This quiz works best with JavaScript enabled. Home > Finance > Economics > Macroeconomics > Inflation And Deflation > Inflation And Deflation – Quiz 6 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Inflation And Deflation Quiz 6 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is NOT one of the constants the aggregate supply curve assumes? A) Rate of production. B) Resource prices. C) Rules providing production incentives. D) State of technology. Show Answer Correct Answer: A) Rate of production. 2. Which of the following is not an advantage of Inflation? A) It encourages consumption. B) It reduces the value of debt. C) It allows struggling firms to raise prices. D) It raises the price of Exports. Show Answer Correct Answer: D) It raises the price of Exports. 3. Which cause of inflation occurs when excessive growth in demand in the economy results in shortages and firms raise prices? A) Cost-push inflation. B) Demand-pull inflation. C) Price-push inflation. D) Supply-pull inflation. E) None of the answers. Show Answer Correct Answer: B) Demand-pull inflation. 4. How is inflation measured using the CPI? A) By tracking the prices of a basket of goods and services commonly purchased by households. B) By tracking the prices of goods and services in only one region or city. C) By tracking the prices of luxury goods and services. D) By tracking the prices of goods and services commonly purchased by businesses. Show Answer Correct Answer: A) By tracking the prices of a basket of goods and services commonly purchased by households. 5. What are the main causes of inflation? A) Increase in money demand, demand-pull deflation, cost-push deflation, and deflation expectations. B) Increase in money supply, demand-pull inflation, cost-push inflation, and inflation expectations. C) Decrease in money supply, deflation expectations, demand-pull deflation, and cost-push deflation. D) Decrease in money demand, demand-pull deflation, cost-push deflation, and deflation expectations. Show Answer Correct Answer: B) Increase in money supply, demand-pull inflation, cost-push inflation, and inflation expectations. 6. How does inflation affect purchasing power? A) Purchasing power increases. B) Purchasing power decreases. Show Answer Correct Answer: B) Purchasing power decreases. 7. When a farm worker loses his job after the harvest, it is an example of A) Frictional unemployment. B) Structural unemployment. C) Seasonal unemployment. D) Cyclical unemployment. Show Answer Correct Answer: C) Seasonal unemployment. 8. It is the continuing increase in the general price level of commodities A) Inflation. B) HyperInflation. C) Cost-push. D) Demand-pull. Show Answer Correct Answer: A) Inflation. 9. What is the role of the central bank in controlling inflation? A) The central bank controls inflation through monetary policy measures. B) The central bank controls inflation through supply and demand. C) The central bank controls inflation through fiscal policy measures. D) The central bank has no role in controlling inflation. Show Answer Correct Answer: A) The central bank controls inflation through monetary policy measures. 10. What causes demand-pull inflation? A) A decrease in the availability of productive resources. B) An increase in production costs. C) Too much money chasing too few goods. D) A decrease in consumer spending. Show Answer Correct Answer: C) Too much money chasing too few goods. 11. A decrease in general price level is called ..... A) Low inflation. B) Disinflation. C) Hyperinflation. D) Deflation. Show Answer Correct Answer: D) Deflation. 12. Who did the French send into the Ruhr coalfields after Germany failed to pay their reparations? A) French women and children. B) French troops. C) French politicians. D) French footballers. Show Answer Correct Answer: B) French troops. 13. When someone says "in today's dollars", they are ..... A) Talking about money that they earned today. B) Adjusting for inflation. C) Complaining about taxes. D) None of above. Show Answer Correct Answer: B) Adjusting for inflation. 14. Which is an effect of inflation on consumers? A) Increases real value of investment. B) Leads to possible lower interest rates. C) Increases the real value of debt. D) Decreases real value of savings. Show Answer Correct Answer: D) Decreases real value of savings. 15. Inflation caused by a rise in wage rates would be classified as ..... A) Demand pull. B) Demand push. C) Cost push. D) Cost pull. Show Answer Correct Answer: C) Cost push. 16. What percentage of German coal, iron and steel reserves did the Ruhr contain? A) 80%. B) 1%. C) 10%. D) 50%. Show Answer Correct Answer: A) 80%. 17. The quantity of goods and services a person can buy with a given amount of money. A) Bank. B) Inflation. C) Buying Power. D) None of above. Show Answer Correct Answer: C) Buying Power. 18. What is the highest point of real GDP called? A) Contraction. B) Peak. C) Trough. D) Expansion. Show Answer Correct Answer: B) Peak. 19. ..... is when prices fall and the value of money increases. A) Deflation. B) Fixed Income. C) Inflation. D) Cost-Push Inflation. Show Answer Correct Answer: A) Deflation. 20. Inflation increases all price, including wages A) False. B) Correct. Show Answer Correct Answer: B) Correct. 21. Real flow is also known as nominal flow A) True. B) False. Show Answer Correct Answer: B) False. 22. With inflation, Aggregate Demand is greater than Aggregate Supply A) True. B) False. Show Answer Correct Answer: A) True. 23. If minimum wage is $ 10 an hour now, and it keeps up with inflation at a rate of 8%, how much would it be 50 years from now? A) $ 469. B) $ 46.60. C) $ 10. D) $ 160. Show Answer Correct Answer: A) $ 469. 24. Which of the following is most likely to gain from deflation? A) