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

Problems of Growth - 2 - Free MCQ Practice Test with solutions, B Com Business


MCQ Practice Test & Solutions: Test: Problems of Growth - 2 (10 Questions)

You can prepare effectively for B Com Business Environment with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Test: Problems of Growth - 2". These 10 questions have been designed by the experts with the latest curriculum of B Com 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: Problems of Growth - 2 - Question 1
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According to the text, what is the definition of inflation?

Detailed Solution: 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: 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: 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: 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: 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: 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: 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: 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: 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: 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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About this B Com Practice Test

This test contains 10 MCQs on Problems of Growth - 2 with detailed solutions for each question. It is part of the Business Environment course on EduRev, designed to align with the current B Com 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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