Question 1

Velocity of circulation of money means the number of times a unit of money

Accepted Answer

A) Changes hands daily 
B) Changes hands monthly 
C) Changes hands annually 
D) Changes purchasing power 
A) Changes hands daily 
B) Changes hands monthly 
C) Changes hands annually 
D) Changes purchasing power C

Question 2

Which one is equation of exchange?

Accepted Answer

A) PT = MV 
B) PV = MT 
C) PM = TV 
D) None of these 
A) PT = MV 
B) PV = MT 
C) PM = TV 
D) None of these A

Question 3

The equation of exchange PT = MV was given by:

Accepted Answer

A) Fisher 
B) Crowther 
C) Kuznets 
D) Keynes 
A) Fisher 
B) Crowther 
C) Kuznets 
D) Keynes A

Question 4

According to Keynes, demand for money is affected by:

Accepted Answer

A) Income 
B) Rate of interest 
C) Literacy rate 
D) Both (a) & (b) 
A) Income 
B) Rate of interest 
C) Literacy rate 
D) Both (a) & (b)

Question 5

Under normal circumstances, the velocity of circulation of money in a country is:

Accepted Answer

A) 100% 
B) Negative 
C) Less than 10 
D) Zero 
A) 100% 
B) Negative 
C) Less than 10 
D) Zero

Question 6

Value of money and supply of money are related:

Accepted Answer

A) Inversely 
B) Directly 
C) Govt. law 
D) Are not related 
A) Inversely 
B) Directly 
C) Govt. law 
D) Are not related

Question 7

Inflation:

Accepted Answer

A) Makes distribution of income equal 
B) Makes distribution of income unequal 
C) Has no effect on distribution of income 
D) Affects only industrial sector 
A) Makes distribution of income equal 
B) Makes distribution of income unequal 
C) Has no effect on distribution of income 
D) Affects only industrial sector

Question 8

Purchasing power of money during deflation is:

Accepted Answer

A) Reduced 
B) Increased 
C) Constant 
D) Fluctuating 
A) Reduced 
B) Increased 
C) Constant 
D) Fluctuating

Question 9

Inflation is a situation when:

Accepted Answer

A) Prices of some goods rise 
B) General price level rises continuously 
C) Prices double every year 
D) Prices rise and fall 
A) Prices of some goods rise 
B) General price level rises continuously 
C) Prices double every year 
D) Prices rise and fall

Question 10

During inflation:

Accepted Answer

A) Lenders lose, borrowers gain 
B) Borrowers lose, lenders gain 
C) Borrowers and lenders both lose 
D) All sections of the society gain 
A) Lenders lose, borrowers gain 
B) Borrowers lose, lenders gain 
C) Borrowers and lenders both lose 
D) All sections of the society gain

Question 11

Inflation can be controlled by applying:

Accepted Answer

A) Monetary and fiscal policies 
B) Monetary and Labour policy 
C) Fiscal and commercial policies 
D) All of the above 
A) Monetary and fiscal policies 
B) Monetary and Labour policy 
C) Fiscal and commercial policies 
D) All of the above

Question 12

In the equation PY = MV showing quantity theory of money. Y represents:

Accepted Answer

A) Year of measurement of national income 
B) National income 
C) Tax revenue of the govt 
D) (a) and (c) of above 
A) Year of measurement of national income 
B) National income 
C) Tax revenue of the govt 
D) (a) and (c) of above

Question 13

Demand-pull inflation may be caused by:

Accepted Answer

A) An increase in costs 
B) A reduction in interest rates 
C) A reduction in government spending 
D) An outward shift in aggregate supply 
A) An increase in costs 
B) A reduction in interest rates 
C) A reduction in government spending 
D) An outward shift in aggregate supply

Question 14

Inflation:

Accepted Answer

A) Always reduces the cost of living 
B) Always reduces the standard of living 
C) Reduces the price of products 
D) Reduces the purchasing power of a Rupee 
A) Always reduces the cost of living 
B) Always reduces the standard of living 
C) Reduces the price of products 
D) Reduces the purchasing power of a Rupee

