This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Inflation > Inflation – Quiz 9 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 9 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. An attempt to once again increase the money supply and aggregate demand A) Fiscal Measures. B) Deflationary Measures. C) Reflationary Meaures. D) Inflationary Measures. Show Answer Correct Answer: C) Reflationary Meaures. 2. As at October 2021 what was the CPI rate of inflation? A) 3.2%. B) 3.1%. C) 4.2%. D) 4%. Show Answer Correct Answer: C) 4.2%. 3. Argentina has gone through many crises but it is currently undergoing a harsh inflation A) An increase in prices. B) An increase in prices and wages. C) A decrease in wages. D) An increase in wages. Show Answer Correct Answer: A) An increase in prices. 4. What does (X-M) mean in the GDP formula? A) Net exports. B) Net imports. C) Net x-rays. D) None of above. Show Answer Correct Answer: A) Net exports. 5. ..... is a measure of price change in a selected market basket of goods and services such as gasoline, food, clothing, and automobiles A) Consumer Price Index. B) Market Basket. C) Cost-push Inflation. D) Demand-pull Inflation. Show Answer Correct Answer: A) Consumer Price Index. 6. An increase in the supply of money in the economy would most likely cause: A) Everyone to become millionaires. B) Stagflation. C) Inflation. D) Deflation. Show Answer Correct Answer: C) Inflation. 7. To calculate the future cost of a product or service due to inflation, people need to know everything except the A) Type of product or service. B) Inflation rate. C) Current cost of the product or service. D) Future purchase date. Show Answer Correct Answer: A) Type of product or service. 8. In June, the average U.S. household needed to spend how much more a month than it did last year to pay for the same goods and services? A) $ 25. B) $ 500. C) $ 75. D) $ 100. Show Answer Correct Answer: B) $ 500. 9. What happens to the inflation rate when unemployment goes up? A) Inflation rate rises. B) Inflation rate falls and we have deflation. C) Inflation rate stays the same. D) None of above. Show Answer Correct Answer: B) Inflation rate falls and we have deflation. 10. Which of the following interest rates is expressed in terms of current dollars as the percentage of the amount loaned? A) Nominal interest rate. B) Compound interest rate. C) Real interest rate. D) Simple interest rate. Show Answer Correct Answer: A) Nominal interest rate. 11. You should keep track of your spending because if you spend more money than you have in your bank account it is considered a ..... and usually will cause a fee. A) Bankruptcy. B) Withdraw. C) Overdraw. D) Balance. Show Answer Correct Answer: C) Overdraw. 12. To reduce the rate of deflation, an appropriate policy would be A) Restrictions on bank lending. B) Lower interest rates. C) Lower government spending. D) Higher taxes. Show Answer Correct Answer: B) Lower interest rates. 13. The government is implementing VAT on foreign luxury foods items. This measure would best reduce: A) Cost-push Inflation. B) Demand-pull Inflation. C) Monetary Inflation. D) Imported Inflation. Show Answer Correct Answer: D) Imported Inflation. 14. If the Price of the Market Basket in 2008 is $ 40 and the Price of the Market Basket in the base year is $ 20, what is the CPI for 2008? A) 200. B) 60. C) 80. D) 2. Show Answer Correct Answer: A) 200. 15. The Okun's law states that for every 1% increase in the unemployment, there is a: A) 2% increase in GDP. B) 2% decrease in the GNP. C) 2% increase in the GNP. D) 2% decrease in the GDP. Show Answer Correct Answer: D) 2% decrease in the GDP. 16. In ..... inflation prices rise about 2% annually. A) Creeping. B) Running. C) Hyper. D) Walking. Show Answer Correct Answer: A) Creeping. 17. A general rise in the level of prices over time A) Inflation. B) Deflation. C) Hyperinflation. D) Inflation rate. Show Answer Correct Answer: A) Inflation. 18. If nominal out is $ 100 billion dollars while real output is $ 90 then the GDP deflator is A) Approximately 100. B) -110. C) 111.1. D) 110. Show Answer Correct Answer: C) 111.1. 19. If the cost of a market basket is $ 200 in Year 1 and $ 230 in Year 2, the price index for Year 2 with a Year 1 base is: A) 100. B) 200. C) 130. D) 115. Show Answer Correct Answer: D) 115. 20. The purpose of this policy is to A) Reduce the level of AD and to make people spend less. B) Decrease the AD curve and the level of C, I and inflation. C) To make borrowing more expensive so people stop spending. D) To reduce imports so domestic producers have less competition. Show Answer Correct Answer: B) Decrease the AD curve and the level of C, I and inflation. 21. Inflation that occurs when there is more money printed than goods and service being produced. A) Cost push. B) Demand pull. C) Money demand inflation. D) Money supply. Show Answer Correct Answer: D) Money supply. 22. What is the current inflation rate in Hong Kong (August 2020) A) 2.4%. B) 2.0%. C) 1.4%. D) 1.8%. Show Answer Correct Answer: A) 2.4%. 23. Most banks offer an app so you can log in to check how much money has been deposited, spent, and so you know your account ..... A) Balance. B) Withdraw. C) Inflation. D) Budget. Show Answer Correct Answer: A) Balance. 24. What is missing from this essay A) Relevant labelled economic diagrams. B) Literary prose that makes it more exciting to read. C) Longer sentences that have more information in it to impress examiners. D) Dates and quotes from important economic figures and theorists. Show Answer Correct Answer: A) Relevant labelled economic diagrams. 25. Wages rise by 3%, when inflation is 7%. Real wages A) Are rising faster than inflation. B) Have fallen by 4%. C) Have risen by 10%. D) Have fallen by 7%. Show Answer Correct Answer: B) Have fallen by 4%. 26. When inflation is high the ..... of the currency decreases A) Cost value. B) Importance. C) Validity. D) Purchasing power. Show Answer Correct Answer: D) Purchasing power. 27. If CPI last year was 177 and the CPI this year is 186, what is the rate of inflation? A) 8%. B) 6%. C) 5%. D) 7%. Show Answer Correct Answer: C) 5%. 28. Which is NOT an effect of deflation? A) Lower price for goods and services. B) Reduced profit and cash flow for companies. C) Increased spending on goods and services. D) Oversupply of goods and services. Show Answer Correct Answer: C) Increased spending on goods and services. 29. When inflation is high, the loss of buying power especially hurts those A) That have high paying jobs. B) That own homes. C) That are on fixed incomes. D) All of the above. Show Answer Correct Answer: C) That are on fixed incomes. 30. When aggregate demand increases faster than aggregate supply, prices go up. What is this an example of: A) Demand-pull inflation. B) Cost-push inflation. C) Per-worker productivity. D) Deflation. Show Answer Correct Answer: B) Cost-push inflation. ← 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