Inflation Problem And Policies CBSE Questions & Answers

Inflation Problem And Policies

This is Economics Class 11 Inflation Problem and Policies CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
A good that cost rs 100 in may 2007 cost 125 by may 2008 what is the rate of inflation
  • A
    0.25
    Correct
  • B
    0.5
  • C
    0.75
  • D
    0.9
2
Which of the following is an example of hyperinflation
  • A
    Value of money fall by 4 %
  • B
    Both
  • C
    Price of goods rise by 2000 %
    Correct
  • D
    None
3
A situation when price and unemployment rise together
  • A
    Recession
  • B
    Galloping inflation
  • C
    Hyperinflation
  • D
    Stagflation
    Correct
4
While construction e RPI which is not used
  • A
    Exchange rate
  • B
    Bucket of commodities
  • C
    Base year
    Correct
  • D
    Weight
5
Long run solution of inflation lies in
  • A
    Both
  • B
    Controlling demand
  • C
    None
  • D
    Enhancing supply
    Correct
6
Which of the following action of govt not lead to inflation
  • A
    Printing new currency notes
  • B
    Increase in govt expenditure
  • C
    Passing strict environment law
    Correct
  • D
    Increase in interest rate
7
Doses not cause inflation
  • A
    Inc in cost of production
  • B
    Depreciation on the value of currency
  • C
    Inc in aggregate demand
  • D
    Increased taxes
    Correct
8
Which is mostly likely to suffer due to inflation
  • A
    None
  • B
    Importers
  • C
    Debtors
  • D
    Pensioners
    Correct
9
Who is likely to gain from inflation
  • A
    Non-unionised workers
  • B
    Pensioners
  • C
    Debtors
    Correct
  • D
    None
10
Which is not true about inflation
  • A
    Nominal income increase
    Correct
  • B
    None
  • C
    Real increase fall
  • D
    Purchasing power fall
11
Inflation affects people adversely because:
  • A
    Inflation causes money to lose its value over time if the overall price level is rising
    Correct
  • B
    Purchasing power tends to increase during inflation
  • C
    Nominal income falls during inflation
  • D
    Budget deficit increasing during inflation
12
Which of the following does NOT come under the rubric of fiscal policy?
  • A
    Government purchases of goods and services
  • B
    Changes in the money supply
    Correct
  • C
    Taxes
  • D
    Government transfers
13
Monetary neutrality implies that in the long run:
  • A
    Both
    Correct
  • B
    None
  • C
    Aggregate demand is independent from monetary policy
  • D
    Aggregate supply is independent from monetary policy
14
"Too much money chasing too few goods" best describes:
  • A
    Demand-pull inflation
    Correct
  • B
    The inflation premium
  • C
    Cost-push inflation
  • D
    The GDP gap
15
Cost-push inflation
  • A
    Is a mixed blessing because it has positive effects on real output and employment.
  • B
    Is caused by excessive total spending
  • C
    Moves the economy inward from its production possibilities curve
    Correct
  • D
    Shifts the nation's production possibilities curve leftward