Question 15

When the nation's money supply is Rs. 1200 billion and GDP is Rs. 4800 billion, velocity of circulation money is:

Accepted Answer

A) 0.25 
B) 4 
C) 0.4 
D) 4 billion rupees 
A) 0.25 
B) 4 
C) 0.4 
D) 4 billion rupees

Question 16

For the economy, prices are beneficial:

Accepted Answer

A) Falling slowly 
B) Rising slowly 
C) Rising fast 
D) Falling fast 
A) Falling slowly 
B) Rising slowly 
C) Rising fast 
D) Falling fast

Question 17

If quantity of money increases 100%, other things remaining constant, value of money changes by:

Accepted Answer

A) Increases by 100% 
B) Decreases by 100% 
C) Decreases by 200% 
D) Does not change 
A) Increases by 100% 
B) Decreases by 100% 
C) Decreases by 200% 
D) Does not change

Question 18

Value of money means:

Accepted Answer

A) Gold purchased by money 
B) General purchasing power of money 
C) Importance of money 
D) Demand for money 
A) Gold purchased by money 
B) General purchasing power of money 
C) Importance of money 
D) Demand for money

Question 19

It is assumption of quantity theory of money:

Accepted Answer

A) Quantity of traded goods increases 
B) Velocity of circulation of money constant 
C) Govt. imposes new taxes 
D) (a) and (b) of the above 
A) Quantity of traded goods increases 
B) Velocity of circulation of money constant 
C) Govt. imposes new taxes 
D) (a) and (b) of the above

Question 20

When value of money falls, they benefit more:

Accepted Answer

A) Farmers 
B) Industrialist 
C) Lenders 
D) Debtors 
A) Farmers 
B) Industrialist 
C) Lenders 
D) Debtors

Velocity of circulation of money means the number of times a unit of money

Which one is equation of exchange?

The equation of exchange PT = MV was given by:

According to Keynes, demand for money is affected by:

Under normal circumstances, the velocity of circulation of money in a country is:

Value of money and supply of money are related:

Inflation:

Purchasing power of money during deflation is:

Inflation is a situation when:

During inflation:

Inflation can be controlled by applying:

In the equation PY = MV showing quantity theory of money. Y represents:

Demand-pull inflation may be caused by:

Inflation:

When the nation's money supply is Rs. 1200 billion and GDP is Rs. 4800 billion, velocity of circulation money is:

For the economy, prices are beneficial:

If quantity of money increases 100%, other things remaining constant, value of money changes by:

Value of money means:

It is assumption of quantity theory of money:

When value of money falls, they benefit more:

Economics : Macroeconomics, Factors, Goods, and Indicators

Understanding National Income, GDP, and Economic Sectors in India

National Income and Final Goods

Money and Monetary Policy: Understanding the Characteristics and Functions of Currency and Government Securities

Macroeconomic Concepts and Theories

Economics and Public Finance

Understanding Public Finance and Business Cycles

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Exam 5: Money and Inflation

Velocity of circulation of money means the number of times a unit of money

Which one is equation of exchange?

The equation of exchange PT = MV was given by:

According to Keynes, demand for money is affected by:

Under normal circumstances, the velocity of circulation of money in a country is:

Value of money and supply of money are related:

Inflation:

Purchasing power of money during deflation is:

Inflation is a situation when:

During inflation:

Inflation can be controlled by applying:

In the equation PY = MV showing quantity theory of money. Y represents:

Demand-pull inflation may be caused by:

Inflation:

When the nation's money supply is Rs. 1200 billion and GDP is Rs. 4800 billion, velocity of circulation money is:

For the economy, prices are beneficial:

If quantity of money increases 100%, other things remaining constant, value of money changes by:

Value of money means:

It is assumption of quantity theory of money:

When value of money falls, they benefit more:

Economics : Macroeconomics, Factors, Goods, and Indicators

Understanding National Income, GDP, and Economic Sectors in India

National Income and Final Goods

Money and Monetary Policy: Understanding the Characteristics and Functions of Currency and Government Securities

Macroeconomic Concepts and Theories

Economics and Public Finance

Understanding Public Finance and Business Cycles

Filters