//
VisionIAS - Online Self Test
Vision-IAS Logo
*
Questions for practice
1)

Which of the following can be a way to control inflation for certain commodities?

  1. Reducing import duty
  2. Increasing Minimum Export Price
  3. Increasing the limit of export quota

Select the correct answer using the code given below.

(a)1 and 2 only

(b)1 and 3 only

(c)2 and 3 only

(d)1, 2 and 3

2)

Increasing unemployment and inflation is a situation of :

(a)Hyperinflation

(b)Deflation

(c)Stagflation

(d)Reflation

3)

Which of the following can cause Inflation?

  1. Import dependence.
  2. Black Marketing
  3. Cartelization

Select the correct answer using the given codes below:

(a)2 only

(b)1 and 2 only

(c)1 and 3 only

(d)1,2, and 3

4)

Which one of the following is likely to be the most inflationary in its effect? (Prelims 2013)

(a)Repayment of public debt

(b)Borrowing from the public to finance a budget deficit

(c)Borrowing from banks to finance a budget deficit

(d)Creating new money to finance a budget deficit

5)

Consider the following statements:

  1. Disinflation refers to a situation when inflation is in negative territory.
  2. Deflation refers to a decrease in the rate of inflation.

Which of the statements given above is/are correct? 

(a)1 only

(b)2 only

(c)Both 1 and 2

(d)Neither 1 nor 2

6)

Consider the following factors:

  1. Increase in the money supply
  2. Rising population
  3. A rise in wages and salaries
  4. Hoarding.

Which of the above is/are attributed to the demand-pull factors of inflation?

(a)1, 2 and 3 only

(b)1, 3 and 4 only

(c)2, 3 and 4 only

(d)4 only

7)

Which of the following statements is/are correct with respect to types of Inflation:

  1. Demand-Pull Inflation is caused due to an increase in aggregate demand (AD) in the economy.
  2. Cost-push inflation is caused due to a reduction in aggregate supply (AS).

Select the correct answer from the codes given below:

(a)1 only

(b)2 only

(c)Both 1 and 2

(d)Neither 1 nor 2

8)

Match the List-I with List-II

             List-I                                                 List-II

A. Skewflation                                   1. a relative price rise of one or a group of commodities.

B. Hyper Inflation                              2. The rate of inflation is extreme

C. Creeping inflation                         3. If the rate of inflation is low

D. Deflation                                       4. A persistent decrease in the price level

Select the correct answer using the  codes given below:

(a)A-1, B-2, C-3, D-4

(b)A-4, B-2, C-3, D-1

(c)A-1, B-3, C-2, D-4

(d)A-4, B-3, C-2, D-1

9)

Write a brief note on the following terms (150 words/10 marks)

  1. Skewflation
  2. Disinflation
  3. Stagflation.
  4. Deflation 
10)

What is inflation? Why it is not suggested to print more money to create real asset in the economy? (150 words/10 marks)



Answers
1) a
2) c
3) d
4) d
5) d
6) a
7) c
8) a