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
Correct Answer :
A. inflation
Related Questions
Monetary policy is regulated by:
money lenders
Central Bank
private entrepreneurs
Government policy
Which of the following prints currency notes of the denomination of Rs. 100?
The Bank Note Press, Dewas
The Indian Security Press, Nasik Road
The Security Printing Press, Hyderabad
All of the above
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
An essential attribute of inflation is:
fall in production
increase in prices
absence of black market
presence of black market
Black money is :
counterfeit currency
illegally earned money
money earned through underhand deals
income on which payment of tax is usually evaded
Inflation is caused as a result of:
increase in money supply
fall in production
increase in money supply without a corresponding increase in production
decrease in money supply without a corresponding decrease 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
Under the Constitution, the power to raise and disburse public funds:
has been vested in Union Government
has been divided between the Union and State Governments
has been given to the Finance Commission
has not been given to anyone
Consider the following statements:
The price of any currency in international market is decided by the [IAS 1998]
1. World Bank
2. Demand for goods/services provided by the country concerned
3. stability of the government of the concerned country
4. economic potential of the country in question
Of these statements:
1, 2, 3 and 4 are correct
2 and 3 are correct
3 and 4 are correct
1 and 4 are correct
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 is/are treated as artificial currency? [IAS 2010]
ADR
GDR
SDR
Both ADR and SDR
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? [CDS 2009]
I only
II only
Both I and II
Neither I nor II
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
Among the remedies of inflation we cannot include:
better capacity utilisation
lowering bank rate
reducing budgetary deficit
an efficient public distribution system
Rupee was devalued by what percent in July 1991 ? [MP PCS 1990]
18
20
22
25
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
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
Inflation can be contained by:
surplus budget
increase in taxation
reduction in public expenditure
all the above
Stagflation implies a case of: [CDS 1992]
galloping inflation
recession plus inflation
adverse balance of trade
rising wages and employment
Inflation implies: [Railways 1994]
rise in budget deficit
rise in money supply
rise in general price index
rise in prices of consumer goods
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
The inflation experienced in the country at present is:
galloping inflation
secondary inflation
unrealistic inflation
cost-push inflation
'Devaluation' means: [RRB 1992]
converting rupee into gold
lowering of the value of one currency in comparison of some foreign currency
making rupee dealer in comparison to some foreign currency
None of these
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 : [CDS 1999]
demand-pull inflation
cost-push inflation
stagflation
structural inflation
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
One-rupee currency notes bear the signature of:
Prime Minister of India
President of India
Finance Minister of India
Finance Secretary of India
How many languages are used on a ten rupee note?
2
7
10
15
The special paper required for printing of currency notes by the Security Presses In the country is manufactured at :
Hyderabad
Kolkata
Hoshangabad
Dewas
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
Consider the following statements:
Full convertibility of the rupee may mean: [IAS 2002]
1. its free float with other international currencies.
2. its direct exchange with any other international currency at any prescribed place inside and outside the country.
3. it acts just like any other international currency.
Which of these statements are correct?
1 and 2
1 and 3
2 and 3
1, 2 and 3