This quiz works best with JavaScript enabled. Home > Economics > Macroeconomics > Inflation And Deflation > Inflation And Deflation – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation And Deflation Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Lower prices mean money is worth (a) . A) A more. B) Less. Show Answer Correct Answer: A) A more. 2. Inflation is the state in which ..... A) The value of money decreases. B) The value of money increases. C) The value of the money increases first and then decreases. D) The value of money decreases first and increases later. Show Answer Correct Answer: A) The value of money decreases. 3. A consequence of high inflation is that it benefits borrowers. A) True. B) False. Show Answer Correct Answer: A) True. 4. The average level of prices based on a range of prices A) Base year. B) Price index. C) Weighting. D) Representative basket. Show Answer Correct Answer: B) Price index. 5. What is not an affect of deflation on firms? A) Increase in wages. B) Reduced business confidence. C) Increased in cash held. D) Decrease in investments. Show Answer Correct Answer: A) Increase in wages. 6. People who underemployed A) No longer look for work. B) Work part time or at jobs that are below their skills. C) Are the same as unemployed workers. D) Experience only frictional employment. Show Answer Correct Answer: B) Work part time or at jobs that are below their skills. 7. The price level in America in the beginning of 2016 is $ 490 and the rate of inflation over the year is-3%. What is the price level at the start of 2017? A) $ 475.30. B) $ 504.70. C) $ 487.00. D) $ 147.00. Show Answer Correct Answer: A) $ 475.30. 8. Captures inflation across a range of consumer expenses and reflects changes in consumer behavior when some prices rise. A) GDP Deflator. B) Consumer Price Index. C) Personal Consumption Expenditures Index. D) None of above. Show Answer Correct Answer: C) Personal Consumption Expenditures Index. 9. In ..... inflation prices rise about 2% annually. A) Creeping. B) Walking. C) Running. D) Hyper. Show Answer Correct Answer: A) Creeping. 10. 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. 11. Which of the following is NOT true about the Consumer Price Index? A) Measures a market basket of goods. B) It is used to measure unemployment. C) It overstates inflation felt by most consumers. D) Housing is the largest part of its calculation. Show Answer Correct Answer: B) It is used to measure unemployment. 12. Demand-Pull inflation can be describes as too many ..... chasing too few ..... A) Jobs, workers. B) Consumers, producers. C) Dollars, goods. D) Banks, customers. Show Answer Correct Answer: C) Dollars, goods. 13. When deflation occurs, everything is falling in value except: A) Income. B) Prices. C) Debt. D) Commodities. Show Answer Correct Answer: C) Debt. 14. When inflation spirals out of control, it is called (a) (when prices increase by more than 50% per month). A) A hyperinflation. B) Deflation. C) Inflation. D) None of above. Show Answer Correct Answer: A) A hyperinflation. 15. On reason that Deflation is a problem is that A) Consumers pay lower prices for goods. B) Fixed incomes rise in real terms. C) Borrowers struggle to repay debt. D) Savers see falling returns for their savings. Show Answer Correct Answer: C) Borrowers struggle to repay debt. 16. Which of the following is not a measure of inflation? A) PPI. B) CPI. C) QPI. D) RPI. Show Answer Correct Answer: C) QPI. 17. If income velocity is held constant, then MV = A) PQ. B) P. C) Y. D) None of above. Show Answer Correct Answer: A) PQ. 18. True or false? Inflation has only negative effects on economies. A) True. B) False. Show Answer Correct Answer: B) False. 19. What is the best measure of a nation's standard of living? A) Real GDP per capita. B) Population growth. C) Savings. D) National income. Show Answer Correct Answer: A) Real GDP per capita. 20. 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. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesInflation And Deflation Quiz 1Inflation And Deflation Quiz 2Inflation And Deflation Quiz 4Inflation And Deflation Quiz 5Inflation And Deflation Quiz 6Inflation And Deflation Quiz 7Inflation And Deflation Quiz 8Inflation And Deflation Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books