Indian Economy – Test Set 11 (Currency and Inflation)

1. Ten rupee notes bear the signature of:
(a) President
(b) Finance Minister
(c) Secretary, Ministry of Finance
(d) Governor, Reserve Bank of India

Ans: (d)

2. Which of the following accounts for Cost-Push Inflation?
(a) Increase in money supply
(b) Increase in indirect taxation
(c) Increase in population
(d) Increase in non-plan expenditure

Ans: (b)

3. The inflation experienced in the country at present is:
(a) galloping inflation
(b) secondary inflation
(c) unrealistic inflation
(d) cost-push inflation

Ans: (d)




4. Which 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) Containing budgetory deficits and unproductive expenditure
(b) Streamlined public distribution system
(c) Enhanced rate of production of all consumer goods
(d) Pursuing an export-oriented strategy

Ans: (a)

5. Of the various ways of financing government’s investment expenditure, the least
inflationary is : [PCS 1994]
(a) foreign aid
(b) deficit financing
(c) taxation
(d) public borrowing

Ans: (c)

6. ‘Devaluation’ means: [RRB 1992]
(a) converting rupee into gold
(b) lowering of the value of one currency in comparison of some foreign currency
(c) making rupee dealer in comparison to some foreign currency
(d) None of these

Ans: (b)

7. Monetary policy is regulated by:
(a) money lenders
(b) Central Bank
(c) private entrepreneurs
(d) Government policy

Ans: (b)




8. One-rupee currency notes bear the signature of:
(a) Prime Minister of India
(b) President of India
(c) Finance Minister of India
(d) Finance Secretary of India

Ans: (d)

9. Inflation is caused as a result of:
(a) increase in money supply
(b) fall in production
(c) increase in money supply without a corresponding increase in production
(d) decrease in money supply without a corresponding decrease in production

Ans: (c)

10. When was the decimal system of currency introduced in India?
(a) 1948
(b) 1950
(c) 1954
(d) 1957

Ans: (d)




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