MCQOPTIONS
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MCQOPTIONS
This section includes 50 Mcqs, each offering curated multiple-choice questions to sharpen your Indian Economy knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
How does gold's intrinsic value influence its market price? |
| A. | Increases its market price |
| B. | Decreases its market price |
| C. | Has no effect |
| D. | Only impacts during inflation |
| Answer» B. Decreases its market price | |
| 2. |
During times of hyperinflation, what happens to gold prices? |
| A. | Fall sharply |
| B. | Rise sharply |
| C. | Remain stable |
| D. | Become irrelevant |
| Answer» C. Remain stable | |
| 3. |
What is the relationship between gold and fiat currency? |
| A. | Directly related |
| B. | Inversely related |
| C. | No relationship |
| D. | Determined by oil prices |
| Answer» C. No relationship | |
| 4. |
How do central banks’ monetary policies influence gold prices? |
| A. | Increase demand for gold |
| B. | Decrease demand for gold |
| C. | No effect |
| D. | Cause instability in gold markets |
| Answer» B. Decrease demand for gold | |
| 5. |
What happens to gold prices when inflation expectations rise? |
| A. | Gold prices decrease |
| B. | Gold prices increase |
| C. | No effect |
| D. | Depends on stock market performance |
| Answer» C. No effect | |
| 6. |
How do large-scale government borrowings affect gold prices? |
| A. | Increase gold prices |
| B. | Decrease gold prices |
| C. | Have no impact |
| D. | Vary based on interest rates |
| Answer» B. Decrease gold prices | |
| 7. |
What is the correlation between gold prices and the cost of living? |
| A. | Direct correlation |
| B. | Inverse correlation |
| C. | No correlation |
| D. | Gold affects the cost of living |
| Answer» B. Inverse correlation | |
| 8. |
Why is gold considered a better long-term investment than cash? |
| A. | It outperforms inflation |
| B. | It generates higher dividends |
| C. | It has low volatility |
| D. | It is easier to trade |
| Answer» B. It generates higher dividends | |
| 9. |
How does gold mining production impact gold prices? |
| A. | Increased production increases prices |
| B. | Increased production decreases prices |
| C. | Has no effect |
| D. | It depends on inflation |
| Answer» C. Has no effect | |
| 10. |
What role does investor sentiment play in gold prices? |
| A. | No role |
| B. | Drives price volatility |
| C. | Stabilizes prices |
| D. | It decreases demand |
| Answer» C. Stabilizes prices | |
| 11. |
What happens to gold prices when central banks buy more gold reserves? |
| A. | Gold prices decrease |
| B. | Gold prices increase |
| C. | No change |
| D. | Gold becomes irrelevant |
| Answer» C. No change | |
| 12. |
How does gold function in times of stagflation? |
| A. | It loses value |
| B. | It gains value |
| C. | It remains stable |
| D. | It is replaced by other assets |
| Answer» C. It remains stable | |
| 13. |
What happens to the value of gold in periods of low inflation? |
| A. | It increases |
| B. | It decreases |
| C. | It remains stable |
| D. | It becomes more volatile |
| Answer» D. It becomes more volatile | |
| 14. |
What is one advantage of holding physical gold? |
| A. | It earns interest |
| B. | It is not affected by inflation |
| C. | It has intrinsic value |
| D. | It is easily tradable in all markets |
| Answer» D. It is easily tradable in all markets | |
| 15. |
How do speculators affect gold prices? |
| A. | They stabilize gold prices |
| B. | They increase volatility |
| C. | They decrease gold prices |
| D. | They have no impact |
| Answer» C. They decrease gold prices | |
| 16. |
How do changes in foreign exchange rates influence gold prices? |
| A. | Increases gold demand |
| B. | Decreases gold demand |
| C. | Has no effect |
| D. | Depends on oil prices |
| Answer» B. Decreases gold demand | |
