Comprehension
Case study: Read the given case study and answer the following questions :
“COVID-19 to have significant deflationary impact due to demand evaporation”. Ruling out any impact of stimulus on the price situation. Chief Economic Advisor K.V. Subramaniam on Thursday said the COVID-19 pandemic has severely dented the demand for non-essential goods, creating deflationary conditions. He also said that a good part of the Rs. 20 lakh crore stimulus package is designed in a manner that the fiscal deficit remains under control.
COVID has significant deflationary impact because demand especially for non-essential goods and services will go down significantly. Therefore, it is unlikely that there would be too much inflationary impact through fiscal deficit or stimulus package". Subramaniam told in an interview.
“The proposed stimulus package will generate demand by infusing liquidity into the system and thus perk up the economy”, the CEA said.
“RBI is also taking some strategic actions to control the impact of COVID-19 situation”, CEA further added.
“COVID-19 to have significant deflationary impact due to demand evaporation”. Ruling out any impact of stimulus on the price situation. Chief Economic Advisor K.V. Subramaniam on Thursday said the COVID-19 pandemic has severely dented the demand for non-essential goods, creating deflationary conditions. He also said that a good part of the Rs. 20 lakh crore stimulus package is designed in a manner that the fiscal deficit remains under control.
COVID has significant deflationary impact because demand especially for non-essential goods and services will go down significantly. Therefore, it is unlikely that there would be too much inflationary impact through fiscal deficit or stimulus package". Subramaniam told in an interview.
“The proposed stimulus package will generate demand by infusing liquidity into the system and thus perk up the economy”, the CEA said.
“RBI is also taking some strategic actions to control the impact of COVID-19 situation”, CEA further added.
Question: 1
Stimulus Package will :
Stimulus Package will :
Updated On: Sep 23, 2024
- Increase Liquidity & decrease purchasing power
- Increase liquidity and Purchasing power
- Decrease liquidity and increase purchasing power
- Decrease liquidity and purchasing power
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The Correct Option is B
Solution and Explanation
The correct option is (B) :Increase liquidity and Purchasing power.
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Question: 2
At full employment level of the economy, excess aggregate demand increases (Choose any one correct option) :
At full employment level of the economy, excess aggregate demand increases (Choose any one correct option) :
Updated On: Sep 23, 2024
- Real Income level
- Price level
- Output level
- Employment level
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The Correct Option is B
Solution and Explanation
The correct option is (B) :Price level.
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Question: 3
Stimulus package as given in the case study is a part of :
Stimulus package as given in the case study is a part of :
Updated On: Sep 23, 2024
- Fiscal Policy
- Banking Policy
- Monetary Policy
- Foreign Trade Policy
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The Correct Option is A
Solution and Explanation
The correct option is (A) :Fiscal Policy.
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Question: 4
RBI may take following step to overcome the deflationary situation :
RBI may take following step to overcome the deflationary situation :
Updated On: Sep 23, 2024
- increase SLR.
- Sell securities in Open market
- Decrease margin retirement
- Restrict credit creation
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The Correct Option is C
Solution and Explanation
The correct option is (C) :Decrease margin retirement.
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Question: 5
'Dented the market for non-essential goods means' ______
'Dented the market for non-essential goods means' ______
Updated On: Sep 23, 2024
- Created a new market for luxury goods.
- Decreased demand for discretionary goods or non-essential goods.
- Increased the demand for essential goods.
- Increased exports of non-essential goods.
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The Correct Option is B
Solution and Explanation
The correct option is (B) :Decreased demand for discretionary goods or non-essential goods.
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