Current Affairs MCQ for UPSC Exams – 11 September 2015

Q.1.To calculate the real cost a borrower is paying on its loan, the nominal rate of interest is adjusted with the effect of inflation and thus the interest rate we get is known as –

a. nominal rate
b. borrower rate
c. Real interest rate
d. none of the above

Q.2. If inflation is taking place –

a. Real interest is always lower than the nominal interest
b. Real interest is always higher than the nominal interest
c. Nominal interest is always lower than real interest
d. both are equals

Q.3. Consider the following statements about Phillips curve -

1. It is graphic curve advocates a relationship between inflation and unemployment in an economy
2. The curve suggests that lower the inflation higher unemployment and higher the inflation lower unemployment
3. The curve suggest that higher inflation higher unemployment and lower the inflation lower unemployment

Correct statement is / are –

a. Only 1
b. 1 and 2
c. 1 and 3
d. only 2

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