This quiz works best with JavaScript enabled. Home > Economics > Monetary > Currency > Currency And Inflation – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Currency And Inflation Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Inflation implies: [Railways 1994] A) Rise in prices of consumer goods. B) Rise in budget deficit. C) Rise in general price index. D) Rise in money supply. Show Answer Correct Answer: C) Rise in general price index. 2. Which of the following factors contributes to an inflationary trend? A) 15% fall in production of industrial goods. B) 15% increase in prices of agricultural products. C) 15% increase in supply of money in the market. D) None of these. Show Answer Correct Answer: C) 15% increase in supply of money in the market. 3. Minimum inflation in post economic reform was in : A) 2001-02. B) 2002-03. C) 1999-2000. D) 2000-01. Show Answer Correct Answer: C) 1999-2000. 4. One-rupee currency notes bear the signature of: A) Prime Minister of India. B) President of India. C) Finance Secretary of India. D) Finance Minister of India. Show Answer Correct Answer: C) Finance Secretary of India. 5. As per FSR, India's share of dollar-denominated debt has been: A) Increasing. B) Falling. C) Remained stagnant. D) Rapidly increasing. Show Answer Correct Answer: B) Falling. 6. SEBI was primarily set up to A) Regulate the activities of the merchant banks. B) To control the operations of mutual funds. C) To work as a regulator of the stock exchange activities. D) All of the above. Show Answer Correct Answer: D) All of the above. 7. Deficit financing creates additional paper currency to fill the gap between expenditure and revenue. This device aims at economic development but if it fails, it generates : [IFS 1990] A) Devaluation. B) Deflation. C) Inflation. D) Demonetization. Show Answer Correct Answer: C) Inflation. 8. As per FSR, Banks have also been drawing down their high-quality-liquid assets (HQLAs) to fund credit growth. This will most likely ..... Liquidity Coverage Ratio (LCR): A) Increase. B) Decrease. C) No Impact on. D) None of the above. Show Answer Correct Answer: B) Decrease. 9. The States' debt does not include: A) Provident Funds. B) Treasury bills issued to international financial institutions. C) Loans from State Bank of India. D) Loans from the Central Government. Show Answer Correct Answer: B) Treasury bills issued to international financial institutions. 10. The effect of inflation on tax revenue results in a situation known as : A) Fiscaldrag. B) Reflation. C) Stagflation. D) Disinflation. Show Answer Correct Answer: A) Fiscaldrag. 11. The period of high inflation and low economic growth is termed as: [RRB 1992] A) Stagnation. B) Take-off stage in economy. C) Stagflation. D) None of these. Show Answer Correct Answer: C) Stagflation. 12. Which of the following accounts for Cost-Push Inflation? A) Increase in indirect taxation. B) Increase in non-plan expenditure. C) Increase in population. D) Increase in money supply. Show Answer Correct Answer: A) Increase in indirect taxation. 13. Which of the following can be used for checking inflation temporarily? A) Increase in wages. B) Decrease in money supply. C) Decrease in taxes. D) None of the above. Show Answer Correct Answer: B) Decrease in money supply. 14. A high rate of inflation tends to worsen balance of payments because: A) Prices of imported goods rise. B) Prices of exported goods rise making exports less competitive. C) Prices of imported goods fall and hence more is imported. D) Prices of exported goods fall and hence less amount is obtained in terms of foreign exchange. Show Answer Correct Answer: B) Prices of exported goods rise making exports less competitive. 15. Amongst the currency quotes USD/JPY, USD/Euro and USD/CAD, which one of the following is referred as the base currency for quotes? [Punjab & Sindh Bank 2011] A) US $. B) JPY. C) Euro. D) CAD. E) None of these. Show Answer Correct Answer: A) US $. 16. For international payments, the Indian currency is linked to : A) American Dollar. B) British Sterling. C) Gold Standard. D) None of the above. Show Answer Correct Answer: A) American Dollar. 17. The best means of saving during inflation is to keep: A) Equity. B) Money. C) Government Bonds. D) Time deposits with Banks. Show Answer Correct Answer: B) Money. 18. As per the latest FSR, Corporate sector leverage, as reflected in debt-to-equity and debt-to-asset ratios, have been: A) Increasing gradually from pandemic lows. B) Decreasing gradually from pandemic lows. C) Remained unchanged from pandemic lows. D) None of the above. Show Answer Correct Answer: A) Increasing gradually from pandemic lows. 19. Among the remedies of inflation we cannot include: A) Lowering bank rate. B) Reducing budgetary deficit. C) Better capacity utilisation. D) An efficient public distribution system. Show Answer Correct Answer: A) Lowering bank rate. 20. What cause of inflation comes from an increase in commodity prices such as oil and wheat, or an increase in wages? A) Cost-push inflation. B) Demand-pull inflation. C) Price-push inflation. D) Supply-pull inflation. E) None of the answers. Show Answer Correct Answer: A) Cost-push inflation. 21. The Financial Stability Report is a: A) Quarterly publication. B) Semi-annual publication. C) Annual publication. D) None of the above. Show Answer Correct Answer: B) Semi-annual publication. 22. "Financialization of commodities" mainly refers to: A) Increased investments in commodity linked ETFs. B) Decreased investments in commodity linked ETFs. C) Reduced Bank's exposure towards commodities traders. D) None of the above. Show Answer Correct Answer: A) Increased investments in commodity linked ETFs. 23. Which of the following is false about NBFC? A) NBFC cannot accept demand deposits. B) NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself. C) Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs. D) NBFC cannot undertake insurance business. Show Answer Correct Answer: D) NBFC cannot undertake insurance business. 24. Which of the following is incorrect about convertibility? A) The exchange rate should be determined by the forces of demand and supply of the currency. B) The exchange rate' would indicate the strength of the economy. C) It would discourage black market transactions. D) The RBI will be a direct player now rather than being an indirect one. Show Answer Correct Answer: D) The RBI will be a direct player now rather than being an indirect one. 25. As per FSR the acceleration in credit growth, is most likely to ..... risk weighted assets: A) Reduce. B) Grow. C) Have no impact on. D) None of the above. Show Answer Correct Answer: B) Grow. 26. Under the Constitution, the power to raise and disburse public funds: A) Has been vested in Union Government. B) Has been divided between the Union and State Governments. C) Has been given to the Finance Commission. D) Has not been given to anyone. Show Answer Correct Answer: B) Has been divided between the Union and State Governments. 27. An essential attribute of inflation is: A) Fall in production. B) Increase in prices. C) Absence of black market. D) Presence of black market. Show Answer Correct Answer: B) Increase in prices. 28. The FSR highlights that the share of fixed assets in total assets remained subdued and at the level observed during H2:2021-22. This most likely indicates that: A) New Private investment is yet to pickup. B) Private debt has increased. C) Households debt has increased. D) New Private investment has picked up. Show Answer Correct Answer: A) New Private investment is yet to pickup. 29. Who among the following is most benefitted from inflation? [IAS 1989] A) Savings Bank Account holders. B) Debtors. C) Government pensioners. D) Creditors. Show Answer Correct Answer: B) Debtors. 30. When was decimal coinage introduced in India? [CDS 2005] A) 1950. B) 1957. C) 1960. D) 1947. Show Answer Correct Answer: B) 1957. ← PreviousNext →Related QuizzesMonetary QuizzesEconomics QuizzesCurrency And Inflation Quiz 1Currency And Inflation Quiz 3 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books