This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Inflation And Deflation > Inflation And Deflation – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation And Deflation Quiz 2 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. In the long-run, which variable is independent of MV? A) Real GDP (P). B) Nominal GDP. C) Price Level. D) None of above. Show Answer Correct Answer: A) Real GDP (P). 2. Inflation caused by an increase in consumption would be classified as ..... A) Demand pull. B) Demand push. C) Cost push. D) Cost pull. Show Answer Correct Answer: A) Demand pull. 3. ..... inflation is regarded as safe and essential for Economic Growth. A) Running. B) Hyper. C) Walking. D) Creeping. Show Answer Correct Answer: D) Creeping. 4. Inflation can be described as: A) An increase in the purchasing power of power. B) A decrease in the price of certain goods, such as oil or wheat. C) A decrease in the purchasing power of money. D) An increase in the price of certain goods, such as oil or wheat. Show Answer Correct Answer: C) A decrease in the purchasing power of money. 5. What is Disinflation? A) The amount one dollar can buy is reduced. B) Disinflation occurs when the price of goods and services rise. C) Decrease in the average price of goods and services. D) A decrease in the rates of inflation. Show Answer Correct Answer: D) A decrease in the rates of inflation. 6. Which of the following groups is likely to be better off in times of inflation? A) Borrowers. B) Savers. C) Pensioners. D) Lenders. Show Answer Correct Answer: A) Borrowers. 7. What is the term for increases in prices that economic actors are able to predict with accuracy? A) Disinflation. B) Hyperinflation. C) Unanticipated inflation. D) Anticipated inflation. Show Answer Correct Answer: D) Anticipated inflation. 8. ..... inflation affects the poor and middle class people adversely. A) Creeping. B) Walking. C) Hyper. D) Running. Show Answer Correct Answer: D) Running. 9. Which one of the following is not an essential feature of inflation targeting? A) The public announcement of quantitative inflation targets. B) A high degree of transparency. C) The recognition that the primary aim of the central bank is to ensure rapid economic growth. D) A broad based approach to the analysis of inflation. Show Answer Correct Answer: C) The recognition that the primary aim of the central bank is to ensure rapid economic growth. 10. Which of the following are policies are used to control deflation? A) Quantitative easing. B) Contractionary fiscal policy. C) Contractionary monetary policy. D) Supply-side policy. Show Answer Correct Answer: A) Quantitative easing. 11. Lower prices mean money is worth (a) . A) A more. B) Less. Show Answer Correct Answer: A) A more. 12. 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. 13. A consequence of high inflation is that it benefits borrowers. A) False. B) True. Show Answer Correct Answer: B) True. 14. The average level of prices based on a range of prices A) Base year. B) Price index. C) Representative basket. D) Weighting. Show Answer Correct Answer: B) Price index. 15. What is not an affect of deflation on firms? A) Decrease in investments. B) Reduced business confidence. C) Increase in wages. D) Increased in cash held. Show Answer Correct Answer: C) Increase in wages. 16. People who underemployed A) Are the same as unemployed workers. B) Experience only frictional employment. C) Work part time or at jobs that are below their skills. D) No longer look for work. Show Answer Correct Answer: C) Work part time or at jobs that are below their skills. 17. 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) $ 147.00. B) $ 504.70. C) $ 487.00. D) $ 475.30. Show Answer Correct Answer: D) $ 475.30. 18. 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. 19. In ..... inflation prices rise about 2% annually. A) Walking. B) Running. C) Creeping. D) Hyper. Show Answer Correct Answer: C) Creeping. 20. 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. 21. Which of the following is NOT true about the Consumer Price Index? A) It is used to measure unemployment. B) Housing is the largest part of its calculation. C) It overstates inflation felt by most consumers. D) Measures a market basket of goods. Show Answer Correct Answer: A) It is used to measure unemployment. 22. Demand-Pull inflation can be describes as too many ..... chasing too few ..... A) Consumers, producers. B) Jobs, workers. C) Banks, customers. D) Dollars, goods. Show Answer Correct Answer: D) Dollars, goods. 23. When deflation occurs, everything is falling in value except: A) Debt. B) Prices. C) Income. D) Commodities. Show Answer Correct Answer: A) Debt. 24. 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. 25. 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. 26. Which of the following is not a measure of inflation? A) PPI. B) CPI. C) RPI. D) QPI. Show Answer Correct Answer: D) QPI. 27. If income velocity is held constant, then MV = A) PQ. B) P. C) Y. D) None of above. Show Answer Correct Answer: A) PQ. 28. True or false? Inflation has only negative effects on economies. A) True. B) False. Show Answer Correct Answer: B) False. 29. What is the best measure of a nation's standard of living? A) Savings. B) Population growth. C) Real GDP per capita. D) National income. Show Answer Correct Answer: C) Real GDP per capita. 30. Level of GDP where all available factor inputs are fully employed A) Relative deflation. B) Full capacity output. C) Consumer price Index. D) Cost push inflation. Show Answer Correct Answer: B) Full capacity output. ← PreviousNext →Related QuizzesMacroeconomics QuizzesEconomics QuizzesInflation And Deflation Quiz 1Inflation And Deflation Quiz 3Inflation 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