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SSC CGL Exam  >  SSC CGL Test  >   Tier 2 - Study Material, Online Tests, Previous Year  >  Test: Price and Inflation - SSC CGL MCQ

Price and Inflation - Free MCQ Practice Test with solutions, SSC CGL


MCQ Practice Test & Solutions: Test: Price and Inflation (10 Questions)

You can prepare effectively for SSC CGL SSC CGL Tier 2 - Study Material, Online Tests, Previous Year with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Test: Price and Inflation". These 10 questions have been designed by the experts with the latest curriculum of SSC CGL 2026, to help you master the concept.

Test Highlights:

  • - Format: Multiple Choice Questions (MCQ)
  • - Duration: 10 minutes
  • - Number of Questions: 10

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Test: Price and Inflation - Question 1
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What is a major objective of economic planning in India?

Detailed Solution: Question 1

Economic planning in India primarily aims at price stability. Stable prices are considered essential for economic growth and the well-being of the population. Fluctuating prices can create uncertainty, influence income distribution, and disrupt production and investment planning.

Test: Price and Inflation - Question 2
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What is the term for a persistent rise in the general level of prices measured over time?

Detailed Solution: Question 2

A persistent rise in the general level of prices is known as inflation. It is measured as a percentage over a specific unit of time, such as a year or a month.

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Test: Price and Inflation - Question 3
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In the initial stage of inflation with a slow rate of price rise, what is it commonly referred to as?

Detailed Solution: Question 3

The initial stage of inflation, characterized by a slow rate of price rise, is referred to as crawling or creeping inflation. This phase is considered manageable, especially when emerging after a period of depression.

Test: Price and Inflation - Question 4
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What factor on the demand side contributes to inflation when it increases at a rate faster than desired by increasing transactions?

Detailed Solution: Question 4

An increase in the supply of money, especially when it outpaces the growth of transactions, can lead to inflation. In India, the continuous increase in the money supply has proven to be inflationary.

Test: Price and Inflation - Question 5
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What is a consequence of inflation that adversely affects long-term savings and has an extremely adverse effect on wage earners?

Detailed Solution: Question 5

Inflation negatively impacts long-term savings and disproportionately affects wage earners as their wages may not rise in tandem with rising prices, leading to a decline in real income.

Test: Price and Inflation - Question 6
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What factor on the supply side contributes to cost-push inflation when the government frequently raises prices to cover losses in the public sector?

Detailed Solution: Question 6

Cost-push inflation occurs when prices, particularly in the public sector, are frequently raised by the government to cover losses, leading to an increase in overall price levels.

Test: Price and Inflation - Question 7
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What is the term for the last stage of inflation where prices rise at a thousand million or trillion percent annually?

Detailed Solution: Question 7

The last stage of inflation, characterized by an extremely high speed of the general rise in the price level, is known as hyperinflation. This stage can lead to the collapse of the monetary and financial structure.

Test: Price and Inflation - Question 8
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What structural element contributes to the rise in prices due to the inelasticity of supply?

Detailed Solution: Question 8

The inelasticity of supply, a structural rigidity, is notably influenced by a high degree of concentration of ownership of land. This factor contributes to rising prices.

Test: Price and Inflation - Question 9
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What type of inflation is characterized by acceleration in the rate of inflation over time and high rate of unemployment, termed as stagflation and slumpfation?

Detailed Solution: Question 9

Inflation characterized by acceleration in the rate of inflation over time and high unemployment is termed as stagflation and slumpfation. This phenomenon poses a serious challenge to the economy.

Test: Price and Inflation - Question 10
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What is a remedy suggested for stabilizing the general price level in underdeveloped countries like India?

Detailed Solution: Question 10

Restricting the supply of money is suggested as a remedy to stabilize the general price level in underdeveloped countries like India. Controlling money supply can help manage aggregate demand and curb inflation.

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About this SSC CGL Practice Test

This test contains 10 MCQs on Price and Inflation with detailed solutions for each question. It is part of the SSC CGL Tier 2 - Study Material, Online Tests, Previous Year course on EduRev, designed to align with the current SSC CGL syllabus. Each solution explains not just the correct answer but also gives you an understanding of the topic — not just to attempt the question but also help you prepare for the exam with practice.

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