The RBI Headquarters is located at

(a)

Delhi

(b)

Chennai

(c)

Mumbai

(d)

Bengaluru

___________inflation occurs when general prices of commodities increases due to increase in production costs such as wages and raw materials.

(a)

Cost-push

(b)

demand pull

(c)

running

(d)

galloping

_________is a decrease in the rate of inflation.

(a)

Disinflation

(b)

Deflation

(c)

Stagflation

(d)

Depression

The study of alternating fluctuations in business activity is referred to in Economics as

(a)

Boom

(b)

Recession

(c)

Recovery

(d)

Trade cycle

Fisher’s Quantity Theory of money is based on the essential function of money as

(a)

measure of value

(b)

store of value

(c)

medium of exchange

(d)

standard of deferred payment

'Inflation is taxation without legislation' was said by______

(a)

Rudi Dorbush

(b)

Adam smith

(c)

Milton Friedman

(d)

Alfred Marshall

"The purchasing power of money" was a book published by________in 1911

(a)

J.M. Keynes

(b)

Irving Fisher

(c)

Adam smith

(d)

Ricardo

Irving Fisher's _______ was published in 1911.

(a)

Quantity theory of money

(b)

Liquidity preference

(c)

Quality theory of money

(d)

Both 'b' and 'c'

Gold Standard is a system in which the value of the monetary unit or the standard currency is _____ linked with gold.

(a)

directly

(b)

indirectly

(c)

positively

(d)

negatively

In India, ______ are issued by the Reserve Bank of India (RBI) and ______ are issued by the Ministry of Finance, Government of India (GOI).

(a)

coins and currency notes

(b)

currency notes and coins

(c)

currency notes and pass books

(d)

none of the above

What is SLR?

(a)

It is the fraction of the total demand and time deposits of the commercial banks is the form of specified liquid assets

(b)

Reserve Money consists of two things (a) vault cash in banks and (b) deposits of commercial banks with RBI.

(c)

It is the fraction of the deposits the banks must keep with RBI.

(d)

It is the ratio of money held by the public in currency to that they hold in bank deposits

According to Marshall’s equation, the value of money is influenced not only by changes in M, but also by changes in

(a)

K

(b)

P

(c)

Kl

(d)

Pl

Who said the following statement? “A state of abnormal increase in the quantity of purchasing power"?

(a)

Fisher

(b)

Gregorye

(c)

Marshall

(d)

Keynes

When prices rise rapidly like the running of a horse at a rate of speed of _____ per annum, it is called running inflation.

(a)

1% - 2 %

(b)

100% - 200 %

(c)

10% - 20%

(d)

None of the above

Stagflation is a combination of stagnant economic growth, high unemployment and high inflation ______?

(a)

high inflation

(b)

low inflation

(c)

no inflation

(d)

disinflation

In the Cambridge equation of M = kPY, the value of k is:

(a)

M/V

(b)

1/V

(c)

V in Fisher’s equation

(d)

None of these

Assertion: Fisher extended his original equation of exchange to include bank deposits M1 and its velocity V1.
Reason: In a modern economy, bank’s demand deposits or credit money and its velocity play a vital part in business.

(a)

Both A and R are true and R is the correct explanation of A

(b)

Both A and R are true but R is not the correct explanation of A

(c)

A is true but R is false

(d)

A is false but R is true

Inflation is measured by the
I. consumer price index (CPI).
II. GDP deflator.
III. current account.
IV. depreciation.

(a)

I and II only.

(b)

I and III only.

(c)

III and IV only.

(d)

I, II and III.

Which of the following are costs of inflation?
I. Inflation weakens the creation of credit and capital markets.
II. Inflation distorts business behavior, especially investment behavior.
III. Inflation increases the prices of foreign goods relative to domestic goods.
IV. Inflation imposes a tax on the holders of money.

(a)

I and II only

(b)

III and IV only

(c)

I, II and IV only

(d)

I, II and III only

Match the correct codes

1	It is the ratio of money held by the public in currency to that they hold in bank deposits.	i	CRR
2	Reserve Money consists of two things (a) vault cash in banks and (b) deposits of commercial banks with RBI	ii	SLR
3	It is the fraction of the deposits the banks must keep with RBI	iii	RDR
4	It is the fraction of the total demand and time deposits of the commercial banks is the form of specified liquid assests	iv	CDR

(a)

(1) – (i) (2) – (ii) (3) – (iv) (4) – (iii)

(b)

(1) – (ii) (2) – (iii) (3) – (iv) (4) – (i)

(c)

(1) – (iv) (2) – (iii) (3) – (i) (4) – (ii)

(d)

(1) – (i) (2) – (ii) (3) – (iii) (4) – (iv)