This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Inflation > Inflation – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 7 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following would cause Demand Pull inflation A) A depreciation in the exchange rate. B) A cut in government spending. C) An increase in the price of oil. D) An Increase in taxation. Show Answer Correct Answer: A) A depreciation in the exchange rate. 2. Which of the following define as 'rises in the price level caused by higher costs of production? A) Cost-push inflation. B) Demand-pull inflation. C) Monetary inflation. D) Hyperinflation. Show Answer Correct Answer: A) Cost-push inflation. 3. Measuring the level of prices in the economy and comparing them to previous months, an inflation measure known as the: A) Economic confidence indicator. B) Real gross domestic product. C) Consumer price index. D) National gross domestic product. Show Answer Correct Answer: C) Consumer price index. 4. In state Z, prices for goods and services have been rising by 60-70% per month for six months. What kind of inflation is observed in state Z? A) Cost inflation. B) Hyperinflation. C) Demand inflation. D) Moderate inflation. Show Answer Correct Answer: B) Hyperinflation. 5. A high rate of inflation is likely to have all of the effects listed below except A) Efficiency losses. B) Uncertainty for business. C) Reduced saving. D) Greater export competitiveness. Show Answer Correct Answer: D) Greater export competitiveness. 6. A situation of rising prices resulting from increases in the cost of production. A) Deflation. B) Cost-push Inflation. C) Demand-pull inflation. D) Consumer Price Index. Show Answer Correct Answer: B) Cost-push Inflation. 7. Extremely rapid inflation with the price level rising by at least fifty per cent each month A) Inflation. B) Deflation. C) Hyperinflation. D) Stagnation. Show Answer Correct Answer: C) Hyperinflation. 8. If the CPI is 105 in 2006 and 115 in 2007, what is the inflation rate during that time? A) 9.5%. B) 8.7%. C) 10%. D) 91.3%. Show Answer Correct Answer: A) 9.5%. 9. Index number that represents general change in wholesale prices of commodities is ..... A) Consumer Price Index. B) Wholesale Price Index. C) Food Basket. D) None of above. Show Answer Correct Answer: B) Wholesale Price Index. 10. The lowest point in the business cycle is A) Trough. B) Recession. C) Peak. D) Boom. Show Answer Correct Answer: A) Trough. 11. The owner of a restaurant spends an extra two hours a week creating and updating coupons. A) Shoe leather costs. B) Menu costs. C) Unit of account cost. D) None of above. Show Answer Correct Answer: B) Menu costs. 12. If nominal output is $ 100 billion dollars while real output is $ 90 billion dollars then the GDP deflator (Price Index) is A) Approximately-110. B) Approximately 100. C) Approximately 110. D) Approximately 111.1. Show Answer Correct Answer: D) Approximately 111.1. 13. Tax that is flat or fixed for individuals A) Income tax. B) Regressive tax. C) Lending tax. D) Proportional tax. Show Answer Correct Answer: D) Proportional tax. 14. In ..... Inflation prices rise very fast at double or triple rate. A) Creeping. B) Walking. C) Hyper. D) Running. Show Answer Correct Answer: C) Hyper. 15. Inflation is ..... A) A measure of price change. B) An increase in the rate of price increase. C) A decrease in general price level. D) An increase in general price levels. Show Answer Correct Answer: D) An increase in general price levels. 16. Inflation can best be defined as ..... A) The printing of too much paper money. B) A general increase in prices. C) An increase in prices of key items purchased by consumers. D) The increase in the value of fiat money. Show Answer Correct Answer: B) A general increase in prices. 17. What is the most likely cause of cost-push inflation in an economy? OCT/NOV 2015 11 A) D an increase in the rate of income tax. B) C an increase in the prices of imports. C) B an increase in the money supply. D) A an increase in the exchange rate. Show Answer Correct Answer: B) C an increase in the prices of imports. 18. Which of the following interest rates is expressed in terms of current prices (this years prices) A) Simple interest rate. B) Real interest rate. C) Nominal interest rate. D) Compound interest rate. Show Answer Correct Answer: C) Nominal interest rate. 19. This spring, inflation in the U.S. reached a ..... A) 15-year low. B) 40-year high. C) 25-year high. D) 10-year low. Show Answer Correct Answer: B) 40-year high. 20. When you borrow $ from the bank, where does that $ come from? A) A credit card company. B) The bank's own business checking account. C) The federal government. D) The account of the bank's customers. Show Answer Correct Answer: D) The account of the bank's customers. 21. When demand for a product increases, this will also cause an increase in price. This is called: A) Demand-pull inflation. B) Cost-push Inflation. C) Deflation. D) Consumer Price Index. Show Answer Correct Answer: A) Demand-pull inflation. 22. Mrs. Askew's family is going on vacation this summer, so they should stick to a ..... to save money. A) Expenses. B) Budget. C) Income. D) Savings. Show Answer Correct Answer: B) Budget. 23. If the inflation rate is more than 50% per month it is A) Walking inflation. B) Hyperinflation. C) Creeping inflation. D) Inflation. Show Answer Correct Answer: B) Hyperinflation. 24. What will be reduced by half if the price level increases by 2 times? A) Demand for goods and services. B) Supply of goods and services. C) Purchasing power of money. D) None of above. Show Answer Correct Answer: C) Purchasing power of money. 25. Inflation is measured by using what is called A) Consumer Purchasing Program (CPP). B) Fixed Income Index (FII). C) Production Possibilities Curve (PPC). D) Consumer Price Index (CPI). Show Answer Correct Answer: D) Consumer Price Index (CPI). 26. Demand-pull inflation may be caused by: A) A reduction in government spending. B) An outward shift in aggregate supply. C) An increase in costs. D) A reduction in interest rates. Show Answer Correct Answer: D) A reduction in interest rates. 27. It is October, and Seth is laid off from work because he is a life guard at the local water park which is now closing until next May. He is experiencing what kind of unemployment? A) Cyclical. B) Seasonal. C) Frictional. D) Structural. Show Answer Correct Answer: B) Seasonal. 28. What type of inflation is caused when banks print more money? A) Increase in the money supply. B) Monetary inflation. C) Bankflation. D) Hyperinflation. Show Answer Correct Answer: B) Monetary inflation. 29. ..... indicates a change in the general price level in the economy. A) WPI. B) CPI. C) Food Basket. D) None of above. Show Answer Correct Answer: A) WPI. 30. Which of the following types of inflation occurs when sales drop and retailers cannot place higher prices on customers? A) Disinflation. B) Pre-inflation. C) Hyperinflation. D) Deflation. Show Answer Correct Answer: A) Disinflation. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesInflation Quiz 1Inflation Quiz 2Inflation Quiz 3Inflation Quiz 4Inflation Quiz 5Inflation Quiz 6Inflation Quiz 8Inflation Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books