This quiz works best with JavaScript enabled. Home > Macroeconomics > Inflation > Inflation – Quiz 14 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 14 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. 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) 115. D) 130. Show Answer Correct Answer: C) 115. 2. 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. 3. 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. 4. What is the current inflation rate in Hong Kong (August 2020) A) 1.4%. B) 1.8%. C) 2.0%. D) 2.4%. Show Answer Correct Answer: D) 2.4%. 5. 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) Withdraw. B) Inflation. C) Budget. D) Balance. Show Answer Correct Answer: D) Balance. 6. 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. 7. 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%. 8. When inflation is high the ..... of the currency decreases A) Cost value. B) Purchasing power. C) Importance. D) Validity. Show Answer Correct Answer: B) Purchasing power. 9. If CPI last year was 177 and the CPI this year is 186, what is the rate of inflation? A) 8%. B) 7%. C) 6%. D) 5%. Show Answer Correct Answer: D) 5%. 10. 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. 11. 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. 12. 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. 13. Food, clothes and shelter are all considered to be ..... A) Urges. B) Wants. C) Needs. D) None of above. Show Answer Correct Answer: C) Needs. 14. Causes of Inflation are ..... A) Demand-pull. B) Supply-shock. C) Wage push. D) All is correct. Show Answer Correct Answer: D) All is correct. 15. What is not a possible cause of cost-push inflation? MAY/JUNE 2014 12 A) A an increase in firms' profit margins. B) B an increase in raw material prices. C) C an increase in the supply of money. D) D an increase in trade union power. Show Answer Correct Answer: C) C an increase in the supply of money. 16. What causes Cost-Push inflation? A) An increase in demand for goods and services. B) An increase in supply. C) A rise in production costs passed on to consumers. D) A fall in the price of imports. Show Answer Correct Answer: C) A rise in production costs passed on to consumers. 17. The CPI is a weighted index, this means A) Some price changes are given more importance than others in the index. B) All price changes are equally important. C) Price changes in energy would have less relevance than price changes of window cleaning. D) None of above. Show Answer Correct Answer: A) Some price changes are given more importance than others in the index. 18. Hyperinflation is typically caused by A) High tax rates that discourage work effort. B) Continuous expansion of the money supply to finance government budget deficits. C) Trade surpluses that are caused by strong protections policies. D) Bad harvests that lead to widespread shortages. Show Answer Correct Answer: B) Continuous expansion of the money supply to finance government budget deficits. 19. If Shermania's GDP in 2014 was $ 4, 000 and it was $ 5, 000 in 2015, what is the % change in GDP? A) 100%. B) 10%. C) 200%. D) 25%. Show Answer Correct Answer: D) 25%. 20. Which of the following is a possible cause of demand-pull inflation? A) An increase in government expenditure. B) An increase in the price of oil. C) A rise in wages. D) A rise in imports. Show Answer Correct Answer: A) An increase in government expenditure. ← 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