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Inflation And Deflation Quiz 12 (25 MCQs)

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1. What is the purpose of the Consumer Price Index (CPI)?
2. What are the three ways governments can contral inflation?
3. What is a countermeasure to combat deflation?
4. What is the effect of inflation on investment returns?
5. Deflation (when prices go down) is good for the economy.
6. Which out of the following is phenomenon that leads to Deflation?
7. A high rate of inflation is likely to have all of the effects listed below except
8. You can represent cost-push inflation in a diagram through _____
9. Which of the following is NOT a reason why deflation rarely happens?
10. What happens to the volcano's slope after an eruption?
11. What is the main problem with inflation that countries have faced over the past 50 years?
12. In the short run, attempting to reduce inflation can lead to what effect?
13. Which is the correct term for a fall in the rate of inflation?
14. What happens to the inflation rate when unemployment goes up?
15. When demand-pull inflation occurs which way does the aggregate demand [AD] curve shift?
16. In the CPI:Food is weighted at 40%Non-Food is weighted at 60% If the price of Food rises by 5% and the price of Non-Food rises by 10%, what is that CPI rate of inflation?
17. Which term describes the rate at which money value decreases and/or prices increase?
18. How does deflation affect savings?
19. Old people are more likely than young people to talk about prices these days because _____
20. Which effect of inflation is described as redistributive?
21. If you expect inflation to increase to 9% next year, which of the following investment strategies should you select to protect yourself against inflation?
22. What is the impact of falling prices on consumer and business confidence?
23. What are some economic indicators used to measure inflation?
24. Deflation may be a more serious problem than inflation because it may lead to
25. The Consumer Price Index. If the price index is 100 today and 105 in one year's time, what will the inflation rate be?
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