This quiz works best with JavaScript enabled. Home > Economics > Monetary > Currency > Currency And Inflation – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Currency And Inflation Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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. Show Answer Correct Answer: C) Increase in money supply without a corresponding increase in production. 2. Which of the following act defines a Cheque? A) Companies Act 2013. B) RBI Act 1934. C) Negotiable Instrument Act 1881. D) Banking Regulation Act 1949. Show Answer Correct Answer: C) Negotiable Instrument Act 1881. 3. Bank deposit is a non-marketable security AND Government bond is a long-term security. A) TRUE AND TRUE. B) TRUE AND FALSE. C) FALSE AND TRUE. D) FALSE AND FALSE. Show Answer Correct Answer: A) TRUE AND TRUE. 4. Which of the following is least risky? A) Certificate of Deposits. B) Treasury Bills. C) Corporate Bonds. D) Equity. Show Answer Correct Answer: B) Treasury Bills. 5. Hard Currency is defined as currency: A) Which can hardly be used for international transactions. B) Which is used in times of war. C) Which loses its value very fast. D) Traded in foreign exchange market for which demand is persistently relative to the supply. Show Answer Correct Answer: D) Traded in foreign exchange market for which demand is persistently relative to the supply. 6. Which of the following is not an organized sector in India? A) Nationalized Banks. B) Regional Rural Banks. C) Cooperative Banks. D) Chits and Money lenders. Show Answer Correct Answer: D) Chits and Money lenders. 7. Black money is : A) Counterfeit currency. B) Illegally earned money. C) Money earned through underhand deals. D) Income on which payment of tax is usually evaded. Show Answer Correct Answer: D) Income on which payment of tax is usually evaded. 8. As per the latest released FSR, Indian Banking system has remained resilient mainly due to: A) Improvement in profitability. B) Adequate capital buffer. C) High level of non-performing loans. D) None of the above. Show Answer Correct Answer: B) Adequate capital buffer. 9. The cause of inflation is: A) Increase in money supply. B) Fall in production. C) Increase in money supply and fall in production. D) Decrease in money supply and fall in production. Show Answer Correct Answer: C) Increase in money supply and fall in production. 10. 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. Show Answer Correct Answer: A) Containing budgetory deficits and unproductive expenditure. 11. An agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future payment. A) Chit fund. B) Bank. C) Cheque. D) Credit(loan). Show Answer Correct Answer: D) Credit(loan). 12. To meet the growing needs for coins in the country, where does the Government propose to set up another mint? A) Noida. B) Dewas. C) Hoshangabad. D) Nasik. Show Answer Correct Answer: A) Noida. 13. '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. Show Answer Correct Answer: B) Lowering of the value of one currency in comparison of some foreign currency. 14. The latest released FSR refers to Bank for International Settlements (BIS) quarterly review ( Dec 2022). According to the BIS estimates US $ 80 trillion of dollar debt is " missing" , the missing debt as per BIS report is mainly in the form of: A) Private debt. B) Government Bonds. C) Household debt. D) FX Swaps. Show Answer Correct Answer: D) FX Swaps. 15. Inflation can be contained by: A) Surplus budget. B) Increase in taxation. C) Reduction in public expenditure. D) All the above. Show Answer Correct Answer: D) All the above. 16. Which of the following mints undertakes refining of gold for licensed gold dealers and production of medals for defence services? A) The Hyderabad Mint. B) The Mumbai Mint. C) The Kolkata Mint. D) None of the above. Show Answer Correct Answer: B) The Mumbai Mint. 17. If Net capital flows led by foreign portfolio investment (FPI), foreign direct investment (FDI) and trade credit fell short of the funding requirements of CAD, it will result in: A) A depletion of foreign exchange reserves. B) An increase of foreign exchange reserves. C) Unchanged foreign exchange reserves. D) None of the above. Show Answer Correct Answer: A) A depletion of foreign exchange reserves. 18. The inflation experienced in the country at present is: A) Galloping inflation. B) Secondary inflation. C) Unrealistic inflation. D) Cost-push inflation. Show Answer Correct Answer: D) Cost-push inflation. 19. "Scheduled bank" in India means a bank ..... A) Included in the Second schedule to the Reserve Bank of India Act 1934. B) Incorporated under the Companies Act, 1956. C) Authorized to the Banking business. D) Governed by the Banking Regulation Act, 1949. Show Answer Correct Answer: A) Included in the Second schedule to the Reserve Bank of India Act 1934. 20. A steady increase in the general level of prices as a result of excessive increase in aggregate demand as compared to aggregate supply is termed as : [CDS 1999] A) Demand-pull inflation. B) Cost-push inflation. C) Stagflation. D) Structural inflation. Show Answer Correct Answer: A) Demand-pull inflation. 21. Which of the following is not related with Money Market? A) Treasury Bills. B) Shares. C) Certificates of Deposit. D) Commercial Bills. Show Answer Correct Answer: B) Shares. 22. Monetary policy is regulated by: A) Private entrepreneurs. B) Central Bank. C) Government policy. D) Money lenders. Show Answer Correct Answer: B) Central Bank. 23. The situation with increasing unemployment and inflation is termed as: [CPO AC 2003] A) Hyperinflation. B) Galloping inflation. C) Stagflation. D) Reflation. Show Answer Correct Answer: C) Stagflation. 24. Ten rupee notes bear the signature of: A) Governor, Reserve Bank of India. B) Finance Minister. C) President. D) Secretary, Ministry of Finance. Show Answer Correct Answer: A) Governor, Reserve Bank of India. 25. Which of the following groups suffer the most from inflation? [CPO SI 2003] A) Debtors. B) Business class. C) Creditors. D) Holders of real assets. Show Answer Correct Answer: C) Creditors. 26. Stagflation implies a case of: [CDS 1992] A) Galloping inflation. B) Recession plus inflation. C) Adverse balance of trade. D) Rising wages and employment. Show Answer Correct Answer: B) Recession plus inflation. 27. As per the latest FSR, an increase in the value of USD also tend to: A) Decrease inflation by driving up import prices. B) Increase inflation by driving down import prices. C) Decrease inflation by driving down import prices. D) Increase inflation by driving up import prices. Show Answer Correct Answer: D) Increase inflation by driving up import prices. 28. The Issue Department of the RBI maintains a ....... against printing of notes: A) Proportional Gold Reserve System. B) Proportional Reserve System. C) Minimum Reserve System. D) Proportional Foreign Securities Reserve System. Show Answer Correct Answer: C) Minimum Reserve System. 29. Rupee was devalued by what percent in July 1991 ? [MP PCS 1990] A) 20. B) 22. C) 25. D) 18. Show Answer Correct Answer: A) 20. 30. The FSR attributes majority of decline in foreign reserves to: A) Write-off of Foreign currency assets. B) Intervention in FX market. C) Sale of Foreign currency assets. D) Valuation losses. Show Answer Correct Answer: D) Valuation losses. Next →Related QuizzesMonetary QuizzesEconomics QuizzesCurrency And Inflation Quiz 2Currency And Inflation Quiz 3 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books