#1 Lowering of value of currency relative to a foreign reference currency is called _________.
Devaluation. In modern monetary policy, a devaluation is an official lowering of thevalue of a country’s currency within a fixed exchange-rate system, in which a monetary authority formally sets a lower exchange rate of the national currency in relation to a foreign reference currency or currency basket.
#2 If cash reserve ratio decreases, credit creation will _______.
If the Cash Reserve Ratio (CRR) is increased by the RBI, its impact on the expansion of credit creation will be to decrease it.
#3 The goods which people consume more, when their price rises are called _______.
A Giffen good is a good for which demand increases as the price increases, and falls when the price decreases.
#4 Stagflation is defined as –
A condition of slow economic growth and relatively high unemployment accompanied by rising prices, or inflation and a decline in Gross Domestic Product (GDP).
#5 Movement along the supply curve is known as ______ .
A movement along the supply curve will occur when the price of the good changes and the quantity supplied changes in accordance to the original supply relationship. In other words, a movement alongs the supply curve is known as Expansion and Contraction of supply.