demand & supply, profit loss, inflation & price index section 2 MCQ Questions & Answers Detailed Explanation

Question : 1

During period of inflation, rates should

a) Remain constant

b) Increase

c) Decrease

d) Fluctuate

Question : 2

Inflation rate based on consumer price index increases if

a) Statutory Liquidity ration is increased

b) Repo rate is increased

c) Bank rate is decreased

d) Reverse repo rate is decreased

Question : 3

Assertion (A) :
Investment has a demand effect.

a) (A) is correct, but (R) is incorrect.

b) Both (A) and (R) are correct, and (R) is the correct explanation of (A).

c) Both (A) and (R) are correct, but (R) is not the correct explanation of (A).

d) (A) is incorrect, but (R) is correct.

Question : 4

The basis of determining dearness allowance (D.A.) to government employees in India is

a) Standard of living

b) National income

c) Consumer Price Index

d) Per capita income

Question : 5

Which of the following statements are correct?

1. When marginal revenue is positive, total revenue increases with increase in output.
2. When marginal revenue is zero, total revenue is maximum.
3. When marginal revenue becomes negative, total revenue falls with increase in output.

a) 2 and 3 only

b) 1 and 3 only

c) 1 and 2 only

d) 1, 2 and 3

Question : 6

Consider the following statements in regard to the Money market in India:

1. It is a market for short-term funds with maturity ranging from overnight to one year.
2. It acts as an instrument of liquidity adjustment for the Central Bank.

a) Both 1 and 2

b) 1 only

c) 2 only

d) Neither 1 nor 2