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

Questions
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]

An essential attribute of inflation is increase in prices.

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]

Inflationary Gap is a defined by excess of Aggregate Demand over Aggregate Supply at the full employment level. Inflationary gap refers to the gap by which actual aggregate demand exceeds the aggregate demand that is required to establish full employment equilibrium.

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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]

Cause/causes of inflation is/are increase in money supply without a corresponding increase in production.

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]

The Inflation experienced in the country at present is Cost-push inflation. Cost-push inflation occurs when overall prices increase (inflation) due to increases in the cost of wages and raw materials. Cost-push inflation can occur when higher costs of production decrease the aggregate supply.

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]

Ten rupee notes bear the signature of Governor, Reserve Bank of India. The new ₹10 denomination banknotes in the Mahatma Gandhi (New) Series bear signature of the Governor, Reserve Bank of India. The note has motif of 'Sun Temple, Konark' on the reverse, depicting the country's cultural heritage.

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

Answer: Option [C]

For international payments, the Indian currency is linked to American Dollar.

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]

The States debt does not include treasury bills issued to international financial institutions.

28 How many languages are used on a ten rupee note ?
A 10
B 12
C 17
D 18

Answer: Option [C]

There are 17 languages used on a ten rupee note. Contemporary Currency notes have 15 languages on the panel which appear on the reverse of the note.There are 17 languages on a ten rupee currency note, including Assamese, Bengali, Gujarati, Kannada, Konkani, Malayalam, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Tamil, Telugu, Urdu along with Hindi & English

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]

The best means of saving during inflation is to keep Money. Keeping your money in short-term bonds is a similar strategy to maintaining cash in a CD or savings account.

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]

The correct answer is prices of exported goods rise making exports less competitive.

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