Inflation is caused by - (1) increase in money supply and decrease in production (2) increase in money supply (3) increase in production (4) decrease in production

Inflation is caused by - (1) increase in money supply and decrease in production (2) increase in money supply (3) increase in production (4) decrease in production
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(1) increase in money supply and decrease in production Explanation: Economists generally agree that in the long run, inflation is caused by increases in the money supply. According to the theory of Demand-Pull Inflation, if demand grows faster than supply, prices will increase. There is too much money chasing too few goods. The increase in money supply is not matched by the equivalent production of goods.
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Inflation is caused by (1) increase in money supply and decrease in production (2) increase in money supply (3) increase in production (4) decrease in production

Description : Inflation is caused by (1) increase in money supply and decrease in production (2) increase in money supply (3) increase in production (4) decrease in production

Last Answer :  increase in money supply and decrease in production

Demand pull inflation may be caused by (a) An increase in cost (b) A decrease in interest rate © A reduction in government spending (d) An outward shift of aggregate supply.

Description : Demand pull inflation may be caused by (a) An increase in cost (b) A decrease in interest rate © A reduction in government spending (d) An outward shift of aggregate supply.

Last Answer : (b) A decrease in interest rate

Which of the following can be used for checking inflation temporarily? (1) Increase in wages (2) Decrease in money supply (3) Decrease in taxes (4) None of these

Description : Which of the following can be used for checking inflation temporarily? (1) Increase in wages (2) Decrease in money supply (3) Decrease in taxes (4) None of these

Last Answer : (2) Decrease in money supply Explanation: An open market operation (also known as OMO) is an activity by a central bank to buy or sell government bonds on the open market. India ... those in the other developed countries. Economists claim that an increase in money supply alone constitutes inflation.

Which of the following can be used for checking inflation temporarily ? (1) Increase in wages (2) Decrease in money supply (3) Decrease in taxes (4) None of these

Description : Which of the following can be used for checking inflation temporarily ? (1) Increase in wages (2) Decrease in money supply (3) Decrease in taxes (4) None of these

Last Answer : Decrease in money supply

If RBI wants to decrease the money supply in order to check inflation it will (a) Sell bonds ; (b) Increase CRR ; (c) Hike bank rate ; (d) All or any of the above three

Description : If RBI wants to decrease the money supply in order to check inflation it will (a) Sell bonds ; (b) Increase CRR ; (c) Hike bank rate ; (d) All or any of the above three

Last Answer : ; (d) All or any of the above three

During periods of inflation, tax rates should - (1) increase (2) decrease (3) remain constant (4) fluctuate

Description : During periods of inflation, tax rates should - (1) increase (2) decrease (3) remain constant (4) fluctuate

Last Answer : (1) increase Explanation: In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. In other words, inflation means continuously ... To control inflation there should be an increase in the tax rate and increase in the interest rate.

During periods of inflation, tax rates should (1) increase (2) decrease (3) remain constant (4) fluctuate

Description : During periods of inflation, tax rates should (1) increase (2) decrease (3) remain constant (4) fluctuate

Last Answer : increase

An increase in aggregate demand is more likely to lead to demand pull inflation (a) If aggregate supply is completely elastic (b) If aggregate supply is completely inelastic © If aggregate supply is unitary elastic (d) If aggregate supply is moderately elastic

Description : An increase in aggregate demand is more likely to lead to demand pull inflation (a) If aggregate supply is completely elastic (b) If aggregate supply is completely inelastic © If aggregate supply is unitary elastic (d) If aggregate supply is moderately elastic

Last Answer : (b) If aggregate supply is completely inelastic

Inflation is caused by certain factors 1. Those causing an increase in demand 2. Those a short, fall in supply 3. Structural rigidities in the economy 4. All of these 5. None of these

Description : Inflation is caused by certain factors 1. Those causing an increase in demand 2. Those a short, fall in supply 3. Structural rigidities in the economy 4. All of these 5. None of these

Last Answer : Those causing an increase in demand

The process of curing inflation by reducing money supply is called - (1) Cost-push inflation (2) Demand-pull inflation (3) Disinflation (4) Reflation

Description : The process of curing inflation by reducing money supply is called - (1) Cost-push inflation (2) Demand-pull inflation (3) Disinflation (4) Reflation

Last Answer : (3) Disinflation Explanation: Disinflation is a decrease in the rate of inflation -a slowdown in the rate of increase of the general price level of goods and services in a nation's gross ... a very short period of time. Disinflation takes place only when an economy is suffering from recession.

