Exercise 1

Question 6 :

Devaluation of a currency means

A). reduction in the value of a currency vis-a-vis major internationally traded currencies
B). permitting the currency to seek its worth in the international market
C). fixing the value of the currency in conjunction with the movement in the value of a basket of pre-determined currencies
D). fixing the value of currency in multilateral consultation with the IMF, the World Bank and major trading partners
Answer : Option A

Question 7 :

In the second nationalization of commercial banks, ___ banks were nationalized.

A). 4
B). 5
C). 6
D). 8
Answer : Option C

Question 8 :

Since independence, both development and non-development expenditures have increased; the increase in the former being a little more than in the other. Non-development expenditure involves

interest payments

A). I, II
B). I
C). I, II, III
Answer : Option C

Question 9 :

Depreciation means

A). closure of a plant due to lock out
B). closure of a plant due to labour trouble
C). loss of equipment over time due to wear and tear
D). destruction of a plant in a fire accident
Answer : Option C

Question 10 :

Deficit financing leads to inflation in general, but it can be checked if

A). government expenditure leads to increase in the aggregate supply in ratio of aggregate demand
B). only aggregate demand is increased
C). all the expenditure is denoted national debt payment only
D). All of the above
Answer : Option D