This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Inflation > Inflation – Quiz 8 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 8 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Economists consider inflation to be negative because A) Inflation encourages consumers to buy goods made in Australia rather than imports. B) It increases the rate of savings. C) It means a recession is around the corner. D) It leads to uncertainty and makes investment more ri. Show Answer Correct Answer: D) It leads to uncertainty and makes investment more ri. 2. What is the final value of a $ 8250 investment after 8 years compounded quarterly at 4.2% p.a.? [0.5 pts] A) $ 30776.62. B) $ 11524.34. C) $ 11465.57. D) None of above. Show Answer Correct Answer: B) $ 11524.34. 3. An attorney spends two hours each week researching if her hourly rate is comparable to other lawyers. A) Shoe leather costs. B) Menu costs. C) Unit of account cost. D) None of above. Show Answer Correct Answer: C) Unit of account cost. 4. Deflation may be a more serious problem than inflation because it may lead to A) A deflationary spiral. B) A serious demand-deficient unemployment. C) A banking crisis. D) All of the above. Show Answer Correct Answer: D) All of the above. 5. Company profits are distributed to shareholders in the form of A) Net asset values. B) Losses. C) Par values. D) Dividends. Show Answer Correct Answer: D) Dividends. 6. If inflation is 10% and nominal GDP goes up by 20%, real GDP ..... A) Goes up approximately 30%. B) Goes up approximately 10%. C) Goes up approximately 2%. D) Goes up approximately 20%. Show Answer Correct Answer: B) Goes up approximately 10%. 7. This type of inflation is related with stagflation A) Creep inflation. B) Hyper inflation. C) Open inflation. D) Galloping inflation. Show Answer Correct Answer: D) Galloping inflation. 8. Argentina is currently on its ..... quarter A) First. B) Fourth. C) Third. D) Second. Show Answer Correct Answer: D) Second. 9. The total dollar value of goods and services produced by a nation, including goods and services produced abroad by US citizens and companies. A) Producer Price 'index (PPI). B) Gross National Product (GNP). C) Consumer Price Index (CPI). D) Gross Domestic Product (GDP). Show Answer Correct Answer: B) Gross National Product (GNP). 10. What is the ideal rate of inflation? A) 0-1%. B) 1-2%. C) 2-3%. D) 3-4%. Show Answer Correct Answer: C) 2-3%. 11. Hyperinflation is a situation of excessively low inflation, whereby the general price level increases at an extremely slow rate. A) I DONT KNOW. B) FALSE. C) TRUE. D) HMM . Show Answer Correct Answer: B) FALSE. 12. The ..... considers the weighted basket of goods and services. A) Consumer price index. B) Aggregate supply. C) Producer price index. D) Aggregate demand. Show Answer Correct Answer: A) Consumer price index. 13. Wages (and other costs) rise, resulting in higher prices etc. A) Quantity. B) Cost Push. C) Demand Pull. D) CPI. Show Answer Correct Answer: B) Cost Push. 14. A consumer's right to be protected against hazardous goods is known as ..... A) Responsibility. B) Redress. C) Service. D) Safety. Show Answer Correct Answer: D) Safety. 15. According to the wage-price spiral, if a company gives a worker a raise in pay, what must they also do? A) Raise the price of their products. B) Go out of business. C) Lower the price of their products. D) None of above. Show Answer Correct Answer: A) Raise the price of their products. 16. Norminal GDP is $ 100 million and the money supply is $ 25 millionAccording to the quantity theory of money, What is the velocity of money? A) $ 123 million. B) 0.25. C) 75. D) 4. Show Answer Correct Answer: D) 4. 17. The combination of a successful wage push by workers and the government's commitment to high employment leads to A) Demand-pull inflation. B) Supply-side inflation. C) Supply-shock inflation. D) Cost-push inflation. Show Answer Correct Answer: D) Cost-push inflation. 18. What is considered a normal yearly inflation rate in the U.S.? A) 5 percent. B) 10 percent. C) 2 percent. D) 12 percent. Show Answer Correct Answer: C) 2 percent. 19. If real interest rates are rising at 5% and the nominal interest rate is rising at 9%, what was the inflation rate? A) 4%. B) -4%. C) 14%. D) -14%. Show Answer Correct Answer: A) 4%. 20. What is defined as a sustained increase in the general (average) price level. A) Inflation. B) Disinflation. C) Deflation. D) Hyperinflation. Show Answer Correct Answer: A) Inflation. 21. Which of the following is not a cause of inflation? A) Demand-led. B) Cost-push (supply). C) Government driven. D) None of above. Show Answer Correct Answer: C) Government driven. 22. A certificate of deposit A) Is the same thing as a savings account. B) Can be withdrawn at any time. C) Pays higher interest than a savings account but has a penalty for early withdrawal. D) None of above. Show Answer Correct Answer: C) Pays higher interest than a savings account but has a penalty for early withdrawal. 23. Inflation is generally A) Not good for the economy. B) Does not affect me. C) Good for the economy. D) Makes no difference to the economy. Show Answer Correct Answer: A) Not good for the economy. 24. Who benefits the MOST during periods of unexpected inflation? A) Renters who live in a rent controlled apartment. B) Banks who are collecting on loans with adjustable interest rates. C) Banks who are collecting on loans with fixed interest rates. D) Elderly on fixed incomes. Show Answer Correct Answer: B) Banks who are collecting on loans with adjustable interest rates. 25. There are two tools of Fiscal Policy, which are A) Cash rate and Reserve Requirements. B) Open Market Operations and Tax. C) Government spending and Reserve Requirements. D) Tax and Government Spending. Show Answer Correct Answer: D) Tax and Government Spending. 26. Due to a tax cut, consumers decide to buy more new cars. How will this affect GDP? A) Investment spending increases, GDP decreases. B) Consumer spending increases, GDP decreases. C) Consumer spending increases, GDP increases. D) Investment spending increases, GDP increases. Show Answer Correct Answer: C) Consumer spending increases, GDP increases. 27. Unemployment caused when a man resigns from his job to start looking for a higher paying job. A) Structural. B) Frictional. C) Cyclical. D) Seasonal. Show Answer Correct Answer: B) Frictional. 28. Which of these are likely to be winners in periods of high, unanticipated inflation? A) Savers. B) Lenders. C) People on fixed incomes. D) Borrowers at fixed interest rates. Show Answer Correct Answer: D) Borrowers at fixed interest rates. 29. The total mark up price of cupcakes that Jill earned is Php500. How much is the selling price of each cupcake if the quantity or the total number of products is 50? A) 10. B) 15. C) 20. D) 5. Show Answer Correct Answer: A) 10. 30. ..... is when prices rise and are pushed up because the cost of resources and labor increases A) Deflation. B) Demand-pull Inflation. C) Cost-push Inflation. D) Inflation. Show Answer Correct Answer: C) Cost-push Inflation. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesInflation Quiz 1Inflation Quiz 2Inflation Quiz 3Inflation Quiz 4Inflation Quiz 5Inflation Quiz 6Inflation Quiz 7Inflation Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books