This quiz works best with JavaScript enabled. Home > Macroeconomics > Inflation > Inflation – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 12 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The total dollar value of goods and services produced by a nation, including goods and services produced abroad by US citizens and companies. A) Gross Domestic Product (GDP). B) Gross National Product (GNP). C) Consumer Price Index (CPI). D) Producer Price 'index (PPI). Show Answer Correct Answer: B) Gross National Product (GNP). 2. 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%. 3. Hyperinflation is a situation of excessively low inflation, whereby the general price level increases at an extremely slow rate. A) TRUE. B) FALSE. C) I DONT KNOW. D) HMM . Show Answer Correct Answer: B) FALSE. 4. 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. 5. 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. 6. A consumer's right to be protected against hazardous goods is known as ..... A) Redress. B) Safety. C) Responsibility. D) Service. Show Answer Correct Answer: B) Safety. 7. 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. 8. 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) 75. B) $ 123 million. C) 0.25. D) 4. Show Answer Correct Answer: D) 4. 9. 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. 10. What is considered a normal yearly inflation rate in the U.S.? A) 2 percent. B) 5 percent. C) 10 percent. D) 12 percent. Show Answer Correct Answer: A) 2 percent. 11. 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%. 12. What is defined as a sustained increase in the general (average) price level. A) Inflation. B) Deflation. C) Hyperinflation. D) Disinflation. Show Answer Correct Answer: A) Inflation. 13. 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. 14. 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. 15. Inflation is generally A) Good for the economy. B) Not good for the economy. C) Makes no difference to the economy. D) Does not affect me. Show Answer Correct Answer: B) Not good for the economy. 16. Who benefits the MOST during periods of unexpected inflation? A) Elderly on fixed incomes. B) Renters who live in a rent controlled apartment. C) Banks who are collecting on loans with fixed interest rates. D) Banks who are collecting on loans with adjustable interest rates. Show Answer Correct Answer: D) Banks who are collecting on loans with adjustable interest rates. 17. 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. 18. Due to a tax cut, consumers decide to buy more new cars. How will this affect GDP? A) Consumer spending increases, GDP increases. B) Consumer spending increases, GDP decreases. C) Investment spending increases, GDP increases. D) Investment spending increases, GDP decreases. Show Answer Correct Answer: A) Consumer spending increases, GDP increases. 19. Unemployment caused when a man resigns from his job to start looking for a higher paying job. A) Structural. B) Seasonal. C) Frictional. D) Cyclical. Show Answer Correct Answer: C) Frictional. 20. Which of these are likely to be winners in periods of high, unanticipated inflation? A) Savers. B) Lenders. C) Borrowers at fixed interest rates. D) People on fixed incomes. Show Answer Correct Answer: C) Borrowers at fixed interest rates. ← PreviousNext →Related QuizzesMacroeconomics QuizzesInflation Quiz 1Inflation Quiz 2Inflation Quiz 3Inflation Quiz 4Inflation Quiz 5Inflation Quiz 6Inflation Quiz 7Inflation Quiz 8Inflation Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books