This quiz works best with JavaScript enabled. Home > Macroeconomics > Inflation > Inflation – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation Quiz 2 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. As price level in the nation's economy decreases, A) Purchasing power increases. B) Purchasing power decreases. C) Supply increases. D) Foreign demand on goods decreases. Show Answer Correct Answer: B) Purchasing power decreases. 2. The effects of inflation on the price competitiveness of a country's products may be offset by: A) An appreciation of the currency. B) A revaluation of the currency. C) A depreciation of the currency. D) Lower inflation abroad. Show Answer Correct Answer: C) A depreciation of the currency. 3. Which of the following is NOT a component of GDP? A) Consumer Spending. B) Investment. C) Savings. D) Net Exports. Show Answer Correct Answer: C) Savings. 4. The rate of inflation is most commonly measured by use of A) A price deflator. B) The GDP deflator. C) The consumer price index. D) All of the above. Show Answer Correct Answer: C) The consumer price index. 5. ..... inflation is regarded as safe and essential for Economic Growth. A) Running. B) Creeping. C) Hyper. D) Walking. Show Answer Correct Answer: B) Creeping. 6. How do we measure inflation? A) Using demand and supply. B) CPI. C) Gini coeficient. D) GDP. Show Answer Correct Answer: B) CPI. 7. Which is a general cost of inflation? A) Certainty in the market. B) Potential fall in real income. C) Increase in competitiveness. D) Increase in real savings. Show Answer Correct Answer: B) Potential fall in real income. 8. When I need to ..... money from my checking account, I can use my debit card at an ATM. A) Overdraw. B) Inflation. C) Balance. D) Withdraw. Show Answer Correct Answer: D) Withdraw. 9. An increase in aggregate demand is likely to lead to A) Demand-push inflation. B) Cost-push inflation. C) Demand-pull inflation. D) Cost-pull inflation. Show Answer Correct Answer: C) Demand-pull inflation. 10. If nominal out is $ 100 billion dollars while real output is $ 90 then the GDP deflator (price index) is A) Approximately 100. B) 110. C) 111.1. D) -110. Show Answer Correct Answer: C) 111.1. 11. Ben's savings from his part-time job are in a savings account paying a fixed rate of interest. A) Harmed from unanticipated inflation. B) Benefits from unanticipated inflation. C) Uncertain. D) None of above. Show Answer Correct Answer: A) Harmed from unanticipated inflation. 12. Buying an item that was not planned for or buying without thinking is known as ..... A) Impulse buying. B) Spending spree. C) Consumer choices. D) Getting value for money. Show Answer Correct Answer: A) Impulse buying. 13. If CPI goes from 100 to 300, what happened to your purchasing power? A) Increase. B) Decrease. C) No change. D) None of above. Show Answer Correct Answer: B) Decrease. 14. According to the Demand-Pull Theory, inflation is caused by ..... A) Producers raising prices to make up for increased costs. B) People demanding too much of a good or service. C) Too much money being in circulation. D) The market basket being full. Show Answer Correct Answer: B) People demanding too much of a good or service. 15. Which of the following measure of inflation includes mortage costs? A) CPI. B) RPI. C) CPIH. D) RPIH. Show Answer Correct Answer: B) RPI. 16. A decrease in general price level is called ..... A) Hyperinflation. B) Low inflation. C) Deflation. D) Disinflation. Show Answer Correct Answer: C) Deflation. 17. A ..... is a hypothetical set of consumer purchases of goods and services. A) Market Basket. B) Aggregate Price Level. C) Consumer Price Index (CPI). D) Producer Price Index (PPI). Show Answer Correct Answer: A) Market Basket. 18. The primary way an investor earns a return from bonds is ..... A) Dividends. B) Stock dividends. C) Interest. D) All of these. Show Answer Correct Answer: C) Interest. 19. Things that you must have in order to survive. A) Wants. B) Needs. C) Inspiration. D) Goals. Show Answer Correct Answer: B) Needs. 20. This is the annual percentage return realized on an investment. A) Nominal rate. B) Investment rate. C) Interest rate. D) Real rate. Show Answer Correct Answer: D) Real rate. ← PreviousNext →Related QuizzesMacroeconomics QuizzesInflation Quiz 1Inflation Quiz 3Inflation Quiz 4Inflation Quiz 5Inflation Quiz 6Inflation Quiz 7Inflation Quiz 8Inflation Quiz 9Inflation Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books