Inflation Quiz 10 (20 MCQs)

Quiz Instructions

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1. An increase in aggregate demand may not always lead to demand-pull inflation in

Correct Answer: B) The Keynesian model.

2. Consumers may defer consumption when

Correct Answer: C) The face deflation.

3. Which of the following would cause Demand Pull inflation

Correct Answer: B) A depreciation in the exchange rate.

4. Which of the following define as 'rises in the price level caused by higher costs of production?

Correct Answer: A) Cost-push inflation.

5. Measuring the level of prices in the economy and comparing them to previous months, an inflation measure known as the:

Correct Answer: B) Consumer price index.

6. 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?

Correct Answer: B) Hyperinflation.

7. A high rate of inflation is likely to have all of the effects listed below except

Correct Answer: D) Greater export competitiveness.

8. A situation of rising prices resulting from increases in the cost of production.

Correct Answer: B) Cost-push Inflation.

9. Extremely rapid inflation with the price level rising by at least fifty per cent each month

Correct Answer: A) Hyperinflation.

10. If the CPI is 105 in 2006 and 115 in 2007, what is the inflation rate during that time?

Correct Answer: B) 9.5%.

11. Index number that represents general change in wholesale prices of commodities is .....

Correct Answer: B) Wholesale Price Index.

12. The lowest point in the business cycle is

Correct Answer: C) Trough.

13. Question 5

Correct Answer: B) 1.4.

14. The owner of a restaurant spends an extra two hours a week creating and updating coupons.

Correct Answer: B) Menu costs.

15. If nominal output is $ 100 billion dollars while real output is $ 90 billion dollars then the GDP deflator (Price Index) is

Correct Answer: C) Approximately 111.1.

16. Tax that is flat or fixed for individuals

Correct Answer: B) Proportional tax.

17. In ..... Inflation prices rise very fast at double or triple rate.

Correct Answer: C) Hyper.

18. Inflation can best be defined as .....

Correct Answer: A) A general increase in prices.

19. What is the most likely cause of cost-push inflation in an economy? OCT/NOV 2015 11

Correct Answer: C) C an increase in the prices of imports.

20. Which of the following interest rates is expressed in terms of current prices (this years prices)

Correct Answer: B) Nominal interest rate.