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B Com Exam  >  B Com Tests  >  Business Environment  >  Test: Problems of Growth - 2 - B Com MCQ

Test: Problems of Growth - 2 - B Com MCQ


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10 Questions MCQ Test Business Environment - Test: Problems of Growth - 2

Test: Problems of Growth - 2 for B Com 2024 is part of Business Environment preparation. The Test: Problems of Growth - 2 questions and answers have been prepared according to the B Com exam syllabus.The Test: Problems of Growth - 2 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Problems of Growth - 2 below.
Solutions of Test: Problems of Growth - 2 questions in English are available as part of our Business Environment for B Com & Test: Problems of Growth - 2 solutions in Hindi for Business Environment course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Problems of Growth - 2 | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Business Environment for B Com Exam | Download free PDF with solutions
Test: Problems of Growth - 2 - Question 1
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According to the text, what is the definition of inflation?

Detailed Solution for Test: Problems of Growth - 2 - Question 1
Inflation is defined as a rise in the general level of prices. This means that most goods and services become more expensive over time.
Test: Problems of Growth - 2 - Question 2
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Which price index is used to measure inflation in India?

Detailed Solution for Test: Problems of Growth - 2 - Question 2
In India, inflation is measured using the Wholesale Price Index (WPI). This index measures the price rise at the wholesale or retailer level.
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Test: Problems of Growth - 2 - Question 3
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What are the two main causes of inflation mentioned in the text?

Detailed Solution for Test: Problems of Growth - 2 - Question 3
The two main causes of inflation are cost-push and demand-pull. Cost-push inflation occurs when production costs increase, while demand-pull inflation occurs when there is excess demand compared to supply.
Test: Problems of Growth - 2 - Question 4
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What are the effects of inflation on creditors and debtors?
Detailed Solution for Test: Problems of Growth - 2 - Question 4
Inflation redistributes wealth from creditors to debtors. This means that creditors, who have lent money, suffer as the value of money decreases over time, while debtors benefit as they can repay their loans with less valuable money.
Test: Problems of Growth - 2 - Question 5
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What is the impact of inflation on investment?
Detailed Solution for Test: Problems of Growth - 2 - Question 5
Inflation encourages investment in the short run because it increases the profitability of expanding production. Inflation reduces the cost of borrowing, making it cheaper for businesses to invest and expand their operations.
Test: Problems of Growth - 2 - Question 6
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How does inflation affect savings?
Detailed Solution for Test: Problems of Growth - 2 - Question 6
Inflation discourages people from saving because the value of money decreases over time. When prices rise, the purchasing power of savings decreases, leading to a decline in real savings.
Test: Problems of Growth - 2 - Question 7
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What is the impact of inflation on exchange rates?
Detailed Solution for Test: Problems of Growth - 2 - Question 7
Inflation usually leads to the depreciation of a country's currency. When prices rise, the value of the currency decreases relative to other currencies, making exports cheaper and imports more expensive.
Test: Problems of Growth - 2 - Question 8
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How does inflation affect wages?
Detailed Solution for Test: Problems of Growth - 2 - Question 8
Inflation decreases the real value of wages. While nominal wages may increase to compensate for inflation, the purchasing power of wages decreases as prices rise. This means that workers can buy less with their wages over time.
Test: Problems of Growth - 2 - Question 9
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What is the impact of the black economy on tax revenue in India?
Detailed Solution for Test: Problems of Growth - 2 - Question 9
The black economy in India has resulted in a significant loss of tax revenue. With a large portion of economic activities going unreported or not taxed, the government faces a shortage of funds to provide public services and meet its budgetary requirements.
Test: Problems of Growth - 2 - Question 10
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What is the definition of parallel economy?
Detailed Solution for Test: Problems of Growth - 2 - Question 10
The parallel economy refers to economic activities that are unreported or not measured by the government's current techniques to monitor economic activity. These activities are not included in official statistics and may include both legal and illegal activities.
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