Currency and Inflation - General Awareness Multiple Choice Questions and Answers

1 A cause of inflation is :
A increase in money supply
B increase in money supply and fall in production
C fall of production
D decrease in money supply and fall in production

Answer: Option [B]
2 Inflation brings most benefit to which one of the following ?
A Government pensioners
B Creditors
C Savings Bank Account holders
D Debtors

Answer: Option [D]
3 Inflation is mostly harmful to which one of the following ?
A Debtors
B Creditors
C Business class
D Holder of real assets

Answer: Option [B]
4 Which is correct with respect to inflation ?
A rise in budgets deficit
B rise in money supply
C rise in general price index
D rise in prices of consumer goods

Answer: Option [C]
5 Increasing unemployment and inflation is a situation of :
A hyperinflation
B galloping inflation
C stagflation
D reflation

Answer: Option [C]
6 Who among the following are not protected against inflation ?
A Salaried class
B Industrial workers
C Pensioners
D Agricultural farmers

Answer: Option [D]
7 The period of high inflation, low economic growth and high unemployment is termed as :
A stagnation
B take-off stage in economy
C stagflation
D none of these

Answer: Option [C]
8 Stagflation implies a case of :
A galloping inflation
B recession plus inflation
C adverse balance of trade
D rising wages and employment

Answer: Option [B]
9 Deficit financing aims to put more money into the economy by creating additional paper currency to fill the gap between expenditure and revenue. The device aims at economic development but if it fails, it generates :
A inflation
B devaluation
C deflation
D demonetisation

Answer: Option [A]
10 A steady increase in the general level of prices as a result the aggregate demand is increasing in unsustainable rate as compared to aggregate supply is termed as :
A demand-pull inflation
B cost-push inflation
C stagflation
D structural inflation

Answer: Option [A]

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