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

Question : 1

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 : 2

When the prices of commodities, goods and services start declining consistently, the phenomenon is known as

a) Negative growth

b) Discount field

c) Deflation

d) Market capitalism

Question : 3

In calculation of index of wholesale prices, which one of the following sector is assigned maximum weightage?

a) Fuel, power, light and lubricant

b) Manufactured products

c) Food articles

d) Non-food articles

Question : 4

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 : 5

If the average total cost is declining then

a) total cost must be constant

b) the average fixed cost curve must be above the average variable cost curve

c) the marginal cost must be less than the average total cost

d) the marginal cost must be greater than the average total cost

Question : 6

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