1..Which one of the following statements is an appropriate description of disinflation?

(a)  It is a sudden fall in the value of a currency against other currencies.
(b)  It is a persistent recession in both the financial and real sectors of economy.
(c)  It is a persistent fall in the general price level if goods and services.
(d)  It is a fall in the rate of inflation over a period of time.

2..Consider the following statements regarding Inflation:

  1. Headline inflation excludes items that face volatile price movement, notably food and energy.
  2. Headline Inflation is nothing but Core Inflation minus inflation that is contributed by food and energy commodities.
  3. Core inflation may not give an accurate picture of how an economy is behaving as it includes food and energy commodities.

Which of the statement(s) given above is/are correct?
(a) 1 and 2 only
(b) 3 only

(c) 2 and 3 only
(d) None of the above

3..Consider the following statements regarding inflation in India:

  1. To reduce inflation RBI Increases repo rate.
  2. To reduce inflation government can increase import duties and can ban exports of certain products.
  3. RBI uses Wholesale Price Index (WPI) as the key measure of inflation.

Which of the statement(s) given above is/are correct?

(a) 1 only
(b) 1 and 2 only
(c ) 1 and 3 only
(d) 1, 2 and 3

4..Economic growth is usually coupled with:

(a) Deflation

(b) Inflation
(c) Stagflation
(d) Hyperinflation

5..In case of an inflationary situation persisting in an economy, consider the following statements:

  1. Central bank following a tight monetary policy.
  2. An increase in the aggregate level of output in the economy.
  3. Repayment of Public debt.
  4. Purchase of government securities from the public by the central bank.

Which of the above steps could be useful in controlling inflation?

(a)  1, 2 and 4 only
(b)  3 and 4 only
(c)  1 and 2 only
(d)  1, 2, 3 and 4

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