1. A high rate of inflation tends to worsen balance of payments because:
(a) prices of imported goods rise
(b) prices of exported goods rise making exports less competitive
(c) prices of imported goods fall and hence more is imported
(d) prices of exported goods fall and hence less amount is obtained in terms of foreign
exchange
2. The effect of inflation on tax revenue results in a situation known as :
(a) stagflation
(b) fiscaldrag
(c) reflation
(d) disinflation
3. The sum of which of the following constitutes Broad Money in India?
1. Currency with the public
2. Demand deposits with banks
3. Time deposits with banks
4. Other deposits with RBI
Choose the correct answer using the codes given below:
(a) 1 and 2
(b) 1, 2 and 3
(c) 1, 2, 3 and 4
(d) 1, 2 and 4
4. Rising prices lead to all but one of the following:
(a) promotion of inequalities
(b) generation of black money
(c) adverse effect on balance of payments
(d) adverse effect on speculation
5. Consider the following statements about Wholesale Price Index (WPI) :
1. It captures the price movement extensively and is, therefore, taken as an indicator of
inflation.
2. The office of the Economic adviser (OEA) is entrusted with the function of compilation
and publication of the weekly wholesale price index number in India.
Which of the statements given above is/are correct?
(a) I only
(b) II only
(c) Both I and II
(d) Neither I nor II
6. In the last one decade, which one among the following sectors has attracted the highest
Foreign Direct Investment inflows into India?
(a) Chemicals other than fertilizers
(b) Services sector
(c) Food processing
(d) Telecommunication
7. Under the Constitution, the power to raise and disburse public funds:
(a) has been vested in Union Government
(b) has been divided between the Union and State Governments
(c) has been given to the Finance Commission
(d) has not been given to anyone
8. There are three major groups of commodities in the Wholesale Price Index. These are:
1. primary articles
2. fuel, power, light and lubricants
3. manufactured products
4. food articles and industrial raw materials
(a) 1, 2 and 3
(b) 2, 3 and 4
(c) 1, 3 and 4
(d) 1 and 3
9. Rupee was devalued by what percent in July 1991 ?
(a) 18
(b) 20
(c) 22
(d) 25
10. When was decimal coinage introduced in India?
(a) 1947
(b) 1950
(c) 1957
(d) 1960