demand & supply, profit loss, inflation & price index section 3 MCQ Questions & Answers Detailed Explanation

Question : 1

Many times we read a term “Free Market” in newspapers. What does it mean?

1. It is a market where pricing is driven by the laws of supply and demand.
2. In free market things are available without restraints of the government.
3. In such market, goods are free from extraneous influences such as buffer or quotas.

a) only 3

b) only 1

c) only 2

d) Both 1 and 2

Question : 2

When economic development takes place

a) Market imperfections increase

b) Specialisation increases

c) Commercialisation decreases

d) None of the above

Question : 3

The term stagflation refers to a situation where

a) rate of growth is faster than the rate of price increase

b) growth has no relation with the change in price

c) rate of growth and prices both are decreasing

d) rate of growth is slower than the rate of price increase

Question : 4

In India, inflation is measured by the :

a) consumers price Index for agricultural

b) wholesale price Index Number

c) consumers price Index for urban non-manual workers

d) National Income Deflation

Question : 5

Assertion (A):
The rate of inflation in India has come down in the last three years.
Reason (R):
The country has received a large amount of foreign capital during these years.

a) (A) is true, but (R) is false

b) (A) is false, but (R) is true

c) Both (A) and (R) are true and (R) is the correct explanation of (A)

d) Both (A) and (R) are true, but (R) is not the correct explanation of (A)

Question : 6

Gilt-edged market means

a) Market dealing with metals

b) Market of government securities

c) Bullion market

d) Market dealing with exports