n Stagflation : The co-existence of a high rate of unemployment and inflation. (derived from stag(nation) and (in) flation). n Trade Cycle : The more or less regular upward and downward movement of economic activity over a period of years. n Recovery : An increase in business activities after the lowest point, (i.e.
depression.) n Narrow money : M and M are narrow money as they include currency with the public plus demand deposits in banks and other deposits. - - Monetary Economics M O D E L Q U E S T I O N S Part-A Multiple Choice Questions . MV stands for (a) demand for money (b) supply of legal tender money (c) Supply of bank money (d) Total supply of money . Inflation means (a) Prices are rising (b) Prices are falling (c) Value of money is increasing (d) Prices are remaining the same .
inflation results in a serious depreciation of the value of money. (a) Creeping (b) Walking (c) running (d) Hyper . inflation occurs when general prices of commodities increases due to increase in production costs such as wages and raw materials. (a) Cost-push (b) demand pull (c) running (d) galloping .
During inflation, who are the gainers? (a) Debtors (b) Creditors (c) Wage and salary earners (d) Government . The RBI Headquarters is located at (a) Delhi (b) Chennai (c) Mumbai (d) Bengaluru . Money is (a) acceptable only when it has intrinsic value (b) constant in purchasing power (c) the most liquid of all assets (d) needed for allocation of resources .
Paper currency system is managed by the (a) Central Monetary authority (b) State Government (c) Central Government (d) Banks . The basic distinction between M and M is with regard to . (a) post office total deposits (b) saving deposits with post office savings bank (c) Terms deposits of banks (d) currency . Irving Fisher’s Quantity Theory of Money was popularized in (a) (b) (c) (d) .