Economics: Multiple Choice Questions with Answers

11. Credit creation power of the commercial banks gets limited by which of the following?

A. Banking habits of the people

B. Cash reserve ratio

C. Credit policy of the central bank

D. All of the above

12. Cost-push inflation occurs because of –

A. Wage push

B. Profit push

C. Both A and B

D. Ineffective policies of the government

13. Which among the following is a cause of inflation?

A. Deficit financing

B. The rise in external loans

C. Unfavorable balance of payment

D. A hike in the CRR by the central bank of the country

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14. What is meant by Autarky in international trade?

A. Monopoly in international trade

B. The imposition of restrictions on international trade

C. Removal of all restrictions from international trade

D. The idea of self-sufficiency and no international trade by a country

15. Number of times a unit of money changes hands in the course of a year is called –

A. Supply of money

B. The purchasing power of money

C. Velocity of money

D. Value of money

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