This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Inflation > Inflation – Quiz 11 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 11 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Robert thinks he has a good retirement plan because he can count on an annual increase that matches the inflation rate. With inflation, is Robert financially better off, worse off, or the same? A) Better off. B) Worse off. C) The same. D) None of above. Show Answer Correct Answer: C) The same. 2. Which of the following groups DO NOT suffer from high inflation? A) Businesses. B) Lenders. C) Borrowers. D) Consumers. Show Answer Correct Answer: C) Borrowers. 3. In the documentary about cocoa beans (ROTTEN:Bitter chocolate), we learned that the farmers don't have any ..... A) Purchasing power. B) Bargaining power. C) None of the above. D) Both. Show Answer Correct Answer: B) Bargaining power. 4. $ 9000 is invested at 6.4% p.a. compounded monthly for 10 years. What will be the value of the "real value" of the interest earned if the average inflation rate of this time period is 2.1%? [1 pt] A) $ 9896.40. B) $ 8039.33. C) $ 6530.74. D) None of above. Show Answer Correct Answer: C) $ 6530.74. 5. If CPI goes from 100 to 300 and your salary goes from £100, 000 to £200, 000, what happened to your purchasing power? A) No change. B) Increases. C) Decreases. D) None of above. Show Answer Correct Answer: C) Decreases. 6. Which is an effect of inflation on consumers? A) Increases real value of investment. B) Increases the real value of debt. C) Leads to possible lower interest rates. D) Decreases real value of savings. Show Answer Correct Answer: D) Decreases real value of savings. 7. To measure the average price level of items that consumers actually buy, the Bureau of Labor and Statistics use the A) National Production Rate. B) Gross Domestic Product. C) Consumer Price Index. D) Unemployment Rate. Show Answer Correct Answer: C) Consumer Price Index. 8. Inflation that is sudden or unexpected tends to hurt which of these groups of people MOST? A) People who have borrowed money. B) People who have a steady job. C) People who have investments in the stock market. D) People who have loaned money to others. Show Answer Correct Answer: D) People who have loaned money to others. 9. Which of the following define as 'rises in the price level caused by excess demand'? A) Cost-push inflation. B) Demand-pull inflation. C) Monetary inflation. D) Hyperinflation. Show Answer Correct Answer: B) Demand-pull inflation. 10. If the prices go from 250 to 120 then The prices A) Fell by 108%. B) Rose 52%. C) Fell by 52%. D) Rose by 108%. Show Answer Correct Answer: C) Fell by 52%. 11. Inflation is most harmful to A) Creditors. B) Wage earners. C) Property owners. D) Debtors. Show Answer Correct Answer: A) Creditors. 12. Headline inflation is more volatile than core inflation because A) It includes food and fuel components. B) It does not include food and fuel components. C) It is the main inflation. D) None of above. Show Answer Correct Answer: A) It includes food and fuel components. 13. If your interest rate for your savings account is 2% per year and the average inflation rate is 3% per year, what happens to the value of your savings account in real terms after 2 years? A) Loses value. B) Gains value. C) Stays the same. D) None of the answers. Show Answer Correct Answer: A) Loses value. 14. Due to the problems of demand side policy, the use of supply side policies have been used to fight both types of inflation more successfully by A) Shifting the SAS to the left. B) Shifting AD to the right. C) Shifting SAS and LAS to the right. D) Shifting LAS to the right. Show Answer Correct Answer: C) Shifting SAS and LAS to the right. 15. CPI is calculated by: A) Comparing the price of houses from one year to another. B) Comparing the price of a standard basket of goods from one year to another. C) Surveying customers. D) Comparing prices between supermarkets. Show Answer Correct Answer: B) Comparing the price of a standard basket of goods from one year to another. 16. To reduce inflation in the long term, appropriate policies include A) Policies to increase aggregate demand. B) Policies to reduce aggregate supply. C) Fiscal policies that boost spending. D) Supply side policies. Show Answer Correct Answer: D) Supply side policies. 17. ..... occurs in the economy when unemployment and inflation are both high. A) Hyperinflation. B) Deflation. C) Disinflation. D) Stagflation. Show Answer Correct Answer: D) Stagflation. 18. Which of the followings is NOT one of the forms of inflation? A) Stagflation. B) Pre-inflation. C) Disinflation. D) Hyperinflation. Show Answer Correct Answer: B) Pre-inflation. 19. What is the UK target rate of inflation? A) 3%. B) 1%. C) 4%. D) 2%. Show Answer Correct Answer: D) 2%. 20. In two speed economies there is a risk of A) Cost push inflation. B) Supply side inflation. C) Demand pull inflation. D) Stagflation. Show Answer Correct Answer: D) Stagflation. 21. In India ..... is considered as the appropriate indicator of Inflation A) CPI. B) WPI. C) GDP. D) None of above. Show Answer Correct Answer: B) WPI. 22. The bank will NOT grant a loan to Mr. Diehl if he ..... A) Has collateral to offer as insurance for the loan. B) Is trustworthy and has exceptionally good credit. C) Has no credit history or a job to pay them back. D) Has a reasonable plan for the money he needs to borrow. Show Answer Correct Answer: C) Has no credit history or a job to pay them back. 23. ..... inflation brings a total collapse of the Economy. A) Creeping. B) Galloping. C) Running. D) Walking. Show Answer Correct Answer: B) Galloping. 24. What may affect the impact of inflation in the economy? A) The cost of borrowing. B) The ONS. C) The bargaining power of workers-trade unions. D) Boris Johnson's suit. Show Answer Correct Answer: C) The bargaining power of workers-trade unions. 25. Governments may pursue inflationary monetary policies A) To promote high employment. B) To accommodate demands of workers for higher wages. C) To finance a persistent budget deficit. D) For all the above reasons. Show Answer Correct Answer: D) For all the above reasons. 26. A person who uses economic goods and services is regarded as a ..... A) Consumer. B) Buyer. C) Conspirer. D) Seller. Show Answer Correct Answer: A) Consumer. 27. To determine whether a country is meeting the goal of economic growth, economists use A) Consumer Price Index. B) Nominal GDP. C) Unemployment Rate. D) Real GDP. Show Answer Correct Answer: D) Real GDP. 28. In section 4, the word entice most nearly means ..... A) Stop. B) Inform. C) Attract. D) Hire. Show Answer Correct Answer: C) Attract. 29. The group of goods and services selected and used to measure inflation is referred to as A) The Big Basket. B) The Market Basket. C) The Economic Basket. D) All of the above. Show Answer Correct Answer: B) The Market Basket. 30. The bank gives you a loan anticipating 5% inflation, and 8% occurs A) Helped. B) Hurt. C) Uncertain. D) None of above. Show Answer Correct Answer: A) Helped. ← PreviousRelated 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