Practice Quiz :- 19


1. Devaluation of currency leads to
(a) expansion of export trade
(b) contraction of import trade
(c) expansion of import substituting
(d) all of the above

Ans.(d) all of the above

2. The term stagflation refers to a situation where
(a) growth has no relation with the change in price
(b) rate of growth and prices both are decreasing
(c) rate of growth is faster than the rate of price increase
(d) rate of growth is slower than the rate of price increase

Ans.(d) rate of growth is slower than the rate of price increase

3. During period of inflation, rates should
(a) Increase
(b) Decrease
(c) Remain constant
(d) Fluctuate

Ans.(a) Increase

4. The existence of a parallel economy or Black money
(a) makes the economy more competitive
(b) makes the monetary policies less effective
(c) ensure a better distribution of income and wealth
(d) ensure increasing productive investment

Ans.(b) makes the monetary policies less effective

5. In the paralance of economy / commerce, what is ‘Gild-edged market’?
(a) Gold and Silver market
(b) Industrial securities market
(c) Market of safe securities
(d) Market of software technology products

Ans.(c) Market of safe securities

6. At present Indian Rupee is
(a) partially convertible on current account
(b) fully convertible on current account
(c) partially convertible on capital account
(d) fully convertible on capital account

Ans.(b) fully convertible on current account

7. Which of the following terms is not a financial term?
(a) Investment
(b) Core Banking Solution
(c) RTGS
(d) All the above

Ans.(d) All the above

8. Money laundering normally involves
(a) placement of funds
(b) layering of funds
(c) integration of funds
(d) all the above

Ans.(d) all the above

9. Inflation in India is measured on which of the following indexes / indicators?
(a) Cost of Living Index (CLI)
(b) Consumer Price Index (CPI)
(c) Gross Domestic Product (GDP)
(d) Wholesale Price Index(WPI)

Ans.(d) Wholesale Price Index(WPI)

10. When the prices of commodities, goods and services start declining consistently,the phenomenon is known as
(a) Discount field
(b) Deflation
(c) Negative growth
(d) Market capitalism

Ans.(b) Deflation