Types of Inflation and Price Stability CDS Questions

CDS Economy

Types of Inflation and Price Stability MCQ Questions


7.
What is Deflation?
A.
Continuous rise in prices
B.
Persistent fall in the general price level
C.
Temporary reduction in prices
D.
An increase in the cost of production
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ANSWER :
B. Persistent fall in the general price level
8.
Which inflation occurs when the economy operates at full capacity?
A.
Creeping inflation
B.
Demand-pull inflation
C.
Structural inflation
D.
Cost-push inflation
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ANSWER :
B. Demand-pull inflation
9.
What is the difference between Disinflation and Deflation?
A.
Disinflation is a slower rate of inflation, Deflation is falling prices
B.
Both mean the same
C.
Disinflation happens in a growing economy, Deflation happens in a recession
D.
Disinflation affects employment, Deflation does not
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ANSWER :
A. Disinflation is a slower rate of inflation, Deflation is falling prices
10.
Which type of inflation occurs when prices rise at a slow rate over time?
A.
Creeping inflation
B.
Hyperinflation
C.
Stagflation
D.
Galloping inflation
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ANSWER :
A. Creeping inflation
11.
A government budget could be met through either printing of notes or it could be borrowed known as _____ of the government.
A.
Capital
B.
Market borrowings
C.
Expense
D.
Asset
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ANSWER :
B. Market borrowings
12.
Both printing of money as well as market borrowings in India are the major functions of whom?
A.
Reserve Bank of India
B.
World Bank
C.
Bank of Baroda
D.
Asian Development Bank
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ANSWER :
A. Reserve Bank of India