Inflation can be contained by :


A) surplus budget

B) increase in taxation

C) reduction in public expenditure

D) all the above

Correct Answer:
D) all the above


Part of solved Currency Inflation questions and answers : General Knowledge >> Economy >> Currency Inflation








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1). 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 :
A). inflation
B). devaluation
C). deflation
D). demonetisation
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2). A steady increase in the general level of prices as a result of excessive increase
in aggregate demand as compared to aggregate supply is termed as :
A). demand-pull inflation
B). cost-push inflation
C). stagflation
D). structural inflation
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3). Which of the following are definite implications of a fall in inflation?
1. Prices have fallen
2. Prices are increasing more slowly than before
3. Food supply has increased
4. There is industrial stagnation
A). 1 and 3
B). 1 only
C). 2 only
D). 1, 3 and 4
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4). Among the causes of inflation can be listed :
1. slow growth in agricultural output
2. increasing non-development expenditure of Government
3. rapid population growth
4. rapid growth in costly imports
A). 1 and 2
B). 2 and 3
C). 1, 2, 3 and 4
D). 1 and 4 only
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5). Among the remedies of inflation we cannot include :
A). better capacity utilisation
B). lowering bank rate
C). reducing budgetary deficit
D). an efficient public distribution system
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6). A very rapid growth in prices in which money loses its value to the point where
even barter may be preferable is known as :
A). inflation
B). hyper-inflation
C). deflation
D). disinflation
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7). Inflationary Gap is a situation characterised by :
A). excess of Aggregate Demand over Aggregate Supply at the full employment
level
B). gap between Galloping Inflation and Runaway Inflation
C). Inflation coupled with recession
D). Inflation that usually prevails in a developing country
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8). Which of the following is wrongly matched?
A). (a) Depression - Insufficient demand causing large scale unemployment of men and machinery over a long period of time
B). (b) Recession - Reduction in demand and production/investment over a short
period of time
C). (c ) Stagflation - slow pace of economic activity due to falling prices
D). (d) Boom - Rapid and all-round spurt in economic activity
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9). A high rate of inflation tends to worsen balance of payment because :
A). (a) prices of imported goods rise
B). (b) prices of exported goods rise making exports less competitive
C). (c ) prices of imported goods fall and hence more is imported
D). (d) prices of exported goods fall and hence less amount is obtained in terms of
foreign exchange
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10). The effect of inflation on tax revenue results in a situation known as :
A). (a) stagflation
B). (b) fiscal drag
C). (c ) reflation
D). (d) disinflation
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