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1. The average rate of inflation in USA and Japan between the years 1960-73 is 3.2% and 6.1%
respectively, then the growth rate of
a) No definite conclusion can be made c) Japan will be more
b) USA will be more d)Japan will be less
2. Which of the following would likely have the least direct influence on a country’s current
account?
a) inflation c) exchange rates
b) national income d) a tax on income earned from foreign stock
is it D?
3.Suppose that the demand for cars in India has the following form: CD
= 9P-1, where C is
millions of cars. The supply of cars in India takes the following form: CS
= P. The
international price of cars is P*= 2.
If there were no restrictions how many cars would be imported, how many would be
produced?
a) 4 c) 4.5
b) 2 d) 0
4. In an economy aggregate monetary resources are equal to the sum of
i) RBI currency notes in circulation iii) Time deposits with banks
ii) Rupee coins and notes and small coins in
circulation
iv) Demand deposits with banks and other
deposits with RBI
a) Both (i) and (ii) above c) Only (i) and (ii) and (iii) above
b) Only (ii) and (iii) and (iv) above d) All of (i) and (ii) and (iii) and (iv)
above
5. If SBI has total deposits of Rs 40 million and the reserve ratio is 20%, what is the total amount
that the money supply can increase by if SBI lends out all the money that it can?
a) Rs 200 million c) Rs 40 million
b) Rs 42 million d) Rs 160 million
6. During the millennium scare of 2000, Surendra reduced his monthly spending by Rs1, 000
and buried his money in the backyard. If the MPC is 0 .75, how much did national income
fall?
a) Rs1,000 c) zero
b) Rs 4,000 d) It actually increased Rs 4,000.
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