Currency and Inflation Set 1
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This set of Indian Economy Multiple Choice Questions & Answers (MCQs) focuses on Currency and Inflation Set 1
Q1 | One-rupee currency notes bear the signature of:
- Prime Minister of India
- President of India
- Finance Minister of India
- Finance Secretary of India
Q2 | Ten rupee notes bear the signature of:
- President
- Finance Minister
- Secretary, Ministry of Finance
- Governor, Reserve Bank of India
Q3 | When was the decimal system of currency introduced in India?
- 1948
- 1950
- 1954
- 1957
Q4 | Which of the following prints currency notes of the denomination of Rs. 100?
- The Bank Note Press, Dewas
- The Indian Security Press, Nasik Road
- The Security Printing Press, Hyderabad
- All of the above
Q5 | The highest denomination of currency notes in circulation as legal tender in India is at present:
- Rs. 50
- Rs.100
- Rs. 500
- Rs.1000
Q6 | The special paper required for printing of currency notes by the Security Presses In the country is manufactured at :
- Hyderabad
- Kolkata
- Hoshangabad
- Dewas
Q7 | Which of the following mints undertakes refining of gold for licensed gold dealers and production of medals for defence services?
- The Hyderabad Mint
- The Mumbai Mint
- The Kolkata Mint
- None of the above
Q8 | To meet the growing needs for coins in the country, where does the Governmentpropose to set up another mint?
- Nasik
- Hoshangabad
- Dewas
- Noida
Q9 | For international payments, the Indian currency is linked to :
- American Dollar
- British Sterling
- Gold Standard
- None of the above
Q10 | How many languages are used on a ten rupee note?
- 2
- 7
- 10
- 15
Q11 | Convertibility of the rupee implies: [IAS 1994]
- being able to convert rupee notes into gold
- freely permitting the conversion of rupee to other major currencies and vice versa
- allowing the value of the rupee to be fixed by market forces
- developing an international market for currencies in India
Q12 | Black money is :
- counterfeit currency
- illegally earned money
- money earned through underhand deals
- income on which payment of tax is usually evaded
Q13 | Broad money in India is :
- M1
- M2
- M3
- M4
Q14 | The Issue Department of the RBI maintains a _______ against printing of notes:
- Minimum Reserve System
- Proportional Reserve System
- Proportional Gold Reserve System
- Proportional Foreign Securities Reserve System
Q15 | Devaluation of currency by a country is meant to lead to : 1. expansion of import trade 2. promotion of import substitution 3. expansion of export trade
- 1 only
- 2 and 3
- 1 and 2
- 1 and 4
Q16 | Which of the following is incorrect about convertibility?
- The exchange rate should be determined by the forces of demand and supply of the currency
- The exchange rate' would indicate the strength of the economy
- It would discourage black market transactions
- The RBI will be a direct player now rather than being an indirect one
Q17 | The States' debt does not include:
- loans from State Bank of India
- loans from the Central Government
- Provident Funds
- treasury bills issued to international financial institutions
Q18 | Consider the following statement: The price of any currency in international market is determined by the: 1. WTO 2. Demand for goods/services provided by the country concerned 3. Inflation differential between the country concerned and its major trading partners 4. Stability of the government of the concerned country Of these statements:
- 1, 2, 3, and 4 are correct
- 1, 2 and 4 are correct
- 1, 3 and 4 are correct
- 2, 3 and 4 are correct
Q19 | Hard Currency is defined as currency:
- which can hardly be used for international transactions
- which is used in times of war
- which loses its value very fast
- traded in foreign exchange market for which demand is persistently relative to the supply
Q20 | The Indian Rupee is fully convertible: 1. In respect of Current Account of Balance of Payments 2. In respect of Capital Account of Balance of Payments 3. Into Gold Which of these statements is/are correct ?
- 1 only
- 3 only
- 1 and 2 only
- 1, 2 and 3
Q21 | Consider the following statements:The price of any currency in international market is decided by the [IAS 1998] 1. World Bank 2. Demand for goods/services provided by the country concerned 3. stability of the government of the concerned country 4. economic potential of the country in question Of these statements:
- 1, 2, 3 and 4 are correct
- 2 and 3 are correct
- 3 and 4 are correct
- 1 and 4 are correct
Q22 | Inflation implies: [Railways 1994]
- rise in budget deficit
- rise in money supply
- rise in general price index
- rise in prices of consumer goods
Q23 | The situation with increasing unemployment and inflation is termed as: [CPO AC 2003]
- hyperinflation
- galloping inflation
- stagflation
- reflation
Q24 | Which of the following factors contributes to an inflationary trend?
- 15% fall in production of industrial goods
- 15% increase in prices of agricultural products
- 15% increase in supply of money in the market
- none of these
Q25 | Which of the following can be used for checking inflation temporarily?
- Increase in wages
- Decrease in money supply
- Decrease in taxes
- None of the above