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CET Graduate — Inflation, Recession, and GDP MCQs

Practice 20 free inflation, recession, and gdp multiple choice questions for CET Graduate exam. Instant answers with explanations in Hindi and English.

Master Inflation, Recession, and GDP under World Economy for CET Graduate with our curated MCQ set. Every question follows real Rajasthan exam patterns. 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

Which specific inflation metric is statutorily targeted by the Reserve Bank of India under its monetary policy framework?

Question 2 of 20

Consider the following statements: 1. A discrete devaluation of exchange rates inherently causes persistent core inflation. 2. A low, predictable, and steady rate of inflation mitigates the likelihood of economic recessions. Which of the statements given above is/are correct?

Question 3 of 20

In macroeconomic analysis, why does an increase in Nominal GDP not definitively prove that physical output or economic capacity has actually expanded?

Question 4 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 5 of 20

To foster investment momentum in the 2025-26 cycle, what specific monetary policy action was initiated by the RBI Monetary Policy Committee (MPC)?

Question 6 of 20

Assertion (A): A K-shaped economic recovery inherently requires highly targeted welfare interventions rather than just broad monetary easing. Reason (R): Broad monetary easing systematically resolves income inequality by distributing wealth equally to both MSMEs and large tech corporations.

Question 7 of 20

Why is the distinction between 'core inflation' and a 'transient price shock' critical for policymakers?

Question 8 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 9 of 20

Which specific combination of macroeconomic interventions is typically deployed to spur renewed borrowing and investment during the 'Recovery' phase?

Question 10 of 20

Which of the following elements are definitively excluded from the concept of a country's 'domestic territory' in macroeconomics?

Question 11 of 20

Which of the following components is NOT included in the calculation of Gross Domestic Product (GDP) using the Income Method?

Question 12 of 20

Match the variables of Fisher's Equation of Exchange (List-I) with their definitions (List-II): List-I A. M B. V C. P List-II 1. Velocity of money circulation 2. General price level 3. Money supply Codes: A B C

Question 13 of 20

If the price of onions and tomatoes spikes sharply while the prices of other household commodities and the general price level remain stable, this localized scenario is technically termed as:

Question 14 of 20

Given below are two statements: Assertion (A): Central bank monetization of fiscal deficits is a powerful structural determinant of demand-pull inflation. Reason (R): Monetization severely restricts the money supply, leading to a shortage of liquidity for private businesses. Select the correct answer:

Question 15 of 20

Which of the following statements correctly highlights the fundamental difference between the Consumer Price Index (CPI) and the Wholesale Price Index (WPI) in India?

Question 16 of 20

Assertion (A): During the post-COVID-19 economic recovery, Micro, Small, and Medium Enterprises (MSMEs) and informal daily-wage laborers experienced rapid wealth expansion. Reason (R): The global pandemic resulted in a K-shaped recovery, which symmetrically benefited all sectors of the economy.

Question 17 of 20

Which of the following statements correctly identifies the distributional effect of unexpected high inflation?

Question 18 of 20

Match the GDP calculation methods (List-I) with their core summation targets (List-II): List-I A. Production Method B. Income Method C. Expenditure Method List-II 1. Final expenditure on goods and services 2. Factor incomes like wages, rent, and profit 3. Gross value added across sectors Codes: A B C

Question 19 of 20

Consider the following statements regarding the impact of high inflation: 1. It arbitrarily redistributes wealth, significantly benefiting savers and pensioners. 2. It imposes 'Menu Costs' on firms, representing the logistical burden of updating prices. 3. It causes 'Shoeleather Costs', leading to systemic inefficiency as consumers actively minimize cash holdings. Which of the statements given above are correct?

Question 20 of 20

Given below are two statements, one labeled as Assertion (A) and the other as Reason (R): Assertion (A): Central banks raising interest rates to combat inflation can precipitate an economic recession. Reason (R): Raising interest rates increases the cost of capital, which chokes off corporate borrowing and stifles private investment and consumer spending. Select the correct answer using the codes given below:

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