money supply, banking & financial institutions section 5 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 6

A rise in ‘SENSEX’ means:

a) a rise in prices of shares of all companies registered with Bombay Stock Exchange

b) an overall rise in prices of shares of group up companies registered with Bombay Stock Exchange

c) a rise in prices of shares of all companies registered with National Stock Exchange

d) a rise in prices of shares of all companies belonging to a group of companies registered with Bombay Stock Exchange

Question : 7

Which one among the following is an appropriate description of deflation?

a) It is a persistent recession in the economy

b) it is a sudden fall in the value of a currency against other currencies

c) It is a persistent fall in the general price level of goods and services

d) It is fall in the rate of inflation over a period of time

Question : 8

Which one of the following governmental steps has proved relatively effective in controlling the double digit rate of inflation in the Indian economy during recent years?

a) enhanced rate of production of all consumer goods

b) pursuing an export oriented strategy

c) streamlined public distribution system

d) containing budgetary deficit and unproductive expenditure

Question : 9 [SSC SO 2006]

Inflation occurs when aggregate supply is

a) equal to aggregate demand

b) None of these

c) more than aggregate demand

d) less than aggregate demand

Question : 10

Consider the following statements regarding the “Monetary Policy” followed by RBI:

1. It follows a flexible inflation target
2. While inflation is in control, RBI can focus on growth
3. Financial Stability is the explicit mandate of monetary policy
4. Achieving monetary policy objectives will ensure financial stability

a) (i) & (ii) only

b) (ii) & (iv)

c) (i) only

d) (ii), (iii) & (iv)