Inflation can be checked by - (1) increasing exports (2) increasing money supply (3) increasing Government expenditure (4) decreasing money supply

Description : Inflation can be checked by - (1) increasing exports (2) increasing money supply (3) increasing Government expenditure (4) decreasing money supply

Last Answer : (4) decreasing money supply Explanation: The technical and most often used way to control inflation is by tightening the money supply. The logic goes that when people do not have excess money, ... . Most central banks use high interest rates as the traditional way to fight or prevent inflation.

In a period of inflation and price rises the supply of money remains - (1) the same (2) increases (3) decreases (4) increases or decreases pro-portionately.

Description : In a period of inflation and price rises the supply of money remains - (1) the same (2) increases (3) decreases (4) increases or decreases pro-portionately.

Last Answer : (2) increases Explanation: Money supply is the total amount of monetary assets available in an economy at a specific time. The relation between money and prices is historically associated with the quantity ... money-supply growth, at least for rapid increases in the amount of money in the economy.

Inflation can be checked by (1) increasing exports (2) increasing money supply (3) increasing Government expenditure (4) decreasing money supply

Description : Inflation can be checked by (1) increasing exports (2) increasing money supply (3) increasing Government expenditure (4) decreasing money supply

Last Answer : decreasing money supply

In a period of inflation and price rise the supply of money remains (1) the same (2) increases (3) decreases (4) increases or decreases proportionately.

Description : In a period of inflation and price rise the supply of money remains (1) the same (2) increases (3) decreases (4) increases or decreases proportionately.

Last Answer : increases

The process of curing inflation by reducing money supply is called (1) Cost-push inflation (2) Demand-pull inflation (3) Disinflation (4) Reflation

Description : The process of curing inflation by reducing money supply is called (1) Cost-push inflation (2) Demand-pull inflation (3) Disinflation (4) Reflation

Last Answer : Disinflation

If he Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should - (1) lower cash reserve ratio (2) raise discount rates (3) sell government securities (4) All of the above

Description : If he Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should - (1) lower cash reserve ratio (2) raise discount rates (3) sell government securities (4) All of the above

Last Answer : (1) lower cash reserve ratio Explanation: When the Central Bank of a country intends to increase money supply, it should lower the Cash Reserve Ratio. A decrease in CRR helps the commercial banks to ... the amount of Bank deposits and they will lend more as they have more amount as their reserve.

If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should (1) lower cash reserve ratio (2) raise discount rates (3) sell government securities (4) All of the above

Description : If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should (1) lower cash reserve ratio (2) raise discount rates (3) sell government securities (4) All of the above

Last Answer :  lower cash reserve ratio

Inflation occurs when aggregate supply is - (1) more than aggregate demand (2) less than aggregate demand (3) equal to aggregate demand (4) None of these

Description : Inflation occurs when aggregate supply is - (1) more than aggregate demand (2) less than aggregate demand (3) equal to aggregate demand (4) None of these

Last Answer : (2) less than aggregate demand Explanation: If the supply is less than the demand, the price will increase. Inflation, the persistent increase in the average price level, can be ... Translating this to the macro-economy suggests that inflation occurs when aggregate demand exceeds aggregate supply.

Which curve shows the inverse relationship between unemployment and inflation rates? (1) Supply curve (2) Indifference curve (3) IS curve (4) Phillips curve

Description : Which curve shows the inverse relationship between unemployment and inflation rates? (1) Supply curve (2) Indifference curve (3) IS curve (4) Phillips curve

Last Answer : (4) Phillips curve Explanation: The Phillips curve shows the inverse relationship between inflation and unemployment: as unemployment decreases, inflation increases. The relationship, however, is not linear. Graphically, ... unemployment rate is on the x-axis and the inflation rate is on the y-axis.

