Static Quiz 21 June 2025 (Indian Economy)
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Static Quiz 21 June 2025 (Indian Economy) For UPSC Exam
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- Question 1 of 5
1. Question
Which of the following best defines “cost-push inflation”?
CorrectAnswer: (c)
Explanation:
• Cost-push inflation occurs when production costs (e.g., wages, raw materials) increase.
• Producers pass on these higher costs to consumers in the form of increased prices.
• Unlike demand-pull inflation, this type is supply-side driven.
Hence, option (c) is correct.IncorrectAnswer: (c)
Explanation:
• Cost-push inflation occurs when production costs (e.g., wages, raw materials) increase.
• Producers pass on these higher costs to consumers in the form of increased prices.
• Unlike demand-pull inflation, this type is supply-side driven.
Hence, option (c) is correct. - Question 2 of 5
2. Question
Which of the following is most likely to cause demand-pull inflation in India?
CorrectAnswer: (c)
Explanation:
• Demand-pull inflation is caused when aggregate demand exceeds aggregate supply.
• Government expenditure, such as on infrastructure, increases income and demand.
• This can lead to inflation if supply doesn’t match the pace.
Thus, option (c) is correct.IncorrectAnswer: (c)
Explanation:
• Demand-pull inflation is caused when aggregate demand exceeds aggregate supply.
• Government expenditure, such as on infrastructure, increases income and demand.
• This can lead to inflation if supply doesn’t match the pace.
Thus, option (c) is correct. - Question 3 of 5
3. Question
Headline inflation in India is measured by which of the following indices?
CorrectAnswer: (a)
Explanation:
• CPI (Combined) is the official measure for headline retail inflation in India.
• It captures price changes for a basket of goods and services consumed by households.
• Published monthly by the National Statistical Office (NSO).
Option (a) is the correct answer.IncorrectAnswer: (a)
Explanation:
• CPI (Combined) is the official measure for headline retail inflation in India.
• It captures price changes for a basket of goods and services consumed by households.
• Published monthly by the National Statistical Office (NSO).
Option (a) is the correct answer. - Question 4 of 5
4. Question
Inflation targeting in India is the responsibility of which of the following?
CorrectAnswer: (b)
Explanation:
• Under the Monetary Policy Framework Agreement (2015), the RBI is responsible for inflation targeting.
• The target: 4% CPI inflation, with a tolerance band of ±2%.
Hence, option (b) is correct.IncorrectAnswer: (b)
Explanation:
• Under the Monetary Policy Framework Agreement (2015), the RBI is responsible for inflation targeting.
• The target: 4% CPI inflation, with a tolerance band of ±2%.
Hence, option (b) is correct. - Question 5 of 5
5. Question
Consider the following statements regarding core inflation in India:
1. It excludes food and fuel prices.
2. It is useful in assessing underlying long-term inflation trends.
Which of the statements given above is/are correct?CorrectAnswer: (c)
Explanation:
• Core inflation removes volatile components like food and fuel to reveal the underlying trend in prices.
• It helps policymakers assess the structural inflationary pressures.
Both statements are correct, so option (c) is the answer.IncorrectAnswer: (c)
Explanation:
• Core inflation removes volatile components like food and fuel to reveal the underlying trend in prices.
• It helps policymakers assess the structural inflationary pressures.
Both statements are correct, so option (c) is the answer.
