This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Inflation And Deflation > Inflation And Deflation – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation And Deflation Quiz 10 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. When might rapid inflation together with low interest rates be a source of concern for a consumer? A) When a consumer lives on a pension linked to the consumer price index. B) When a consumer needs to use savings for regular expenditure. C) When a consumer pays a fixed rent for their accommodation. D) When a consumer wishes to buy a good on credit. Show Answer Correct Answer: B) When a consumer needs to use savings for regular expenditure. 2. Deflation is not necessarily harmful to an economy. It depends on its cause. A) True. B) False. Show Answer Correct Answer: A) True. 3. Which of the following types of inflation occurs when sales drop and retailers cannot place higher prices on customers? A) Deflation. B) Disinflation. C) Hyperinflation. D) Pre-inflation. Show Answer Correct Answer: B) Disinflation. 4. What is the definition of disinflation? A) A period when the general price level of goods and services falls. B) A sustained increase in the general price level of goods and services in an economy over a period of time. C) A slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time. D) An inflationary period accompanied by rising unemployment and lack of growth in consumer demand and business activity. Show Answer Correct Answer: C) A slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time. 5. The relative purchasing power of a 1913 US dollar was about ..... in 2011? A) .50 cents. B) .95 cents. C) .05 cents. D) None of above. Show Answer Correct Answer: C) .05 cents. 6. ..... inflation brings a total collapse of the Economy. A) Creeping. B) Galloping. C) Running. D) Walking. Show Answer Correct Answer: B) Galloping. 7. What is the impact of deflation on the real value of debt? A) Increases the real value of debt. B) Decreases the real value of debt. C) No impact on the real value of debt. D) Stabilizes the real value of debt. Show Answer Correct Answer: A) Increases the real value of debt. 8. If the Price of the Market Basket in 2008 is $ 40 and the Price of the Market Basket in the base year is $ 20, what is the CPI for 2008? A) 2. B) 60. C) 80. D) 200. Show Answer Correct Answer: D) 200. 9. How do we measure inflation? A) Using demand and supply. B) CPI. C) Gini coefficient. D) GDP. Show Answer Correct Answer: B) CPI. 10. One of the biggest costs of inflation is A) The deadweight loss spent by producers changing prices more often. B) The negative economic effects of reducing inflation. C) The cost of re-writing paychecks to adjust wages. D) The loss of revenue from decreasing prices during deflation. Show Answer Correct Answer: B) The negative economic effects of reducing inflation. 11. Which one of these correctly describes how lenders and borrowers are affected by inflation? A) Lenders hurt, borrowers helped. B) Lenders hurt, borrowers hurt. C) Lenders helped, borrowers hurt. D) Lenders helped, borrowers helped. Show Answer Correct Answer: A) Lenders hurt, borrowers helped. 12. What is the minimum wage in Florida A) $ 10.00 per hour. B) $ 11.00 per hour. C) $ 15.00 per hour. D) None of above. Show Answer Correct Answer: A) $ 10.00 per hour. 13. A little inflation is a good thing if you ..... A) Loan money. B) Owe money. C) Save money. D) Spend money. Show Answer Correct Answer: B) Owe money. 14. How does deflation impact the economy? A) Deflation impacts the economy by reducing consumer spending, lowering business profits, increasing debt burden, and potentially leading to a deflationary spiral. B) Deflation has no impact on the economy. C) Deflation leads to higher consumer spending and business profits. D) Deflation reduces the debt burden on individuals and businesses. Show Answer Correct Answer: A) Deflation impacts the economy by reducing consumer spending, lowering business profits, increasing debt burden, and potentially leading to a deflationary spiral. 15. Inflationary gap said to exist when ..... ? A) Real GDP > Potential GDP. B) Real GDP < Potential GDP. C) Real GDP = Potential GDP. D) Unemployment rate > natural rate of unemployment. Show Answer Correct Answer: A) Real GDP > Potential GDP. 16. What was responsible for the German hyperinflation and inflation after the American Revolution? A) Crop freezes that caused a food shortage. B) Fiscal policies designed to reduce the federal debt. C) Too much money being printed. D) The struggle for independence. Show Answer Correct Answer: C) Too much money being printed. 17. Which group benefits from negative real interest rates? A) Borrowers. B) Savers. C) No-one. D) None of above. Show Answer Correct Answer: A) Borrowers. 18. The ..... of a product or services is the group of people it is aimed at A) Target market. B) Market leader. C) Market research. D) None of above. Show Answer Correct Answer: A) Target market. 19. What statistical series is used to compute inflation? A) The leading economic price index. B) The consumer price index (CPI). C) The monthly market basket. D) The producer price index (PPI). Show Answer Correct Answer: B) The consumer price index (CPI). 20. What is the main cause of deflation in an economy? A) High demand. B) Low demand. C) Government intervention. D) Rising energy costs. Show Answer Correct Answer: B) Low demand. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesInflation And Deflation Quiz 1Inflation And Deflation Quiz 2Inflation And Deflation Quiz 3Inflation And Deflation Quiz 4Inflation And Deflation Quiz 5Inflation And Deflation Quiz 6Inflation And Deflation Quiz 7Inflation And Deflation Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books