This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Inflation > Inflation – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the old CPI of a product is 200 and the new CPI is 100, what is the percent change? A) 50. B) 25. C) 75. D) 100. Show Answer Correct Answer: D) 100. 2. This guarantees survival, adequate food, clothing, shelter, health care, education, and sanitation. A) Right to Choose. B) Right to Basic Needs. C) Right to Safety. D) Right to Information. Show Answer Correct Answer: B) Right to Basic Needs. 3. Rick owns 70 shares of DuPere stock for which he paid a total of $ 4472. He sold the stock for $ 84 per share and paid a sales commission of $ 50. What was his profit or loss on the investment? A) $ 1358 profit. B) $ 1358 loss. C) $ 1308 profit. D) None of above. Show Answer Correct Answer: A) $ 1358 profit. 4. The economy is in deficit when ..... A) We have more than we need to spend. B) We need to spend more than we have. C) None of the above. D) None of above. Show Answer Correct Answer: B) We need to spend more than we have. 5. What causes demand pull inflation? A) A decrease in price due to a decrease in supply. B) A rise in price level due to an increase in consumption. C) A rise in price due to an increase in the cost of production. D) Rise in price due to a decrease in supply. Show Answer Correct Answer: B) A rise in price level due to an increase in consumption. 6. What is GDP an economic indicator for? A) Economic growth. B) Prices. C) Environmental growth. D) None of above. Show Answer Correct Answer: A) Economic growth. 7. ..... occurs in the economy when unemployment and inflation are both high.Disinflation A) Hyperinflation. B) Deflation. C) Stagflation. D) None of above. Show Answer Correct Answer: C) Stagflation. 8. You can represent cost-push inflation in a diagram through ..... A) An inward shift of AD. B) An inward shift of SRAS. C) An outward shift of SRAS. D) An outward shift of AD. Show Answer Correct Answer: B) An inward shift of SRAS. 9. If the nominal interest rate is 6 per cent and the inflation rate is 3 per cent, the real interest rate is A) 3 percent. B) 6 percent. C) 9 percent. D) 18 percent. Show Answer Correct Answer: A) 3 percent. 10. A Car is purchased for $ 24000, it's value will depreciate by 15% per year. What is the value of this car after 7 years indexed for inflation given that the average inflation rate over this period is 2.1%? [1 pt] A) $ 7693.85. B) $ 6652.17. C) $ 8898.65. D) None of above. Show Answer Correct Answer: C) $ 8898.65. 11. ..... refers to a decrease in price level. A) Deflation. B) Hyperinflation. C) Stagflation. D) Disinflaation. Show Answer Correct Answer: A) Deflation. 12. Inflation is usually higher during what part of the Business Cycle? A) Recession. B) Boom. C) Upswing. D) Trough. Show Answer Correct Answer: B) Boom. 13. The Consumer Price Index (CPI) is best used to determine A) The rate of inflation. B) The Dow Jones Index. C) Currency exchange rates. D) The unemployment rate. Show Answer Correct Answer: A) The rate of inflation. 14. If a change in income appears permanent such as being promoted to a secure and high paying job, ..... A) Then people are likely to consume more. B) Then people are likely to consume less. C) Then people are likely to save more. D) Then people are likely to save less. Show Answer Correct Answer: A) Then people are likely to consume more. 15. An increase in government spending will most likely lead to inflation when A) It is spent on imported capital goods. B) There is a large amount of spare capacity. C) The economy is near full capacity. D) It is spent on education. Show Answer Correct Answer: C) The economy is near full capacity. 16. A very rapid increase in the level of prices over time A) Inflation rate. B) Deflation. C) Hyperinflation. D) Inflation. Show Answer Correct Answer: C) Hyperinflation. 17. Inflation causes the purchasing power of the dollar to ..... A) Increase. B) Stay the same. C) No change. D) Decrease. Show Answer Correct Answer: D) Decrease. 18. If an expense can be eliminated from your budget to save money, it is considered a ..... A) Income. B) Want. C) Savings. D) Need. Show Answer Correct Answer: B) Want. 19. Which of the following terms is also known as total output? A) Price index. B) Price level. C) Aggregate demand. D) Aggregate supply. Show Answer Correct Answer: D) Aggregate supply. 20. ..... inflation affects the poor and middle class people adversely. A) Walking. B) Creeping. C) Hyper. D) Running. Show Answer Correct Answer: D) Running. 21. Menu costs in relation to inflation refer to: A) Costs of revaluing the currency. B) Costs of altering price lists. C) Costs of finding better rates of return. D) Costs of money increasing its value. Show Answer Correct Answer: D) Costs of money increasing its value. 22. Which of the following is an effect of deflation? A) Decrease in unemployment. B) Reduction in production. C) Increase in production. D) Increased spending on goods and services. Show Answer Correct Answer: B) Reduction in production. 23. Bobby's income increased from $ 50, 000 last year to $ 55, 000 this. During the same time the CPI went from 155 to 165. What was his real income change? A) 4.6% increase. B) 5.8% decrease. C) 5.8% increase. D) 4.6% decrease. Show Answer Correct Answer: A) 4.6% increase. 24. Because interest rates increased, businesses cut back on spending for new machinery. How will this affect GDP? A) Investment decreases, GDP decreases. B) Government spending increases, GDP increases. C) Investment increases, GDP increases. D) Government spending decreases, GDP decreases. Show Answer Correct Answer: A) Investment decreases, GDP decreases. 25. What is an effect of inflation on firms? A) Increases value of debt. B) Cost of borrowing decreases. C) Business uncertainty. D) Decreasing labour costs. Show Answer Correct Answer: C) Business uncertainty. 26. In August 2019. the CPI was A) 2.7%. B) 1.7%. C) 1.2%. D) 4.2%. Show Answer Correct Answer: B) 1.7%. 27. Rex owns 170 shares of Crown Inc., for which he paid 28.875 per share. If the company pays dividends of $ 1.45 per share, what is the annual yield to the nearest hundredth of a percent? A) 5%. B) 5.02%. C) 6.02%. D) None of above. Show Answer Correct Answer: B) 5.02%. 28. According to the article, to slow inflation, the Federal Reserve sometimes ..... A) Increases interest rates. B) Stops lending money. C) Buys other banks. D) Decreases interest rates. Show Answer Correct Answer: A) Increases interest rates. 29. What is the fisher effect? A) The nominal interest rate changes as the inflation rate changes. B) Real interest rates change as inflation rates change. C) Changes in the amount of money. D) Changes in monetary value. Show Answer Correct Answer: A) The nominal interest rate changes as the inflation rate changes. 30. Which is the central idea of section 5? A) Inflation might slow down next year. B) Inflation will increase dramatically next year. C) Supply chains will be disrupted for several years. D) Experts have little ability to predict inflation patterns. Show Answer Correct Answer: A) Inflation might slow down next year. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesInflation Quiz 1Inflation Quiz 2Inflation Quiz 3Inflation Quiz 4Inflation Quiz 6Inflation Quiz 7Inflation Quiz 8Inflation Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books