Indian Economy (Inflation)

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1) What is the current account deficit?

A) The excess of imports over exports

B) The excess of exports over imports

C) The excess of government expenditure over government revenue

D) The excess of government revenue over government expenditure

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2) What is the fiscal deficit?

A) The excess of government expenditure over government revenue

B) The excess of government revenue over government expenditure

C) The excess of government expenditure over government investment

D) The excess of government investment over government expenditure

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3) What is the Gini coefficient?

A) A measure of income inequality

B) A measure of economic growth

C) A measure of inflation

D) A measure of poverty

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4) What is the poverty rate in India?

A) 10%

B) 20%

C) 30%

D) 40%

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5) What is the unemployment rate in India?

A) 2%

B) 4%

C) 6%

D) 8%

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6) What is the economic growth rate of India?

A) 2%

B) 4%

C) 6%

D) 8%

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7) What is the liquidity adjustment facility (LAF)?

A) A facility that allows commercial banks to borrow money overnight from the Reserve Bank of India

B) A facility that allows commercial banks to borrow money overnight from each other

C) A facility that allows the government to borrow money from the Reserve Bank of India

D) A facility that allows the government to borrow money from commercial banks

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8) What is the open market operation (OMO)?

A) The buying and selling of government securities by the Reserve Bank of India

B) The buying and selling of government securities by commercial banks

C) The buying and selling of government securities by the government

D) The buying and selling of government securities by foreign investors

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9) What is the statutory liquidity ratio (SLR)?

A) The fraction of deposits that banks are required to keep with the Reserve Bank of India

B) The fraction of loans that banks are required to keep with the Reserve Bank of India

C) The fraction of deposits that banks are required to keep with each other

D) The fraction of loans that banks are required to keep with each other

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10) What is the cash reserve ratio (CRR)?

A) The fraction of deposits that banks are required to keep with the Reserve Bank of India

B) The fraction of loans that banks are required to keep with the Reserve Bank of India

C) The fraction of deposits that banks are required to keep with each other

D) The fraction of loans that banks are required to keep with each other

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11) What is the reverse repo rate?

A) The rate at which the Reserve Bank of India lends money to commercial banks

B) The rate at which commercial banks lend money to the Reserve Bank of India

C) The rate at which commercial banks lend money to each other

D) The rate at which the Reserve Bank of India lends money to the government

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12) What is the repo rate?

A) The rate at which the Reserve Bank of India lends money to commercial banks

B) The rate at which commercial banks lend money to the Reserve Bank of India

C) The rate at which commercial banks lend money to each other

D) The rate at which the Reserve Bank of India lends money to the government

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13) What is the monetary policy committee (MPC)?

A) A committee that sets interest rates and monetary policy in India

B) A committee that sets fiscal policy in India

C) A committee that sets both monetary and fiscal policy in India

D) A committee that sets foreign policy in India

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14) What is stagflation?

A) A combination of high inflation and high economic growth

B) A combination of low inflation and low economic growth

C) A combination of high inflation and low economic growth

D) A combination of low inflation and high economic growth

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15) What is the fiscal policy used to control inflation?

A) Expansionary fiscal policy

B) Contractionary fiscal policy

C) Monetary policy

D) Both expansionary and contractionary fiscal policy

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16) What is the monetary policy used to control inflation?

A) Expansionary monetary policy

B) Contractionary monetary policy

C) Fiscal policy

D) Both expansionary and contractionary monetary policy

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17) What is the current inflation rate in India?

A) 2%

B) 4%

C) 6%

D) 8%

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18) What is the Wholesale Price Index (WPI)?

A) A measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services

B) A measure of the average change over time in the prices paid by rural consumers for a market basket of consumer goods and services

C) A measure of the average change over time in the prices paid by all consumers for a market basket of consumer goods and services

D) A measure of the average change over time in the prices paid by producers for a market basket of goods and services

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19) What is the Consumer Price Index (CPI)?

A) A measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services

B) A measure of the average change over time in the prices paid by rural consumers for a market basket of consumer goods and services

C) A measure of the average change over time in the prices paid by all consumers for a market basket of consumer goods and services

D) A measure of the average change over time in the prices paid by industrial consumers for a market basket of consumer goods and services

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20) What is deflation?

A) A very high rate of inflation

B) A very low rate of inflation

C) A stable rate of inflation

D) A decrease in the overall price level of goods and services

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21) What is hyperinflation?

A) A very high rate of inflation

B) A very low rate of inflation

C) A stable rate of inflation

D) No inflation

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22) What is cost-push inflation?

A) When there is an increase in aggregate demand

B) When there is a decrease in aggregate demand

C) When there is an increase in the cost of production

D) When there is a decrease in the cost of production

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23) What is demand-pull inflation?

A) When the government increases taxes

B) When the government decreases spending

C) When there is an increase in aggregate demand

D) When there is a decrease in aggregate demand

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24) Which of the following is NOT a cause of inflation?

A) Demand-pull inflation

B) Cost-push inflation

C) Hyperinflation

D) Deflation

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25) What is inflation?

A) A decrease in the overall price level of goods and services

B) An increase in the overall price level of goods and services

C) A decrease in the overall supply of goods and services

D) An increase in the overall supply of goods and services

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Indian Economy (Inflation)