Q1. Which of the following is a reason for inflation?
1) Deficit financing
2) Growth in per capita income
3) Structural deficiencies
4) All the above
5) None of these
Answer-4
Q2. An increase in aggregate demand is more likely to lead to demand-pull inflation if:
1) Aggregate supply is perfectly elastic
2) Aggregate supply is perfectly inelastic
3) Aggregate supply is unit elastic
4) Aggregate supply is relatively elastic
5) All the above
Answer-1
Q3. According to the Phillips curve, unemployment will return to the natural rate when:
1) Nominal wages are equal to expected wages
2) Real wages are back at long-run equilibrium level
3) Nominal wages are growing faster than inflation
4) Inflation is higher than the growth of nominal wages
5) Inflation is lower than the nominal wages
Answer-2
Q4. The Phillips curve shows the relationship between inflation and what?
1) The balance of trade
2) The rate of growth in an economy
3) The rate of price increases
4) Unemployment
5) Employment
Answer-4
Q5. Low inflation is characterized by which of the following:
1) People trust money.
2) Prices rising slowly and predictably.
3) People are willing to write long-term contracts in money terms.
4) All of the above.
5) None of these
Answer-3
Q6. The period of high inflation, low economic growth and high unemployment is termed as :
1) Stagnation
2) Take-off stage in economy
3) Stagflation
4) Recession
5) Skewflation
Answer-3
Q7. Suppose that the economy is at full employment and aggregate demand increases by more than it is anticipated to increase. Other things remaining the same, ________.
1) Real GDP remains at potential GDP
2) Long-run aggregate supply decreases
3) Real GDP increases above potential GDP
4) Real GDP decreases below potential GDP
5) Long run aggregate supply increases
Answer-3
Q8. Cost-push inflation can start with
1) An increase in oil prices.
2) A decrease in the quantity of money.
3) An increase in government expenditures.
4) A decrease in investment.
5) A decrease in money supply
Answer-1
Q9. The base year to calculate CPI-IW is
1) 2001
2) 1994
3) 1991
4) 2004
5) 2006
Answer-1
Q10. The base year to calculate CPI-UNME is
1) 1980-81
2) 2001-02
3) 2003-04
4) 1984-85
5) 1987-88
Answer-4
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