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

Question : 1

The base of Consumer Price Index for Industrial Workers is being shifted from 1982 to—

a) 1998

b) 2000

c) 1995

d) 2001

Question : 2

Which one of the following is not a method to control inflation?

a) Reducing the rate of interest

b) Rationing of commodities

c) Controlling the demand

d) Controlling the supply of money

Question : 3

Economic growth is usually coupled with

a) Stagflation

b) Hyper-inflation

c) Deflation

d) Inflation

Question : 4

In view of the fact that kerosene is an inferior good in India, what is/are its implication(s)?

1. As households get richer, they consume less kerosene.
2. Over time there is a decline in quality of kerosene.
3. 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

Question : 5

Inflation in India is measured on which of the following indexes / indicators?

a) Gross Domestic Product (GDP)

b) Cost of Living Index (CLI)

c) Consumer Price Index (CPI)

d) Wholesale Price Index (WPI)

Question : 6

Consider the following actions by the Government:

1. Cutting the tax rates.
2. Increasing the government spending.
3. Abolishing the subsidies.

a) 2 only

b) 1 and 3 only

c) 1, 2 and 3

d) 1 and 2 only