Inflation And Deflation Quiz 19 (25 MCQs)

Quiz Instructions:

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1. How does inflation affect the purchasing power of money?

2. An increase in aggregate demand may not always lead to demand-pull inflation in

3. The _____ measures the price change of a selected group of consumer goods and services overtime

4. Which of the following is NOT a consequence of inflation?

5. What is an effect of inflation on firms?

6. What is the Consumer Price Index (CPI) used for?

7. In the long run, inflation is caused by

8. Who, among the following, is most likely to benefit during a period of rapid inflation?

9. Which of the following is likely to cause supply-side deflation?

10. Which policy mix is most likely to be effective in the short run for reducing inflation in a closed economy? D

11. A representative selection of commonly purchased goods and services used by consumers is called the

12. True or false? The economy benefits from an inflation rate which is at 0.

13. Which of the following types of inflation interferes with a company's ability to plan for the future?

14. What is the second stage when calculating the price level in the UK?

15. Who benefits most from deflation?

16. _____ is when prices rise and are pushed up because the cost of resources and labor increases.

17. A situation of rising prices resulting from increases in the cost of production.

18. What is the true measure of wealth?

19. In which year did the French army take over the German Ruhr coalfields?

20. In the long-run, the growth rate of money supply determines the growth rate of the _____ according to the quantity theory of money

21. Which option would not cause demand-pull inflation?

22. More people working from home causes many people to buy desks and shelving, leading furniture stores to increase prices.

23. True or false? The consumer price index measures the price of a basket of food stuffs every year.

24. If the nominal interest rate is 6 per cent and the inflation rate is 3 per cent, the real interest rate is

25. Which year is the base year? 1997 CPI = 95 1998 CPI = 97 1999 CPI = 100 2000 CPI = 104