Daily Subject wise Quiz Day 58 Economy VIII (Online Prelims Test)

1) Consider the following statements with respect to Inflation

1. If the money supply increases than the economy's ability to produce goods and services, then inflation will also increase.
2. During the high inflation period, the government can reduce the spending to decrease the money circulation in the country.

Which of the above statements is/are correct?

2) Which of the following statements is/are correct about Devaluation?

1. When there is upwards market pressure on the currency to appreciate, the central bank will artificially devalue.
2. Devaluation of currency means fixing the value of currency is in conjunction with the value of a basket of predetermined currency.

Select the correct answers using the codes given below

3) Which of the following statements is/are correct about Currency Depreciation

1. Currency depreciation is a fall in the value of a currency in a floating exchange rate system.
2. Macroeconomic policies and Equity market are some of the factors that influence the value of a currency.

Select the correct answers using the codes given below

4) Which of the following statements is/are correct about Adjustable Peg

1. It is an exchange rate policy in which a currency is pegged or fixed to a major currency such as the U.S. dollar.
2. It is a hybrid system seeks to take advantage of the benefits from both a fixed peg and freely floating currency.

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5) Consider the following statements with respect to Consumer Price Index (CPI)

1. It is a theoretical Index that measures relative cost of living over times or region
2. The percentage change in this index over a period of time gives the amount of inflation over that specific period.

Which of the above statements is/are correct?