This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Inflation > Inflation – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 10 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Food, clothes and shelter are all considered to be ..... A) Urges. B) Wants. C) Needs. D) None of above. Show Answer Correct Answer: C) Needs. 2. Causes of Inflation are ..... A) Demand-pull. B) Supply-shock. C) Wage push. D) All is correct. Show Answer Correct Answer: D) All is correct. 3. What is not a possible cause of cost-push inflation? MAY/JUNE 2014 12 A) D an increase in trade union power. B) A an increase in firms' profit margins. C) C an increase in the supply of money. D) B an increase in raw material prices. Show Answer Correct Answer: C) C an increase in the supply of money. 4. What causes Cost-Push inflation? A) An increase in demand for goods and services. B) An increase in supply. C) A rise in production costs passed on to consumers. D) A fall in the price of imports. Show Answer Correct Answer: C) A rise in production costs passed on to consumers. 5. The CPI is a weighted index, this means A) Some price changes are given more importance than others in the index. B) All price changes are equally important. C) Price changes in energy would have less relevance than price changes of window cleaning. D) None of above. Show Answer Correct Answer: A) Some price changes are given more importance than others in the index. 6. Hyperinflation is typically caused by A) Bad harvests that lead to widespread shortages. B) Trade surpluses that are caused by strong protections policies. C) High tax rates that discourage work effort. D) Continuous expansion of the money supply to finance government budget deficits. Show Answer Correct Answer: D) Continuous expansion of the money supply to finance government budget deficits. 7. If Shermania's GDP in 2014 was $ 4, 000 and it was $ 5, 000 in 2015, what is the % change in GDP? A) 200%. B) 100%. C) 25%. D) 10%. Show Answer Correct Answer: C) 25%. 8. Which of the following is a possible cause of demand-pull inflation? A) A rise in imports. B) A rise in wages. C) An increase in the price of oil. D) An increase in government expenditure. Show Answer Correct Answer: D) An increase in government expenditure. 9. When inflation is high the ..... of money decreases A) Cost value. B) Importance. C) Validity. D) Purchasing power. Show Answer Correct Answer: D) Purchasing power. 10. The first year used, or starting point, for a price index A) Base year. B) Price index. C) Representative basket. D) Weighting. Show Answer Correct Answer: A) Base year. 11. What is the Central Bank's primary goal? A) To keep inflation at a low and steady rate. B) To have full employment. C) Economic growth. D) Economic Freedom. Show Answer Correct Answer: A) To keep inflation at a low and steady rate. 12. May lead to an increase in the value of money A) Inflation. B) Unemployment. C) Hyper-Inflation. D) Deflation. Show Answer Correct Answer: D) Deflation. 13. How is inflation measured? A) By comparing average prices of all goods and services produced. B) Consumer Price Index. C) Producer Price index. D) Government Price Index. Show Answer Correct Answer: B) Consumer Price Index. 14. The country of Galaland produces the following products:2000Bananas-10 at $ 3Apples-10 at $ 2Bread-15 at $ 82001Bananas-10 at $ 5Apples-10 at $ 2Bread-20 at $ 8What is the nominal GDP for 2000? A) $ 126. B) $ 230. C) $ 170. D) $ 155. Show Answer Correct Answer: C) $ 170. 15. ..... refers to a decrease in price level. E.g. from 1000 to 990 A) Stagflation. B) Hyperinflation. C) Deflation. D) Disinflaation. Show Answer Correct Answer: C) Deflation. 16. Level of GDP where all available factor inputs are fully employed A) Cost push inflation. B) Relative deflation. C) Consumer price Index. D) Full capacity output. Show Answer Correct Answer: D) Full capacity output. 17. Which type of inflation is correct? A) Cost-pull inflation. B) Demand-push inflation. C) Cost-push inflation. D) All is correct. Show Answer Correct Answer: C) Cost-push inflation. 18. If there's too much money in circulation, it could lead to inflation A) Cost Push. B) Demand Pull. C) Quantity. D) CPI. Show Answer Correct Answer: C) Quantity. 19. What is demand-led inflation? A) A decrease in price due to a decrease in supply. B) A rise in price level due to an increase in demand. C) A decrease in price due to an increase in supply. D) None of above. Show Answer Correct Answer: B) A rise in price level due to an increase in demand. 20. If one wanted to know whether there had been inflation or not, the BEST measure to observe would be the A) GDP. B) CPI. C) Business cycle. D) National Dept. Show Answer Correct Answer: B) CPI. 21. ..... is a decrease in the rate of inflation. A) Hyperinflation. B) Disinflation. C) Deflation. D) Stagflation. Show Answer Correct Answer: B) Disinflation. 22. Which of the following must happen as a result of inflation? A) A decline in uncertainty. B) A fall in the value of money. C) An improvement in the balance of payments. D) An increase in savings. Show Answer Correct Answer: B) A fall in the value of money. 23. High inflation means: A) The value of money increases. B) The amount of money increases. C) The amount of money decreases. D) The value of money decreases. Show Answer Correct Answer: D) The value of money decreases. 24. In the long run, the demand for money is most dependent upon A) The availability of credit cards. B) The interest rate. C) The availability of banking outlets. D) The level of prices. Show Answer Correct Answer: D) The level of prices. 25. A car valued at $ 25000 depreciates at a rate of 21% per year for 5 years. By how much did it depreciate? [1 pt] A) $ 19750. B) $ 7692.64. C) $ 5250. D) $ 17307.36. Show Answer Correct Answer: D) $ 17307.36. 26. Why might an increase in a current account surplus cause inflation? OCT/NOV 2014 13 A) A It will decrease aggregate supply. B) B It will decrease the money supply. C) C It will increase aggregate demand. D) D It will increase the exchange rate. Show Answer Correct Answer: C) C It will increase aggregate demand. 27. Demand-pull inflation (or demand inflation) is inflation caused by excessive decreases in aggregate demand. A) FALSE. B) TRUE. C) :(. D) T T. Show Answer Correct Answer: A) FALSE. 28. A spending plan or guide. A) Guarantee. B) Budget. C) Expense. D) Warranty. Show Answer Correct Answer: B) Budget. 29. In the article about Venezuela, what did the government do to try and better living standards in the country? A) Print more money!. B) Lower interest rates. C) Increase interest rates. D) Increase the National Minimum Wage. Show Answer Correct Answer: D) Increase the National Minimum Wage. 30. Which of the following types of inflation involves the government using financial stimuli to increase the country's output? A) Hyperinflation. B) Disinflation. C) Deflation. D) Reflation. Show Answer Correct Answer: D) Reflation. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesInflation Quiz 1Inflation Quiz 2Inflation Quiz 3Inflation Quiz 4Inflation Quiz 5Inflation Quiz 6Inflation Quiz 7Inflation Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books