INDIAN ECONOMY MOCK TEST – CHAPTER 5

Which of the following are effects of domestic currency depreciation in international market ?

1. Exports become more competitive.
2. Imports become cheaper.

Which of the following can lead to inflation in an economy ?

1. Printing more currency.
2. Expansionary monetary policy.
3. Reduction in income tax.
4. Subsidy on diesel and kerosene.

Consider the following statements –

1. Philips curve establishes the inverse relationship between unemployment and inflation.
2. NAIRU is a point on Philips Curve after which any increase in unemployment leads to steep decrease in inflation.

Which of the above is/are TRUE ?

Match the inflation-unemployment scenarios with their respective phases of economy –

Consider the following for a given financial year in an economy –

A = Nominal GDP

B = Real GDP

Then what would be the value of GDP Deflator ?

Consider the following statements –

1. The creditors gain out of inflation.
2. The debtors lose out of inflation.

Which of the above is/are CORRECT ?

Which of the following is not included while calculating Wholesale Price Index (WPI) ?

Which of the following are the effects of inflation in an economy ?

1. Decrease in investments.
2. Increase in savings.
3. Currency Depreciation.

Consider the following statements about Consumer Price Index (CPI) –

1. It is used for micro level policy making.
2. It is published by the Central Statistical Organisation (CSO).
3. Considers the market price of only the primary and secondary goods.

Which of the above is/are CORRECT ?

Consider the following statements regarding headline inflation in India for the FY 2019-20

1. It stood at 4.1 percent for the country.
2. Lakshadweep had the highest inflation among all states and UTs.
3. Daman & Diu had the lowest inflation among all states and UTs.

Which of the above is/are CORRECT ?

Consider the following statements regarding Consumer Price Index (CPI) in India –

1. Published by Ministry of Statistics and Program Implementation.
2. Current base year is 2012.
3. Among food items, cereals have got the highest weightage in the index.

Which of the above is/are CORRECT ?

Which of the following contributed the most to headline inflation in FY2019-20 ?

Consider the following –

1. In India, Laspeyre’s Index is used to calculate Inflation.
2. Core Inflation is calculated by excluding the food items from WPI.

Which of the above statements is/are CORRECT ?

Consider the following –

1. GDP deflator greater than 100 implies deflation.
2. In India, GDP deflator is reported by the Ministry of Statistics and Programme Implementation.

Which of the above statements is/are CORRECT ?

Which of the following would help the government to curb inflation in the economy ?

1. Fiscal Consolidation
2. Demonetisation
3. Contractionary Monetary Policy
4. Tax subsidies to MSME.

Consider the following –

1. Food and Beverages have the highest weightage in headline inflation.
2. Core inflation contributed the most to headline inflation in FY2019-20.

Which of the above statements is/are INCORRECT ?

Consider the following statements regarding CPI-Combined (Headline Inflation) in India for FY2019-20.

1. Overall inflation was higher in rural areas than urban areas.
2. Food inflation was higher in urban areas than rural areas.

Which of the above is/are CORRECT ?

For the FY2019-20, which category of food items witnessed the highest consumer price inflation in India ?

Which of the following statements is/are CORRECT with respect to India for FY2019-20 ?

1. There was a decrease in wholesale inflation.
2. There was an increase in retail inflation.

Consider the following statements about Wholesale Price Index (WPI) –

1. It is used for macro level policy making.
2. It is published by the office of Economic Advisor to Government of India.
3. The current base year is 2011-12.

Which of the above is/are CORRECT ?