| 17. |
What happens to gold prices during global financial crises? |
| A. | Fall sharply |
| B. | Remain stable |
| C. | Rise sharply |
| D. | Fall gradually |
| Answer» D. Fall gradually | |
| 18. |
How do high-interest rates influence gold investments? |
| A. | Increase demand for gold |
| B. | Decrease demand for gold |
| C. | Increase gold prices |
| D. | No effect |
| Answer» C. Increase gold prices | |
| 19. |
How does economic uncertainty influence gold investments? |
| A. | Decreases interest in gold |
| B. | Increases interest in gold |
| C. | No impact |
| D. | Increases demand for other commodities |
| Answer» C. No impact | |
| 20. |
What impact does a weakening US dollar have on gold prices? |
| A. | Increases gold prices |
| B. | Decreases gold prices |
| C. | Has no effect |
| D. | Depends on inflation |
| Answer» B. Decreases gold prices | |
| 21. |
How does the rise in consumer prices (CPI) influence gold demand? |
| A. | Increases demand |
| B. | Decreases demand |
| C. | No effect |
| D. | Decreases the value of gold |
| Answer» B. Decreases demand | |
| 22. |
What impact do government deficits have on gold prices? |
| A. | Increase |
| B. | Decrease |
| C. | No effect |
| D. | Vary by country |
| Answer» B. Decrease | |
| 23. |
During periods of high inflation, which asset typically performs better than gold? |
| A. | Stocks |
| B. | Bonds |
| C. | Real estate |
| D. | Cryptocurrency |
| Answer» D. Cryptocurrency | |
| 24. |
Which commodity is often compared to gold as a safe-haven investment? |
| A. | Oil |
| B. | Silver |
| C. | Platinum |
| D. | Copper |
| Answer» C. Platinum | |
| 25. |
How do gold prices typically move in relation to global stock markets? |
| A. | They move in the same direction |
| B. | They move inversely |
| C. | There is no relation |
| D. | They depend on oil prices |
| Answer» C. There is no relation | |
| 26. |
Which of the following is a reason gold is considered a good inflation hedge? |
| A. | Its value decreases over time |
| B. | It is limited in supply |
| C. | It generates high dividends |
| D. | It is not tied to any currency |
| Answer» C. It generates high dividends | |
| 27. |
What is the effect of quantitative easing on gold prices? |
| A. | Lowers gold prices |
| B. | Raises gold prices |
| C. | No effect |
| D. | Depends on inflation |
| Answer» C. No effect | |
| 28. |
How does gold impact the bond market? |
| A. | Increases bond yields |
| B. | Decreases bond yields |
| C. | Has no impact |
| D. | Causes bond yields to fluctuate wildly |
| Answer» C. Has no impact | |
| 29. |
What is a major downside of investing in gold during economic growth? |
| A. | It has high liquidity |
| B. | It can underperform compared to other assets |
| C. | It is not safe |
| D. | It decreases inflation |
| Answer» C. It is not safe | |
| 30. |
How does gold protect against currency devaluation? |
| A. | It is tied to exchange rates |
| B. | It maintains purchasing power |
| C. | It decreases during inflation |
| D. | It is influenced by stock prices |
| Answer» C. It decreases during inflation | |
| 31. |
What happens to gold prices when there is a decline in the stock market? |
| A. | Gold prices tend to fall |
| B. | Gold prices tend to rise |
| C. | No change |
| D. | It depends on inflation |
| Answer» C. No change | |
| 32. |
Which factor most influences short-term gold price fluctuations? |
| A. | Supply of gold |
| B. | Stock market trends |
| C. | Inflation expectations |
| D. | Interest rate changes |
| Answer» E. | |
| 33. |
How do gold prices typically behave in a growing economy? |
| A. | Increase |
| B. | Decrease |
| C. | Remain stable |
| D. | Become unpredictable |
| Answer» C. Remain stable | |
| 34. |
Why do gold prices often rise during geopolitical tensions? |
| A. | Increased demand for jewelry |
| B. | Increased demand for safe-haven assets |