The supply-side measure to control inflation is - (1) Reducing public expenditure (2) Price control through Public Distribution System (3) Higher taxation to mop up liquidity (4) Credit control

Description : The supply-side measure to control inflation is - (1) Reducing public expenditure (2) Price control through Public Distribution System (3) Higher taxation to mop up liquidity (4) Credit control

Last Answer : (2) Price control through Public Distribution System Explanation: The issue of inflation is addressed from both demand and supply sides. demand management is achieved by measures such as postponing public expenditure ... rice and wheat resorted to by FCI from its buffer stock in times of price rise.

The function of a government by which it seeks to seek a balance of employment, demand-supply, and inflation, is known as: a) Distribution function b) Allocation function c) Stabilization d) Protection

Description : The function of a government by which it seeks to seek a balance of employment, demand-supply, and inflation, is known as: a) Distribution function b) Allocation function c) Stabilization d) Protection

Last Answer : c) Stabilization

Inflation occurs when aggregate supply is (1) more than aggregate demand (2) less than aggregate demand (3) equal to aggregate demand (4) None of these

Description : Inflation occurs when aggregate supply is (1) more than aggregate demand (2) less than aggregate demand (3) equal to aggregate demand (4) None of these 

Last Answer :  less than aggregate demand

Which curve shows the inverse relationship between unemployment and inflation rates ? (1) Supply curve (2) Indifference curve (3) IS curve (4) Phillips curve

Description : Which curve shows the inverse relationship between unemployment and inflation rates ? (1) Supply curve (2) Indifference curve (3) IS curve (4) Phillips curve

Last Answer :  Phillips curve 

The supply-side measure to control inflation is (1) Reducing public expenditure (2) Price control through Public Distribution System (3) Higher taxation to mop up liquidity (4) Credit control

Description : The supply-side measure to control inflation is (1) Reducing public expenditure (2) Price control through Public Distribution System (3) Higher taxation to mop up liquidity (4) Credit control

Last Answer : Price control through Public Distribution System

Movement along the same demand curve is know as - (1) Extension and Contraction of Demand (2) Increase and Decrease of Demand (3) Contraction of supply (4) Increase of supply

Description : Movement along the same demand curve is know as - (1) Extension and Contraction of Demand (2) Increase and Decrease of Demand (3) Contraction of supply (4) Increase of supply

Last Answer : (2) Increase and Decrease of Demand Explanation: A shift in the demand curve is caused by a factor affecting demand other than a change in price. If any of these factors change then the amount ... of a change in supply conditions. The factors affecting demand are assumed to be held const ant.

The equilibrium price of a commodity will definitely rise if there is a/an: (1) increase in supply combined with a decrease in demand. (2) increase in both demand and supply. (3) decrease in both demand and supply. (4) increase in demand accompanied by a decrease in supply.

Description : The equilibrium price of a commodity will definitely rise if there is a/an: (1) increase in supply combined with a decrease in demand. (2) increase in both demand and supply. (3) decrease in both demand and supply. (4) increase in demand accompanied by a decrease in supply.

Last Answer : (4) increase in demand accompanied by a decrease in supply. Explanation: Price of a commodity is always determined by the forces of demand and supply in the market. The price at which ... equilibrium price definitely increases when there is an increase in demand combined with the decrease in supply.

A rightward shift in the supply schedule indicates (a) a decrease in supply (b) an increase in supply © an increase in quantity supply (d) a decrease in quantity supply

Description : A rightward shift in the supply schedule indicates (a) a decrease in supply (b) an increase in supply © an increase in quantity supply (d) a decrease in quantity supply

Last Answer : (b) an increase in supply

The equilibrium price of a commodity will definitely rise if there is a/an : (1) increase in supply combined with a decrease in demand. (2) increase in both demand and supply. (3) decrease in both demand and supply. (4) increase in demand accompanied by a decrease in supply.

Description : The equilibrium price of a commodity will definitely rise if there is a/an : (1) increase in supply combined with a decrease in demand. (2) increase in both demand and supply. (3) decrease in both demand and supply. (4) increase in demand accompanied by a decrease in supply.

Last Answer : increase in demand accompanied by a decrease in supply.

