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Inflation, Recession, and GDP MCQs for CET Graduate

Practice 20 free Inflation, Recession, and GDP questions under World Economy — Economy.

Strengthen your Inflation, Recession, and GDP knowledge for CET Graduate with curated MCQs. Switch between Hindi and English anytime.

CET Graduate — World Economy — Inflation, Recession, and GDP

20 Questions • Instant results & explanations • Hindi & English

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Question 1 of 20

Under the Flexible Inflation Targeting (FIT) framework, what does the 'tolerance band' signify for the Reserve Bank of India?

Question 2 of 20

If a government decides to abruptly raise administered taxes on fuel, resulting in an immediate jump in the general price level, how would a macroeconomist accurately classify this event?

Question 3 of 20

What is the specific statutory purpose of the Fiscal Responsibility and Budget Management (FRBM) Act in India?

Question 4 of 20

Which of the following options correctly identifies the consequences of central bank monetization of fiscal deficits?

Question 5 of 20

Given below are two statements, one labeled as Assertion (A) and the other as Reason (R): Assertion (A): High inflation prevents nominal wage rigidity in the economy. Reason (R): High inflation acts as a deeply regressive tax that severely erodes the purchasing power of the most vulnerable citizens. Select the correct answer using the codes given below:

Question 6 of 20

According to the principles of macroeconomic policy, if a central bank observes inflation spiraling out of control, it will likely implement Contractionary Monetary Policy. What is the inevitable, painful side-effect of this intervention?

Question 7 of 20

Assertion (A): During the 2012-2013 period, double-digit CPI inflation heavily impacted the unorganized sector. Reason (R): The Fiscal Responsibility and Budget Management (FRBM) Act mandates that wages must be reduced during high inflation.

Question 8 of 20

Match the following causes of price level increases (List-I) with their correct Macroeconomic Classification (List-II): List-I A. Overheating economy driven by excessive aggregate demand B. Sudden supply chain disruption C. Administered hike in fuel taxes by the government List-II 1. Transient Price Shock 2. Persistent Core Inflation 3. Deflationary Spiral

Question 9 of 20

According to estimates for the Indian economy in FY25, what was the real GDP growth rate tracking closely to its decadal average?

Question 10 of 20

Which economic recovery model is characterized by a sharp economic decline followed by an immediate return to the previous baseline growth trend, typically driven by aggressive fiscal and monetary stimulus?

Question 11 of 20

Based on rigorous historical estimates for the Indian context, what is the assigned mathematical value of the 'Sacrifice Ratio' for deliberate deflationary cycles?

Question 12 of 20

Under the Income Method of calculating national income, the profit earned by business enterprises is formally categorized under which term?

Question 13 of 20

In standard business cycle analysis, what specific metric officially confirms the transition from a standard economic contraction into a formal 'Recession'?

Question 14 of 20

A W-Shaped economic recovery is notoriously volatile and is often triggered by which of the following macroeconomic events?

Question 15 of 20

Why does 'Capital Formation' halt almost entirely during an economic recession?

Question 16 of 20

Consider the following statements regarding the 2008 global financial crisis: 1. It originated from the collapse of the US subprime mortgage market. 2. The Indian government slashed public expenditure to strictly balance the budget during the crisis. Which of the statements given above is/are correct?

Question 17 of 20

Match the following users of Macroeconomic Indicators (List-I) with their primary operational actions (List-II): List-I A. Central Banks B. Investors C. Public Administrators List-II 1. Analyze real-time data to forecast future corporate growth trends. 2. Formulate monetary interventions to adjust interest rates. 3. Implement large-scale strategic fiscal plans for national development.

Question 18 of 20

Which specific event is recognized as the immediate catalyst that plunged the global economy into the 2008 Global Financial Crisis?

Question 19 of 20

Which of the following scenarios describes the 'multiplier effect' in the context of an expansionary fiscal policy?

Question 20 of 20

Which specific macroeconomic problem is directly triggered if a sovereign government finances its excessively high debt by aggressively printing more currency?

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