Demand and Inflation

Q. How does the Reserve Bank of India control inflation?

1. Checks people’s ability to spend
2. Regulates the money supply in the economy
3. Shuts down banks that do not perform well
4. Sells banks to private entities

Q. Inflation occurs when supply of money is the availability of goods and services in an economy.

1. more than
2. lesser than
3. equal to

Q. Isa enjoys a monopoly in shoe manufacturing in a particular region. There is a situation where the demand for goods and services falls. What advice would you give him as his financial advisor?

1. To manufacture more shoes
2. To manufacture less shoes
3. To quit the business
4. To set up more shops

Q.

Who sets the repo rate?

Q. What is the name of the process when the price of a product increases over time? How does it affect people?

1. Depreciation, people are able to buy whatever they want
2. Inflation, not everyone can buy products at high prices
3. Inflation, the prices of commodities get less over time
4. Deflation, people are able to buy whatever they want