| C. | Decreased gold supply |
| D. | Government intervention |
| Answer» C. Decreased gold supply | |
| 35. |
How does an increase in interest rates affect gold prices? |
| A. | Increases gold prices |
| B. | Decreases gold prices |
| C. | No effect |
| D. | It depends on the stock market |
| Answer» C. No effect | |
| 36. |
What is the relationship between gold prices and oil prices? |
| A. | Direct relationship |
| B. | Inverse relationship |
| C. | No relationship |
| D. | Gold determines oil prices |
| Answer» B. Inverse relationship | |
| 37. |
What role does gold play in portfolio diversification? |
| A. | Reduces risk |
| B. | Increases risk |
| C. | No impact on risk |
| D. | Increases portfolio volatility |
| Answer» B. Increases risk | |
| 38. |
When gold prices rise, what is the impact on gold mining companies? |
| A. | Profits increase |
| B. | Profits decrease |
| C. | It causes layoffs |
| D. | No impact |
| Answer» B. Profits decrease | |
| 39. |
How does a gold-backed currency help an economy? |
| A. | It lowers inflation |
| B. | It prevents economic growth |
| C. | It stabilizes the currency |
| D. | It increases the national debt |
| Answer» D. It increases the national debt | |
| 40. |
Which financial market is most affected by changes in gold prices? |
| A. | Stock market |
| B. | Bond market |
| C. | Real estate market |
| D. | Currency market |
| Answer» B. Bond market | |
| 41. |
How do gold prices affect consumer confidence? |
| A. | Increase consumer confidence |
| B. | Decrease consumer confidence |
| C. | Have no effect |
| D. | Make consumers buy more gold |
| Answer» C. Have no effect | |
| 42. |
Why do central banks hold gold reserves? |
| A. | To control currency exchange rates |
| B. | To diversify reserves and provide stability |
| C. | To invest in foreign economies |
| D. | To influence commodity prices |
| Answer» C. To invest in foreign economies | |
| 43. |
What happens to the purchasing power of gold during times of high inflation? |
| A. | It decreases |
| B. | It increases |
| C. | It remains unchanged |
| D. | It becomes unpredictable |
| Answer» C. It remains unchanged | |
| 44. |
In periods of high inflation, investors turn to gold for what reason? |
| A. | To hedge against inflation |
| B. | To boost the economy |
| C. | To improve purchasing power |
| D. | To avoid taxation |
| Answer» B. To boost the economy | |
| 45. |
What is the relationship between the US dollar and gold prices? |
| A. | They tend to move in the same direction |
| B. | They are inversely related |
| C. | There is no correlation |
| D. | Both depend on oil prices |
| Answer» C. There is no correlation | |
| 46. |
How does gold typically perform during periods of deflation? |
| A. | It loses value |
| B. | It gains value |
| C. | It remains stable |
| D. | It becomes irrelevant |
| Answer» C. It remains stable | |
| 47. |
Which global event often leads to a spike in gold prices? |
| A. | Economic stability |
| B. | Political stability |
| C. | Economic recession |
| D. | Gold mining expansions |
| Answer» D. Gold mining expansions | |
| 48. |
When the stock market experiences volatility, what happens to gold prices? |
| A. | They tend to decrease |
| B. | They remain stable |
| C. | They tend to increase |
| D. | They are unaffected |
| Answer» D. They are unaffected | |
| 49. |
Which of the following is a primary reason why investors purchase gold during economic instability? |
| A. | Gold generates high returns |
| B. | Gold is considered a safe-haven asset |
| C. | Gold reduces inflation |
| D. | Gold prices never fluctuate |
| Answer» C. Gold reduces inflation | |
| 50. |
How does a rise in gold prices typically impact inflation? |
| A. | It decreases inflation |
| B. | It increases inflation |
| C. | It has no effect |
| D. | It lowers interest rates |
| Answer» C. It has no effect | |