This quiz works best with JavaScript enabled. Home > Macroeconomics > Inflation > Inflation – Quiz 15 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 15 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. When inflation is high the ..... of money decreases A) Cost value. B) Purchasing power. C) Importance. D) Validity. Show Answer Correct Answer: B) Purchasing power. 2. The first year used, or starting point, for a price index A) Base year. B) Price index. C) Weighting. D) Representative basket. Show Answer Correct Answer: A) Base year. 3. What is the Central Bank's primary goal? A) To keep inflation at a low and steady rate. B) To have full employment. C) Economic growth. D) Economic Freedom. Show Answer Correct Answer: A) To keep inflation at a low and steady rate. 4. May lead to an increase in the value of money A) Inflation. B) Deflation. C) Hyper-Inflation. D) Unemployment. Show Answer Correct Answer: B) Deflation. 5. How is inflation measured? A) By comparing average prices of all goods and services produced. B) Consumer Price Index. C) Producer Price index. D) Government Price Index. Show Answer Correct Answer: B) Consumer Price Index. 6. The country of Galaland produces the following products:2000Bananas-10 at $ 3Apples-10 at $ 2Bread-15 at $ 82001Bananas-10 at $ 5Apples-10 at $ 2Bread-20 at $ 8What is the nominal GDP for 2000? A) $ 230. B) $ 170. C) $ 155. D) $ 126. Show Answer Correct Answer: B) $ 170. 7. ..... refers to a decrease in price level. E.g. from 1000 to 990 A) Hyperinflation. B) Disinflaation. C) Deflation. D) Stagflation. Show Answer Correct Answer: C) Deflation. 8. Level of GDP where all available factor inputs are fully employed A) Cost push inflation. B) Consumer price Index. C) Full capacity output. D) Relative deflation. Show Answer Correct Answer: C) Full capacity output. 9. Which type of inflation is correct? A) Cost-pull inflation. B) Demand-push inflation. C) Cost-push inflation. D) All is correct. Show Answer Correct Answer: C) Cost-push inflation. 10. If there's too much money in circulation, it could lead to inflation A) Cost Push. B) Demand Pull. C) Quantity. D) CPI. Show Answer Correct Answer: C) Quantity. 11. What is demand-led inflation? A) A decrease in price due to a decrease in supply. B) A rise in price level due to an increase in demand. C) A decrease in price due to an increase in supply. D) None of above. Show Answer Correct Answer: B) A rise in price level due to an increase in demand. 12. If one wanted to know whether there had been inflation or not, the BEST measure to observe would be the A) GDP. B) Business cycle. C) CPI. D) National Dept. Show Answer Correct Answer: C) CPI. 13. ..... is a decrease in the rate of inflation. A) Hyperinflation. B) Disinflation. C) Deflation. D) Stagflation. Show Answer Correct Answer: B) Disinflation. 14. Which of the following must happen as a result of inflation? A) A decline in uncertainty. B) A fall in the value of money. C) An improvement in the balance of payments. D) An increase in savings. Show Answer Correct Answer: B) A fall in the value of money. 15. High inflation means: A) The value of money decreases. B) The amount of money decreases. C) The value of money increases. D) The amount of money increases. Show Answer Correct Answer: A) The value of money decreases. 16. In the long run, the demand for money is most dependent upon A) The level of prices. B) The interest rate. C) The availability of banking outlets. D) The availability of credit cards. Show Answer Correct Answer: A) The level of prices. 17. Disinflation is A) A fall in the price level. B) A decreasing rate of inflation. C) An increasing rate of inflation. D) No change to inflation or deflation. Show Answer Correct Answer: B) A decreasing rate of inflation. 18. A car valued at $ 25000 depreciates at a rate of 21% per year for 5 years. By how much did it depreciate? [1 pt] A) $ 7692.64. B) $ 5250. C) $ 17307.36. D) $ 19750. Show Answer Correct Answer: C) $ 17307.36. 19. Why might an increase in a current account surplus cause inflation? OCT/NOV 2014 13 A) A It will decrease aggregate supply. B) B It will decrease the money supply. C) C It will increase aggregate demand. D) D It will increase the exchange rate. Show Answer Correct Answer: C) C It will increase aggregate demand. 20. Demand-pull inflation (or demand inflation) is inflation caused by excessive decreases in aggregate demand. A) TRUE. B) FALSE. C) T T. D) :(. Show Answer Correct Answer: B) FALSE. ← 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