The 'base year' for the current CPI-IW series is: MCQ with Answer and Explanation

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The 'base year' for the current CPI-IW series is:

A. 2016

B. 2012

C. 2001

D. 2011-12

Answer: Option A

Solution (By JKSSB Mock Tests)

The current CPI-IW series has base year 2016.

This question belongs to: Economy GK Economy Set 1

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Question #1

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Which of the following is a feature of the 'Modern Monetary Theory' (MMT) perspective?

A. Monetary financing is always inflationary regardless of capacity utilisation

B. Only balanced budgets are sustainable

C. Governments are always financially constrained like households

D. A sovereign currency issuer faces no purely financial constraint on its spending and the main limit is inflation

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Correct Answer: Option D

Explanation:
Modern Monetary Theory argues that a government that issues its own fiat currency cannot be forced into involuntary default and that the relevant constraint on spending is the availability of real resources and the risk of inflation.

This question belongs to: Economy GK Economy Set 1

Question #2

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Which of the following is a feature of a flexible exchange rate system?

A. Exchange rate is determined by market forces of demand and supply of foreign exchange

B. No role for speculation

C. Complete absence of central bank intervention in all cases

D. Exchange rate is fixed by government decree

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Correct Answer: Option A

Explanation:
Under a pure flexible (floating) exchange rate system, the value of the currency is determined by the interaction of demand and supply in the foreign exchange market.

This question belongs to: Economy GK Economy Set 1