Movement along the same demand curve is know as (1) Extension and Contraction of Demand (2) Increase and Decrease of Demand (3) Contraction of supply (4) Increase of supply

Description : Movement along the same demand curve is know as (1) Extension and Contraction of Demand (2) Increase and Decrease of Demand (3) Contraction of supply (4) Increase of supply

Last Answer :  Increase and Decrease of Demand

)A very high rise in National Income at current market prices and a low rise at constant prices reveals - (1) the high rate of growth in the economy at the current period (2) the increased production in the current period (3) the improper growth of the economy (4) the high rate of inflation prevailing in the economy

Description : )A very high rise in National Income at current market prices and a low rise at constant prices reveals - (1) the high rate of growth in the economy at the current period (2) the increased ... period (3) the improper growth of the economy (4) the high rate of inflation prevailing in the economy

Last Answer : (3) the improper growth of the economy Explanation: When national output is multiplied by present ruling price, we obtain national income at current prices. On the other hand if the national output is ... not indicate increase in product or output, but is rather due to the rise in price level.

Which of the following best indicates economic growth of a Nation? (1) Agriculture income (2) Per capita income (3) Gross industrial production (4) Inflation

Description : Which of the following best indicates economic growth of a Nation? (1) Agriculture income (2) Per capita income (3) Gross industrial production (4) Inflation

Last Answer : (2) Per capita income Explanation: Some economists believe that economic growth is meaningless if it is not distributed across different segments of population. So per capita income is considered by ... Gross Domestic Product (GDP) is the most comprehensive measure of over-all economic performance.

Which of the following best indicates economic growth of a Nation? (1) Agriculture income (2) Per capita income (3) Gross industrial production (4) Inflation

Description : Which of the following best indicates economic growth of a Nation? (1) Agriculture income (2) Per capita income (3) Gross industrial production (4) Inflation

Last Answer : Per capita income

A very high rise in National Income at current market prices and a low rise at constant prices reveals (1) the high rate of growth in the economy at the current period (2) the increased production in the current period (3) the improper growth of the economy (4) the high rate of inflation prevailing in the economy

Description : A very high rise in National Income at current market prices and a low rise at constant prices reveals (1) the high rate of growth in the economy at the current period (2) the increased production ... (3) the improper growth of the economy (4) the high rate of inflation prevailing in the economy 

Last Answer :  the high rate of inflation prevailing in the economy

.An increases in investment is most likely to be caused by (a) Lower interest rates (b) Expectations of lower national incomes © A decrease in the marginal propensity to consume (d) An increase in withdrawals.

Description : .An increases in investment is most likely to be caused by (a) Lower interest rates (b) Expectations of lower national incomes © A decrease in the marginal propensity to consume (d) An increase in withdrawals.

Last Answer : (a) Lower interest rates

An increase in investment is caused by (a) Lower interest rates (b) Expectations of lower national income © A decrease in the marginal propensity to consume (d) An increase in withdrawals

Description : An increase in investment is caused by (a) Lower interest rates (b) Expectations of lower national income © A decrease in the marginal propensity to consume (d) An increase in withdrawals

Last Answer : (a) Lower interest rates

Change in cost of production of the concerned goods causes (a) The demand curve to shift ; (b) The supply curve to shift ; (c) Increase in quantity demanded; (d) Decrease in quantity supplied

Description : Change in cost of production of the concerned goods causes (a) The demand curve to shift ; (b) The supply curve to shift ; (c) Increase in quantity demanded; (d) Decrease in quantity supplied 

Last Answer : (b) The supply curve to shift ;

The RBI can decrease the money supply in the market by: a) selling government securities b) buying government securities c) borrowing money from commercial banks d) none of the above

Description : The RBI can decrease the money supply in the market by: a) selling government securities b) buying government securities c) borrowing money from commercial banks d) none of the above

Last Answer : a) selling government securities

Which among the following statements is not true when there is an increase in interest rate in an economy? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Description : Which among the following statements is not true when there is an increase in interest rate in an economy? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Last Answer : (4) increase in capital return Explanation: Interest rate increase the cost of borrowing, which results in lesser investment activity and the purchase of consumer durables. In a low interest-rate ... . All of these factors raise output and employment as well as investment and consumer spending.

If a firm is operating at loss in the shortperiod in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Description : If a firm is operating at loss in the shortperiod in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Last Answer : (3) continue to operate as long as it covers even the variable costs. Explanation: The demand for labour is "derived- from the production and demand for the product being demanded. If the demand ... price and production numbers are met. Labour is "derived" from the market demand for the product.

