demand & supply, profit loss, inflation & price index section 3 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (d)

Hyperinflation occurs when a country experiences very high and usually accelerating rates of monetary and price inflation, causing the population to minimize their holdings of money.

Under such conditions, the general price level within an economy increases rapidly as the official currency quickly loses real value.

Stagflation: Persistent high inflation combined with high unemployment.

Conflation: The merging of two or more sets of information texts, ideas etc into one.

Stealth inflation: It is a type of charge or fee created by the business to gain extra profit and revenue from its customers.

Answer: (c)

Answer: (a)

The Laffer Curve says that, if marginal tax rates fall, tax revenues will rise, and the budget deficit will decrease.

Supply-side economics is a macroeconomic theory that gives economic growth can be most effectively created by investing in capital and by lowering barriers to the production of goods and services.

Answer: (c)

Headline inflation also called as 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: (b)

The gilt-edged market refers to the market for Government and semi-government securities, backed by the Reserve Bank of India (RBI).

Government securities are tradeable debt instruments issued by the Government for meeting its financial requirements. The term gilt-edged means ‘of the best quality’.