McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .
Chapters
| 1. |
Demand-pull inflation may be caused by: |
| A. | An increase in costs |
| B. | A reduction in interest rates |
| C. | A reduction in government spending |
| D. | An outward shift in aggregate supply |
| Answer» B. A reduction in interest rates | |
| 2. |
Inflation: |
| A. | Always reduces the cost of living |
| B. | Always reduces the standard of living |
| C. | Reduces the price of products |
| D. | Reduces the purchasing power of a Rupee |
| Answer» D. Reduces the purchasing power of a Rupee | |
| 3. |
An increase in injections into the economy may lead to: |
| A. | An outward shift of aggregate demand and demand-pull inflation |
| B. | An outward shift of aggregate demand and cost-push inflation |
| C. | An outward shift of aggregate supply and demand-pull inflation |
| D. | An outward shift of aggregate supply and cost-push inflation |
| Answer» A. An outward shift of aggregate demand and demand-pull inflation | |
| 4. |
According to the Phillips curve, unemployment will return to the natural rate when: |
| A. | Nominal wages are equal to expected wages |
| B. | Real wages are back at long-run equilibrium level |
| C. | Nominal wages are growing faster than inflation |
| D. | Inflation is higher than the growth of nominal wages |
| Answer» B. Real wages are back at long-run equilibrium level | |
| 5. |
What is the cause of inflation? |
| A. | If money supply increases. |
| B. | If the production rate falls. |
| C. | If money supply increases and production falls. |
| D. | Both money supply and production decreases. |
| Answer» C. If money supply increases and production falls. | |
| 6. |
What does the inflation imply? |
| A. | Rise in budget deficit |
| B. | Rise in prices of consumer goods. |
| C. | rise in money supply. |
| D. | Rise in general price index. |
| Answer» D. Rise in general price index. | |
| 7. |
How the inflation can be checked temporarily? |
| A. | Increase in money supply |
| B. | Decrease in money supply |
| C. | Increase in wages |
| D. | Decrease in Tax |
| Answer» B. Decrease in money supply | |
| 8. |
Which groups are not protected from inflation? |
| A. | Industrial worker |
| B. | Agricultural farmers |
| C. | Government pensioners |
| D. | Saving bank account holders |
| Answer» B. Agricultural farmers | |
| 9. |
Which of the following cannot be included among the remedies of inflation? |
| A. | Better capacity utilization |
| B. | by making low bank rate |
| C. | by reducing budget deficit |
| D. | by making high bank rate |
| Answer» B. by making low bank rate | |
| 10. |
What is Cost-Push inflation? |
| A. | Increasing money supply |
| B. | Increasing indirect tax |
| C. | Population increase |
| D. | expenditure increase unnecessarily. |
| Answer» B. Increasing indirect tax | |
| 11. |
Inflation is the state in which .............................. |
| A. | The value of money decreases |
| B. | The value of money increases |
| C. | The value of the money increases first and then decreases |
| D. | The value of money decreases first and increases later |
| Answer» A. The value of money decreases | |
| 12. |
Which of the following class will not be negatively affected by the higher inflation? |
| A. | The consumer class |
| B. | The debtor class |
| C. | Pensioner class |
| D. | Business class |
| Answer» D. Business class | |
| 13. |
Which of the following is an effect of inflation? |
| A. | Erosion in purchasing power |
| B. | Affects relative price of goods |
| C. | Increase in inequalities of income |
| D. | All the above |
| Answer» D. All the above | |
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