Banking sector - Inflation and RBI - MCQs with answers - Part 1
1. Which of the following is a reason for inflation?a. Deficit financing
b. Growth in per capita income
c. Structural deficiencies
d. All the above
View Answer / Hide AnswerANSWER: d. All the above
Inflation refers to rise in the general price level in the economy. Various demand and supply side factors cause inflation.
a. Erosion in purchasing power
b. Affects relative price of goods
c. Increase in inequalities of income
d. All the above
View Answer / Hide AnswerANSWER: d. All the above
As a result of inflation, some sections like producers or big landlords gain due to the ownership of assets, income inequality increases.
i. Government can reduce indirect taxes to control inflation
ii. There is trade-off between growth and inflation in India
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: c. both
Growth cannot be sustained in inflationary situation for a long time and inflation is bound to be high with high growth rates.
a. Increase in administered prices
b. Increase in cost of capital
c. More dependence on indirect taxes for revenue
d. None of these
View Answer / Hide AnswerANSWER: d. None of these
Inflation refers to rise in the general price level in the economy. Various demand and supply side factors cause inflation.
a. Control on public expenditure
b. Control on hoarding and black marketing
c. Effective control on credit
d. All the above
View Answer / Hide AnswerANSWER: d. All the above
Inflation can be controlled using monetary, fiscal and other measures.
i. For measuring overall inflation in the economy, CPI is used.
ii. WPI was first published in 1942 for 23 commodities
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: b. ii only
For measuring overall inflation in the economy, WPI is used. WPI was first published in 1942 for 23 commodities.
a. 1993-94
b. 2001-02
c. 2004-05
d. 2014-15
View Answer / Hide AnswerANSWER: c. 2004-05
The base year used for WPI is 2004-05, based on the recommendations of Abhijit Sen Committee.
i. There are 676 items divided into 3 parts in the WPI
ii. All the 3 parts are given equal weightage
a. i only
b. ii only
c. both
d. none
View Answer / Hide AnswerANSWER: a. I only
Primary articles constitute 20.12 weightage, fuel has weightage of 14.91 while manufactured items have 64.97 weightage.
a. Primary articles
b. Fuel
c. Manufactured items
d. Equal weightage
View Answer / Hide AnswerANSWER: c. Manufactured items
Primary articles constitute 20.12 weightage, fuel has weightage of 14.91 while manufactured items have 64.97 weightage.
a. 2001
b. 1994
c. 1991
d. 2004
View Answer / Hide AnswerANSWER: a. 2001
The base year to calculate CPI-IW is 2001. 260 items are included in the index.
