)  Consumer price index

(b) Wholesale price index

(c) Cost of living index for agricultural

(d) Money supply labour

Answer (b)

Inflation Quiz

Inflation in recent years in India has been primarily caused by

(a) Increase in agricultural prices

(b) Expansion in Money supply

(c) Population growth

(d) none of the above

Answer (a)

The value of money varies

(a) directly with the interest rate 60 directly with the volume of

(b) directly with the price level

(c) directly with the volume of employment

(d) inversely with the price level employment

Answer (d)

Cost-push inflation occurs when the aggregate

(a) demand curve shifts rightward

(b) demand curve shafts leftward

(c) supply curve shifts rightward

(d) supply curve shifts leftward

Answer (d)

Which of the following fiscal action is likely to be most effective in curbing inflation?

(a) incurring budget surplus which is used to retire debt held by the public

(b) incurring a budget surplus and allowing that surplus to accumulate as idle treasury balances

(c) incurring a budget surplus which is used to retire debt held by commercial banks

(d) incurring a budget deficit by borrowing from the public

Answer (b)

The real rate of interest is defined as the difference between

(a) the nominal rate of interest and the expected rate of inflation

(b) the nominal rate of interest and market rate of interest

(c)the expected rate of interest and the market rate of interest

(d) the expected rate of interest and the current rate of inflation

Answer (a)

Stagflation denotes a situation in which there is both

(a) unemployment and reflation

(b) unemployment and deflation

(c) unemployment and inflation

(d) unemployment in a growing economy

Answer (c)

In India inflation is due to

(a) Cost push factors

(b) Demand pull factors

(c) Imported factors

(d) All the three

Answer (d)

Definition is undesirable because

(a) It increases value of money

(b) It increases exports of the country

(c) It makes the money holders rich

(d) It brings about a general decrease in income, output and employment

Answer (d)

Inflation has its positive and negative impact on the economy, Which class(es) of people going to be badly affected by running inflation?

(a) Creditors


(c) Fixed -Income Security Investors

(d) All the above

Answer (d)

In inflation people feel that their incomes are rising though they do not rise in real terms due to

(a) Illiteracy of people

(b) Their money wages are rising

(b) Absence of knowledge of economies

(d) Money illusion

Answer (d)

When prices rise due to increase in cost of production as a result of rising factor prices knows

(a) Structural inflation

(b) Sectoral inflation

(c) Hyper inflation

(d) Cost push inflation

Answer (d)

When prices keep on rising at a very high rate it is known as

(a) High inflation

(b) True inflation

(c) Hyper inflation

(d) Bottleneck inflation

Answer (c)

Inflation means

(a) A continuous increase in prices

(b) A General and cumulative increases Prices

(c) A steady and significant increases prices

(d) All the three

Answer (d)

Demand pull inflation is the result of

(a) A disequilibrium between aggregate demand and aggregate supply

(b) An excessive increases in money supply

(c) A continuous increase in demand

(d) All the three

Answer (d)

Deflation means

(a) A continuous fall in prices

(b) A continuous increase in real purchasing power

(c) A continuous increase in value of money

(d) All the three

Answer (a)

Stagflation takes place when

(a) Economy is stagnant

(b) Employment is rising

(c) Output is rising

(d) Unemployment coexists side by side the rising prices

Answer (d)

Inflation Quiz

The first five year plan witnessed

(a) rising prices

(b) steady prices

(c) falling prices

(d) None of these

Answers (c)

In India the prices started rising from

(a) The second five year plan

(b) The Fourth five year plan

(c) The Third live year plan

(d) The Fifth five year plan

Answer (a)

When too much money chases too few goods, the resulting inflation is called______

(a) deflation

(b) demand-pull inflation

(c) cost-push inflation

(d) stagflation

Answer (b)

Inflation Quiz

The combined phenomenon of stagnation and inflation is called _____

(a) demand-pull inflation

(b) cost-push inflation

(c) money inflation.

(d) stagflation

Answer (d)

When do the fixed income earners benefit the most, in ____

(a) inflation

(b) deflation

(c) stagflation

(d) depression

Answer (b)

When the government tries to meet the gap of public expenditure and public revenue through borrowing from the banking system, it is called ………….

(a) deficit financing.

(b) credit financing

(c) debt financing

(d) none of the above.

Answer (a)

Inflation Quiz, Inflation question

Read More 


Balance of payments

Leave a Comment

error: Content is protected !!