demand & supply, profit loss, inflation & price index section 3 MCQ Questions & Answers Detailed Explanation
MOST IMPORTANT indian economy mcq - 3 EXERCISES
The following question based on Demand & Supply, Profit Loss, Inflation & Price Index topic of indian economy mcq
(a) Gross Domestic Product (GDP)
(b) Cost of Living Index (CLI)
(c) Consumer Price Index (CPI)
(d) Wholesale Price Index (WPI)
The correct answers to the above question in:
Answer: (d)
Inflation in India is measured on the Wholesale Price Index (WPI). The wholesale price index (WPI) is based on the wholesale price of a few relevant commodities or over commodities available.
Cost of Living Index - It is a theoretical price index that measures the relative cost of living over time or regions.
Consumer Price Index - It is a measure that examines the weighted average of prices of a basket of consumer goods & services such as transportation food and medical care.
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Read more demand supply profit loss inflation price index Based Indian Economy Questions and Answers
Question : 1
In view of the fact that kerosene is an inferior good in India, what is/are its implication(s)?
- As households get richer, they consume less kerosene.
- Over time there is a decline in quality of kerosene.
- Government needs to stop subsidies on kerosene.
a) 1 and 2 only
b) 2 and 3 only
c) 1 only
d) 1, 2 and 3
Answer »Answer: (c)
Generally Kerosene is used as fuel by the poor, as they get prosperity, they use little of this fuel.
Question : 2
Inflation is best described as
a) increase in purchasing power
b) increase in price of particular goods
c) high prices
d) increase in price index
Answer »Answer: (b)
Question : 3
The base of Consumer Price Index for Industrial Workers is being shifted from 1982 to—
a) 1998
b) 2000
c) 1995
d) 2001
Answer »Answer: (d)
The base of CPI for industrial worker is being shifted from 1982 to 2001.
Question : 4
Consider the following actions by the Government:
- Cutting the tax rates.
- Increasing the government spending.
- Abolishing the subsidies.
a) 2 only
b) 1 and 3 only
c) 1, 2 and 3
d) 1 and 2 only
Answer »Answer: (d)
Fiscal stimulus - Government measures, normally involving increased public spending and lower taxation are aimed at giving a positive jolt to economic activity.
Question : 5
Brent index is associated with
a) copper future prices
b) gold future prices
c) crude oil prices
d) shipping rate index
Answer »Answer: (c)
Brent Crude is a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide. Brent Crude is extracted from the North Sea and comprises Brent Blend, Forties Blend, Oseberg and Ekofisk crudes.
The Brent Crude oil marker is also known as Brent Blend, London Brent and Brent petroleum.
The index represents the average price of trading in the 25 days Brent Blend, the Forties, Oseberg, Ekofisk (BFOE) market in the relevant delivery month as reported and confirmed by the industry media.
Question : 6
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
Answer »Answer: (b)
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