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

Question : 21

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 : 22 [CDS-2015-II]

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 : 23 [RAS/RTS (Pre) 1996]

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

Question : 24

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

a) 1998

b) 2000

c) 1995

d) 2001

Question : 25 [PSC (Pre) 1996]

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