Economics for Engineers (3140911) MCQs

MCQs of Inflation And Price Change

Showing 11 to 20 out of 25 Questions
11.
The relation between inflation rate (a), real interest rate (b) and market interest rate (c) can be best given as
(a) c = a+b+ab
(b) b = a+c+ac
(c) c = a+b
(d) b = a+c
Answer:

Option (a)

12.
The interest rate offered by banks on saving account or fixed deposits are example of __________ .
(a) real interest rate
(b) market interest rate
(c) inflation-free interest rate.
(d) none of the above
Answer:

Option (b)

13.
Suppose a person invest some amount for one year in a bank that is currently offering interest of 5.5% compounded annually. Assuming inflation rate of 2% per year what will be the real interest that the investment would earn ?
(a) 3.4%
(b) 3.5%
(c) 7.4%
(d) 7.5%
Answer:

Option (a)

14.
It a sports equipment cost Rs. 1000 today, what will be its approximate cost after one year assuming inflation rate of 2% ?
(a) 980
(b) 998
(c) 1002
(d) 1020
Answer:

Option (d)

15.
Unit price of an item is Rs. 5 today. If Rs. 1000 is deposited in bank for one year at annual interest rate of 5.5%, approximately how many more items can be purchased after one year assuming inflation rate of 2% ?
(a) 11
(b) 9
(c) 7
(d) 5
Answer:

Option (c)

16.
Rs. 1000 kept idle and uninvited for last 70 years with average inflation rate of 4.5% during the period, will be approximately worth Rs. _________ today.
(a) 45
(b) 55
(c) 243
(d) 757
Answer:

Option (a)

17.
From the following what is true about price index?
(a) It describe the relative price fluctuation of goods and services.
(b) It provide a historical record of prices over time.
(c) It is used to predict future prices on basis of the past price fluctuations.
(d) All of the above.
Answer:

Option (d)

18.
If the cost index of a particular service 10 years before was 550 and currently it is 700, what will be the approximate average rate of increase in service rates?
(a) 2.44 %
(b) 2.74%
(c) 24.7%
(d) 27.4%
Answer:

Option (a)

19.
If the construction cost index in 2010 was 3746 and in 2020 was 5260, then a construction project worth Rs. 5.25 crore in 2010 will be approximately cost Rs. _________ in 2020.
(a) 6.87 crore
(b) 7.38 crore
(c) 8.73 crore
(d) 9.12 crore
Answer:

Option (c)

20.
Following are examples of commodity index except __________ .
(a) Construction labor cost index
(b) Iron ore cost index
(c) Food cost index
(d) Postal service cost index
Answer:

Option (c)

Showing 11 to 20 out of 25 Questions