demand & supply, profit loss, inflation & price index section 1 MCQ Questions & Answers Detailed Explanation

Question : 1

Which one of the following is the act of stimulating the economy by increasing the money supply or by reducing taxes ?

a) Inertial inflation

b) Disinflation

c) Reflation

d) Inflation hedge

Question : 2

Which of the following would cause the aggregate demand curve to shift to the right?

a) an increase in real interest rates

b) an appreciation of the American dollar

c) an increase in purchases by the federal government

d) a decrease in the money supply

Question : 3

With reference to India, consider the following statements.

1. The Wholesale Price Index (WPI) in India is available on a monthly basis only.
2. As compared on Consumers Price Index for Industrial Workers [CPI(IW)] the WPI gives less weight to food articles.

a) Both 1 and 2

b) Neither 1 nor 2

c) Only 1

d) Only 2

Question : 4

The acronym SRO, being used in the capital market for various market participants, stands for which one of the following?

a) Securities Roll-back Operators

b) Self Regulatory Organisations

c) Small Revenue Operators

d) Securities Regulatory Organisations

Question : 5

In India, in the overall Index of Industrial Production, the indices of eight core industries have a combined weight of 37-90%. Which of the following are among those eight core industries?

1. Cement
2. Fertilisers
3. Natural gas
4. Refinery products
5. Textiles

a) Only 1, 2, 3 and 4

b) 1, 2, 3, 4 and 5

c) Only 1 and 5

d) Only 2, 3 and 4

Question : 6

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

a) It is the impact of the price levels of previous year on the calculation of inflation rate

b) None of the statements (A), (B) and (C) given above is correct in this content

c) It is the impact of drastic deficiency in supply due to failure of crops

d) It is the impact of the surge in demand due to rapid economic growth