Which among the following statements is not true when there is an increase in interest rate in an economy ? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Description : Which among the following statements is not true when there is an increase in interest rate in an economy ? (1) increase in saving (2) decrease in loan (3) increase in production cost (4) increase in capital return

Last Answer : increase in capital return

If a firm is operating at loss in the short-period in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Description : If a firm is operating at loss in the short-period in perfect combination, it should : (1) decrease the production and the price. (2) increase the production and the price (3) continue to operate as long as it covers even the variable costs. (4) shut-down and leave the industry

Last Answer : continue to operate as long as it covers even the variable costs.

Cost push inflation arises due to (a) Persistent rise in factor cost ; (b) Mismatch between demand and supply of commodities (c) Combine phenomena of demand pull and cost-push inflation. ; (d) Increase in price of precious metal

Description : Cost push inflation arises due to (a) Persistent rise in factor cost ; (b) Mismatch between demand and supply of commodities (c) Combine phenomena of demand pull and cost-push inflation. ; (d) Increase in price of precious metal

Last Answer : (a) Persistent rise in factor cost ;

Demand pull inflation rises due to (a) Persistent rise in factor cost ; (b) Mismatch between demand and supply of commodities (c) Combine phenomena of demand pull and cost-push inflation. ; (d) Increase in Price of precious metal

Description : Demand pull inflation rises due to (a) Persistent rise in factor cost ; (b) Mismatch between demand and supply of commodities (c) Combine phenomena of demand pull and cost-push inflation. ; (d) Increase in Price of precious metal

Last Answer : ; (b) Mismatch between demand and supply of commodities

Milton Friedman gave emphasis in his quantity theory of money on (a) Production and Income (b) Price level (c) Supply of Money (d) Demand for Money

Description : Milton Friedman gave emphasis in his quantity theory of money on (a) Production and Income (b) Price level (c) Supply of Money (d) Demand for Money

Last Answer : (d) Demand for Money

the federal reserve _____ the money supply to lower inflation. -General Knowledge

Description : the federal reserve _____ the money supply to lower inflation. -General Knowledge

Last Answer : The Federal Reserve reduces (decreases) the money supply to lower inflation.

Inflation is a situation characterized by (1) Too much money chasing too few goods (2) Too few money chasing too much goods (3) Too many people chasing too few goods (4) Too many people chasing too little money

Description : Inflation is a situation characterized by (1) Too much money chasing too few goods (2) Too few money chasing too much goods (3) Too many people chasing too few goods (4) Too many people chasing too little money

Last Answer : (1) Too much money chasing too few goods Explanation: Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involves inflation rising as real gross ... the Phillips curve. This is commonly described as "too much money chasing too few goods."

When too much money is chasing too few goods, the situation is - (1) deflation (2) inflation (3) recession (4) stagflation

Description : When too much money is chasing too few goods, the situation is - (1) deflation (2) inflation (3) recession (4) stagflation

Last Answer : (2) inflation Explanation: Demand-pull inflation is asserted to arise when aggregate demand in an economy outpaces aggregate supply. It involves inflation rising as real gross domestic product rises and ... few goods", since only money that is spent on goods and services can cause inflation.

When too much money is chasing too few goods, the situation is - (1) Deflation (2) Inflation (3) Recession (4) Stagflation

Description : When too much money is chasing too few goods, the situation is - (1) Deflation (2) Inflation (3) Recession (4) Stagflation

Last Answer : (2) Inflation Explanation: Inflation occurs when too much money is chasing too few goods. The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of ... prices is a result from an increase in the supply of money by central banking authorities.

"Dear Money" means - (1) low rate of interest (2) high rate of interest (3) depression (4) inflation

Description : "Dear Money" means - (1) low rate of interest (2) high rate of interest (3) depression (4) inflation

Last Answer : (2) high rate of interest Explanation: Dear Money, also known as tight money, is money which has to be borrowed at a high interest rate, and so restricts expenditure by companies. This situation ... supply and demand. Businesses may have a tough time raising capital during a period of dear money.

When too much money is chasing too few goods, the situation is (1) deflation (2) inflation (3) recession (4) stagflation

Description : When too much money is chasing too few goods, the situation is (1) deflation (2) inflation (3) recession (4) stagflation

Last Answer : inflation