MCQs on Inflation – Chapter 6 – Economics MCQs

MCQs on Inflation, which are covered in this chapter, relate to the topic, Inflation. MCQs on Inflation Test contains 10 questions. Answers to MCQs on Inflation are available at the end of the last question.

1.When prices are falling continuously, the phenomenon is called:

(a)    Inflation

(b)    Stagflation

(c)     Deflation

(a)    Reflation

2. When too much money chases too few goods, the resulting Inflation is called:

(a)    Deflation

(b)    Demand-pull Inflation

(c)     Cost push inflation

(a)    Stagflation

3. Cause of Inflation in India is / are:

(a)    Deficit financing

(b)    Erratic agriculture growth

(c)     Inadequate rise in industrial production

(a)    All of the above

4. Stagflation means:

(a)    Inflation with stagnation

(b)    Recession with stagnation

(c)     Inflation galloping like stage

(a)    Inflation & increasing output

5. Which is the most effective quantitative method to control inflation in the economy?

(a)    Bank rate policy

(b)    Selective credit control

(c)     Cash reserve ratio

(a)    Both (a) and (b)

6. The maximum inflation at _____ was recorded for the year 1966-67 :

(a)    12.1

(b)    13.9

(c)     8.0

(a)    10

7. Inflation rate as per April’07 was:

(a)    6.39%

(b)    6%

(c)     6.79%

(a)    4.7%

8. Which measures are followed by the government for handling inflation?

(a)    Monetary measures

(b)    Fiscal measures

(c)     Controlling Investments

(a)    All of these

9. Inflation is measured on the basis of:

(a)    Wholesale price index

(b)    Consumer price index

(c)     Marshall’s index

(a)    All of these

10. When price increases due to increase in factor prices it is ______.

(a)    Demand pull inflation

(b)    Cost pull inflation

(c)     Stagflation

(a)    None of the above.


1. (c) Deflation

2. (b) Demand-pull Inflation

3. (d) All of the above

4. (a) Inflation with stagnation

5. (c) Cash reserve ratio

6. (b) 13.9

7. (a) 6.39%

8. (d) All of these

9. (b) Consumer price index

10 (b) Cost pull inflation

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2 thoughts on “MCQs on Inflation – Chapter 6 – Economics MCQs”

  1. when demand is more than supply this is demand push push inflation. Cost push is because of increase of prices of some important goods and supply where no suitable alternative is available. Higher prices result in increased production cost.


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