introduction to indian economy section 7 MCQ Questions & Answers Detailed Explanation

Answer: (a)

Headline inflation also called WPI inflation is a measure of the total inflation within an economy and is affected by areas of the market which may experience sudden inflationary spikes such as food or energy.

As a result, headline inflation may not present an accurate picture of the current state of the economy as it doesn’t take account of the service sector.

Answer: (d)

Foreign-exchange reserves are assets held by central banks and monetary authorities, usually in different reserve currencies, mostly the United States dollar.

However, the term in popular usage commonly also adds gold reserves, special drawing rights (SDRs), and International Monetary Fund (IMF) reserve positions.

Answer: (b)

Disguised unemployment exists where part of the labour force is either left without work or is working in a redundant manner where worker productivity is essentially zero.

It is unemployment that does not affect aggregate output. When more people are engaged in a job than actually required, a state of disguised unemployment is created.

Disguised, or hidden, unemployment is primarily found in the agricultural and the unorganized sectors of rural India.

Answer: (a)