List of top Economics Questions on Money and Inflation

In the case of classical economics, an increase in the nominal money stock causes
Why is the Phillips curve negatively sloped?
The existence of purchasing power parity in an open economy implies that
(A) The purchasing power of individuals depends on inflation rate
(B) The exchange rate between two countries' currency is equal to the ratio of their price levels
(C) Law of one price holds
(D) The price levels of all countries are equal when measured in terms of the same currency
Choose the correct answer from the options given below:
Arrange the following rates in ascending order.
(A) Repo Rate
(B) Lending Rate
(C) Deposit Rate
(D) Reverse Repo Rate
Which of the followings are correct in the context of inflation?
(A) Higher aggregate demand may lead to demand-pull inflation.
(B) Higher cost of production may lead to cost-push inflation.
(C) Higher international food and fuel prices may lead to inflation.
(D) Higher indirect taxes and lower subsidy may lead to inflation.
If the expected rate of return from the investment projects in India be 10% per annum, and if the exchange rate becomes Rs.88 per USD from Rs.80 per USD in one year, what would be the expected amount of profit in terms of US Dollar from an investment project of 100 Million USD in India from the point of view of an investor from the USA?
What would happen to the rate of interest, in new equilibrium, if the money supply rises in the Mundell-Fleming model under the flexible exchange rate and absolutely free capital mobility, if the international interest rate remains the same?
What does a bank do if there are no excess reserves?
Match List-I with List-II:

List-I

List-II

AMoney supply is exogenously given.IPost-Keynesian school
BMoney supply is demand driven and credit led.IISay’s law
CRational expectation.IIIMonetarism
DSupply creates its own demandIVNeo-classical school

Choose the correct answer from the options given below
“During the colonial period the agricultural sector showed massive stagnation.” Do you agree with the given statement? Justify your answer with valid arguments.
“There exists a positive correlation between human capital formation and economic growth of a nation.” Justify the given statement with valid explanation.
“Amita is a regular worker in a private firm that employs twelve hired workers.” Is she working in the formal/informal sector? Give valid reasons in support of your answer.
\[ \begin{array}{|c|c|c|c|c|c|} \hline \textbf{Sector} & \textbf{India} & \textbf{China} & \textbf{Pakistan} & \textbf{India} & \textbf{China} & \textbf{Pakistan} \\ \hline \text{Agriculture} & 16 & 7 & 24 & 43 & 26 & 41 \\ \hline \text{Industry} & 30 & 41 & 19 & 25 & 28 & 22 \\ \hline \text{Services} & 54 & 52 & 57 & 32 & 46 & 35 \\ \hline \end{array} \]
State any two strategies to achieve the objective of sustainable development.
“Self-Help Groups provide stimulus to socio-economic development in rural areas.”
Justify the given statement with a valid explanation.
___ farming is a system that is helpful in restoring, maintaining, and enhancing the ecological balance.
(Choose the correct alternative to fill in the blank):

During the British rule, India’s foreign trade had various features except _________ .

Elaborate how and why carbon pricing should be promoted.
Differentiate between public provision and public production.
Explain the ‘redistribution of income’ objective of the Government Budget.
Distinguish between direct tax and indirect tax with the help of suitable examples.
"If actual demand for final goods falls short of the actual output of final goods corresponding to full employment level, it may lead to an unintended accumulation of inventories."
Do you agree with the given statement? Give valid reasons in support of your answer.

Identify the incorrect statement with reference to Cash Reserve Ratio (CRR):

Suppose in an imaginary economy, autonomous consumption = Rs. 500 crore and marginal propensity to consume = 0.8. The saving function for the economy would be ________ . (Choose the correct alternative to fill in the blank):

Read the following statements carefully: 
Statement 1: Money is a commodity which is generally accepted as a medium of exchange. 
Statement 2: Money solved the problem of double coincidence of wants. 
In the light of the given statements, choose the correct alternative from the following: