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Social Sector of Indian Economy – 1 – 2

6. Consider the following factors :

    1. Deficit financing
    2. Black money in an economy
    3. High rate of population growth

Which of the factors given above are responsible for the Demand-Pull inflation in an economy ?

(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) All of these

ANSWER

EXPLANATION

7. Which one among the following is an appropriate description of deflation ?

(a) It is a sudden fall in the value of a currency against other currencies
(b) It is a persistent recession in the economy
(c) It is a persistent fall in the general price level of goods and services
(d) It is fall in the rate of inflation over a period of time

ANSWER

EXPLANATION

8. Which one of the following is likely to be the most inflationary, in its effect ?

(a) Repayment of public debt
(b) Borrowing from the public to finance a budget deficit
(c) Borrowing from banks to finance a budget deficit
(d) Creating new money to finance a budget deficit

ANSWER

EXPLANATION

9. Consider the following items :
    1. Sugar
    2. Sugarcane
    3. Vegetable oils

Which of the items given above is/are the Essential Commodities under the Essential Commodities Act, 1955 ?

(a) Only 1
(b) 1 and 3
(c) 2 and 3
(d) All of these

ANSWER

EXPLANATION

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