Currency and Inflation MCQ Question with Answer

Currency and Inflation MCQ with detailed explanation for interview, entrance and competitive exams. Explanation are given for understanding.

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Question No : 22
The terms of economics, the recession occurring two times with a small gap in between is known as [Bank of India PO 2010]

Double Deflation

Deflation

Deep Recession

None of these

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Question No : 23
A high rate of inflation tends to worsen balance of payments because:

prices of imported goods rise

prices of exported goods rise making exports less competitive

prices of imported goods fall and hence more is imported

prices of exported goods fall and hence less amount is obtained in terms of foreign exchange

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Question No : 24
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

1 and 3

1 only

2 only

1, 3 and 4

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Question No : 25
For international payments, the Indian currency is linked to :

American Dollar

British Sterling

Gold Standard

None of the above

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Question No : 26
Which of the following is/are treated as artificial currency? [IAS 2010]

ADR

GDR

SDR

Both ADR and SDR

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Question No : 27
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 : [IFS 1990]

inflation

devaluation

deflation

demonetization

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