This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Inflation And Deflation > Inflation And Deflation – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation And Deflation Quiz 19 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. We use price indices to help gauge inflation within an economy. A) True. B) False. Show Answer Correct Answer: A) True. 2. Who is in charge of trying to maintain price stability in the European Union? A) National banks. B) National governments. C) The European Central Bank. D) The European Union. Show Answer Correct Answer: C) The European Central Bank. 3. Which of these is not a problem with the consumer price index (CPI)? A) The CPI does not take into account changes of product quality over time. B) The CPI does not take into account changes in consumption patterns. C) The CPI does not allow for reliable inflation rate comparisons between countries. D) The CPI does not measure changes in real GDP over time. Show Answer Correct Answer: D) The CPI does not measure changes in real GDP over time. 4. ..... is a measure of price change in a selected market basket of goods and services such as gasoline, food, clothing, and automobiles. A) Demand-Pull Inflation. B) Consumer Price Index (CPI). C) Deflation. D) Fixed Income. Show Answer Correct Answer: B) Consumer Price Index (CPI). 5. Consumers may defer consumption when A) They face a rising rate of inflation. B) They face disinflation. C) The face deflation. D) They face lower interest rates. Show Answer Correct Answer: C) The face deflation. 6. If aggregate demand rises faster than producers can supply goods services A) Demand-pull inflation. B) Cost-push inflation. C) Inflation. D) None of above. Show Answer Correct Answer: A) Demand-pull inflation. 7. Which is the following people is a member of the labour force? A) A retired person. B) A person of working age who has given up looking for work. C) A person without a job who is actively seeking work. D) A child at school. Show Answer Correct Answer: C) A person without a job who is actively seeking work. 8. If the CPI is 93 in 2017 and 97 in 2018, calculate the rate of inflation from 2017 to 2018. A) 4.3%. B) 4.12%. C) 4%. D) 5.1%. E) None of the answers. Show Answer Correct Answer: A) 4.3%. 9. What is Miguel's real rate of return? Miguel makes 4% on a U.S. Savings bond and inflation was 3%. A) 4%. B) 3%. C) 1%. D) 7%. Show Answer Correct Answer: C) 1%. 10. When inflation is high the ..... of money decreases A) Validity. B) Cost value. C) Importance. D) Purchasing power. Show Answer Correct Answer: D) Purchasing power. 11. Why is the minimum wage now higher than the minimum wage when your dad was your age? A) Because more people go to college. B) Because the population has increased. C) Because price inflation has caused wage inflation. D) Employers are nicer now than they used to be. Show Answer Correct Answer: C) Because price inflation has caused wage inflation. 12. With higher inflation a country exports A) Less. B) More. Show Answer Correct Answer: A) Less. 13. The rate of inflation can help you calculate how much you should ..... A) Ask to be paid. B) Spend on food. C) Pay in taxes. D) Give to your family. Show Answer Correct Answer: A) Ask to be paid. 14. If a country had a CPI of 104.0 last year and a CPI of 101.0 this year, then A) The average quality of goods and services between last year and this year. B) The average prices of goods and services increased between last year and this year. C) The average prices of goods and services decreased between last year and this year. D) The quantity of consumer goods and services produced decreased between last year and this year. Show Answer Correct Answer: C) The average prices of goods and services decreased between last year and this year. 15. What is most likely to happen when a government repeatedly boosts the economy by printing more money? A) People end up with a higher standard of living in the long run. B) The banks have too much money on hand and lend it at much cheaper interest rates. C) People come to expect the increases so they prepare for higher prices. D) The economy grows faster and becomes more stable. Show Answer Correct Answer: C) People come to expect the increases so they prepare for higher prices. 16. The CPI measures the cost of goods and services in a typical household in the economy. A) True. B) False. Show Answer Correct Answer: A) True. 17. Which one of the following is not a possible cause of demand-pull inflation? A) An increase in government spending. B) An increase in the oil price. C) An increase in consumption spending. D) An increase in investment spending. Show Answer Correct Answer: B) An increase in the oil price. 18. If you currently pay $ 130 per week on food for yourself, how much would you expect to pay 35 years from now if inflation stays at 2%? A) $ 130. B) $ 260. C) $ 630.50. D) $ 4550. Show Answer Correct Answer: B) $ 260. 19. Explain the difference between demand-pull inflation and cost-push inflation. A) Demand-pull inflation is caused by an increase in demand, while cost-push inflation is caused by an increase in production costs. B) Demand-pull inflation is caused by a decrease in production costs, while cost-push inflation is caused by an increase in demand. C) Demand-pull inflation is caused by an increase in production costs, while cost-push inflation is caused by an increase in demand. D) Demand-pull inflation is caused by a decrease in demand, while cost-push inflation is caused by an increase in production costs. Show Answer Correct Answer: A) Demand-pull inflation is caused by an increase in demand, while cost-push inflation is caused by an increase in production costs. 20. What tool measures the change in distance between two instruments anchored into the volcano? A) Global Positioning System (GPS). B) Electronic Distance Meter (EDM). C) Tilt meter. D) None of above. Show Answer Correct Answer: A) Global Positioning System (GPS). ← 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