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

Question : 1

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 the price levels of previous year on the calculation of inflation rate.

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

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

d) None of the statements given above is correct.

Question : 2

An expression coined by economists to describe an economy that is growing at such a slow pace that more jobs are being lost than are being added

a) Growth Recession

b) Ratchet Inflation

c) Stagflation

d) Recession

Question : 3

Which of the following is included in M1?

a) stock

b) gold

c) checkable deposits

d) credit cards

Question : 4

Which of the following is not seen as an advantage of the gold standard?

a) No country needs to serve at the centre of this fixed exchange rate system.

b) For a given stock of gold, a rise in real money supply can only occur if the price level declines.

c) Inflation is unlikely to emerge as a significant problem.

d) The monetary mechanism has credibility.

Question : 5

RESIDEX, an index of residential prices in India, was launched in the year

a) 2007

b) 2008

c) 2001

d) 2004

Question : 6

Disinvestment is :

a) Increase in investment.

b) Offloading of shares of private companies to government.

c) Off-loading of government shares to private companies.

d) Closing down of business concerns.