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
Correct Answer :
B. prices of exported goods rise making exports less competitive
Related Questions
How many languages are used on a ten rupee note?
2
7
10
15
Which of the following mints undertakes refining of gold for licensed gold dealers and production of medals for defence services?
The Hyderabad Mint
The Mumbai Mint
The Kolkata Mint
None of the above
Which of the following is/are treated as artificial currency? [IAS 2010]
ADR
GDR
SDR
Both ADR and SDR
Inflationary Gap is a situation characterized by:
excess of Aggregate Demand over Aggregate Supply at the full employment level
gap between Galloping Inflation and Runaway Inflation
Inflation coupled with recession
Inflation that usually prevails in a developing country
Hard Currency is defined as currency:
which can hardly be used for international transactions
which is used in times of war
which loses its value very fast
traded in foreign exchange market for which demand is persistently relative to the supply
Inflation implies: [Railways 1994]
rise in budget deficit
rise in money supply
rise in general price index
rise in prices of consumer goods
Amongst the currency quotes USD/JPY, USD/Euro and USD/CAD, which one of the following is referred as the base currency for quotes? [Punjab & Sindh Bank 2011]
USD
JPY
Euro
None of these
In the last one decade, which one among the following sectors has attracted the highest Foreign Direct Investment inflows into India? [IAS 2004]
Chemicals other than fertilizers
Services sector
Food processing
Telecommunication
When was decimal coinage introduced in India? [CDS 2005]
1947
1950
1957
1960
Minimum inflation in post economic reform was in :
1999-2000
2000-2001
2001-2002
2002-2003
To meet the growing needs for coins in the country, where does the Government propose to set up another mint?
Nasik
Hoshangabad
Dewas
Noida
Devaluation of currency by a country is meant to lead to :
1. expansion of import trade
2. promotion of import substitution
3. expansion of export trade
1 only
2 and 3
1 and 2
1 and 4
Inflation can be contained by:
surplus budget
increase in taxation
reduction in public expenditure
all the above
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
1, 2 and 3
2, 3 and 4
1, 3 and 4
1 and 3
The best means of saving during inflation is to keep:
money
Government Bonds
equity
time deposits with Banks
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
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
The period of high inflation and low economic growth is termed as: [RRB 1992]
stagnation
take-off stage in economy
stagflation
none of these
The cause of inflation is:
increase in money supply
fall in production
increase in money supply and fall in production
decrease in money supply and fall in production
Which of the following is wrongly matched?
Depression: Insufficient demand causing large scale unemployment of men and machinery over a long period of time
Recession: Reduction in demand and production/ investment over a short period of time
Stagflation: slow pace of economic activity due to falling prices
Boom: Rapid and all-round spurt in economic activity
Broad money in India is :
M1
M2
M3
M4
The situation with increasing unemployment and inflation is termed as: [CPO AC 2003]
hyperinflation
galloping inflation
stagflation
reflation
Which of the following factors contributes to an inflationary trend?
15% fall in production of industrial goods
15% increase in prices of agricultural products
15% increase in supply of money in the market
none of these
Which of the following can be used for checking inflation temporarily?
Increase in wages
Decrease in money supply
Decrease in taxes
None of the above
When was the decimal system of currency introduced in India?
1948
1950
1954
1957
The Issue Department of the RBI maintains a _______ against printing of notes:
Minimum Reserve System
Proportional Reserve System
Proportional Gold Reserve System
Proportional Foreign Securities Reserve System
Which of the following measures should be taken when an economy is going through inflationary pressures?
1. The direct taxes should be increased.
2. The interest rate should be reduced.
3. The public spending should be increased
Select the correct answer using the code given below: [CDS 2012]
1 only
2 only
2 and 3
1 and 2
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
1 and 2
2 and 3
1, 2, 3 and 4
1 and 4 only
Convertibility of the rupee implies: [IAS 1994]
being able to convert rupee notes into gold
freely permitting the conversion of rupee to other major currencies and vice versa
allowing the value of the rupee to be fixed by market forces
developing an international market for currencies in India
Which of the following is incorrect about convertibility?
The exchange rate should be determined by the forces of demand and supply of the currency
The exchange rate' would indicate the strength of the economy
It would discourage black market transactions
The RBI will be a direct player now rather than being an indirect one