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

Answer: (a)

An increase in absolute and per capita real GNP do not connote a higher level of economic development, if poverty and unemployment also increase, because this means the growth is not inclusive. The benefits of economic development are not reaped by many and growing inequality will rise. 

Answer: (b)

Answer: (c)

In order to curb inflation if CRR is increased, then it may take liquidity from markets as banks will have to deposit more money with RBI.

Moreover, inflation may also be curbed by Permitting Central/State agencies to import duty-free pulses and sugar.

However, Decreasing SLR will leave more money to banks to give loans, which in turn will lead to inflation.

Answer: (a)

Answer: (a)

In Order to help the farmers in getting remunerative prices for their produce with a view to encouraging higher investment and also to increase production and productivity of a commodity, the government declares Minimum Support Price (MSPs) for 25 notified agricultural commodities for each Kharif & Rabi crop season.

National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) is one of the Central Nodal Agencies which implements PSS.

Answer: (d)

Inflation is a persistent increase in the general price level of goods and services in an economy over a period of time.

When the general price level rises, each unit of currency buys fewer goods and services.

Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value.

High inflation means the excessive supply of money and thus leads to a rise in the cost of credit and interest rates.

Higher inflation leads to a reduction in economic growth, a decrease in the cost of credit, increase in spending rather than saving as the value of money is declining.