Currency and Inflation - General Knowledge Short Questions and Answers for Examinations

21 An essential attribute of inflation is:
A Increase in prices
B Less production
C Presence of black market
D Absence of black market

Answer: Option [A]
22 Inflationary Gap is a defined by:
A Inflation coupled with recession
B Inflation that usually prevails in a developing country
C Gap between Galloping Inflation and Runaway Inflation
D Excess of Aggregate Demand over Aggregate Supply at the full employment level

Answer: Option [D]
23 Cause/causes of inflation is/are:
A Fall in production
B Increase in money supply
C Increase in money supply without a corresponding increase in production
D decrease in money supply without a corresponding decrease in production

Answer: Option [C]
24 The Inflation experienced in the country at present is:
A Cost-push inflation
B Unrealistic inflation
C Secondary inflation
D Demand Pull inflation

Answer: Option [A]
25 Ten rupee notes bear the signature of:
A President
B Finance Minister
C Secretary, Ministry of Finance
D Governor, Reserve Bank of India

Answer: Option [D]
26 For international payments, the Indian currency is linked to:
A British Sterling
B Gold Standard
C American Dollar
D Euro

Answer: Option [C]
27 The States debt does not include:
A Agricultural loans
B Loans from State Bank of India
C Loans from the Central Government
D Treasury bills issued to international financial institutions

Answer: Option [D]
28 How many languages are used on a ten rupee note ?
A 10
B 12
C 15
D 18

Answer: Option [C]
29 The best means of saving during inflation is to keep:
A Equity
B Money
C Government Bonds
D Time deposits with Banks

Answer: Option [B]
30 Why a high rate of inflation tends to worsen balance of payments ?
A Prices of imported goods rise
B Prices of imported goods fall and hence more is imported
C Prices of exported goods rise making exports less competitive
D Prices of exported goods fall and hence less amount is obtained in terms of foreign exchange

Answer: Option [C]

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