Indian Economy

6. Devaluation of a currency means

A. reduction in the value of a currency vis-a-vis major internationally traded currencies
B. permitting the currency to seek its worth in the international market
C. fixing the value of the currency in conjunction with the movement in the value of a basket of predetermined currencies
D. fixing the value of the currency in multilateral consultation with the IMF, the World Bank and major trading partners

Correct Answer: A. reduction in the value of a currency vis-a-vis major internationally traded currencies

7. In the second nationalization of commercial banks, ___ banks were nationalized.

A.4
B.5
C.6
D.8

Correct Answer: C .6

8. Since independence, both development and non-development expenditures have increased; the increase in the former being a little more than in the other. Non-development expenditure involves

I. interest payments
II. subsidies
III. defense
IV. irrigation

A. I, II
B. I
C. I, II, III
D. II, III, IV

Correct Answer: C. I, II, III

9. Depreciation means

A. closure of a plant due to the lockout
B. closure of a plant due to labor trouble
C. loss of equipment over time due to wear and tear
D. destruction of a plant in a fire accident

Correct Answer: C. loss of equipment over time due to wear and tear

10. Deficit financing leads to inflation in general, but it can be checked if

A. government expenditure leads to increase in the aggregate supply in the ratio of aggregate demand
B. only aggregate demand is increased
C. all the expenditure is denoted national debt payment only
D. All of the above

Correct Answer: D. All of the above

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