Inflation Quiz 1 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. ..... type of Inflation is a warning signal to the Government to control it.

Correct Answer: C) Trotting.

2. The redistribution effects of a high rate of inflation may involve losses for ..... and gains for .....

Correct Answer: A) Lenders/borrows.

3. Unemployment is most likely to occur during an economic expansion

Correct Answer: B) False.

4. The quantity of goods and services a person can buy with a given amount of money.

Correct Answer: C) Buying Power.

5. Costs when they make more trips to the bank in order to hold significant amounts of money.

Correct Answer: B) Shoe leather costs.

6. After writing a check for $ 172, your account is overdrawn by $ 31. How much money did you have in the account before you wrote the check?

Correct Answer: B) $ 141.

7. The ..... for a given year is 100 times the ratio of nominal GDP to real GDP that year.

Correct Answer: A) GDP Deflator.

8. The condition of a continually rising price level is defined as

Correct Answer: D) Inflation.

9. Which of the following is a cause of Cost-Push Inflation?

Correct Answer: A) Increases in the costs to produce.

10. The ..... considers the weighted averages of a group of consumer goods and services.

Correct Answer: A) Consumer price index.

11. With which of the given ways to finance government spendings seigniorage is connected:

Correct Answer: A) Printing money.

12. Which is an effect of inflation on the government?

Correct Answer: C) Real GDP is lower.

13. The government through the Central Bank is going to repurchase all bonds issued to the public. This measure would best:

Correct Answer: C) Increase Monetary Inflation.

14. The GDP DeflatorI. is used to calculate inflation rates.II. is an alternative to the CPI.III. is more accurate than the CPI.

Correct Answer: B) I and II are true.

15. A general decline in the level of prices is called

Correct Answer: B) Deflation.

16. ..... consist of Food Items of daily individual consumption.

Correct Answer: D) Food Basket.

17. Inflation is the state in which .....

Correct Answer: A) The value of money decreases.

18. What would be likely to increase inflation in an economy? MAY/JUNE 2007 01

Correct Answer: D) D an increase in taxes on imports.

19. It assumes that people save in order to distribute their consumption over their lifetime.

Correct Answer: D) Life cycle hypothesis.

20. Why might students be affected adversely by inflation?

Correct Answer: B) Students usually work for low wages.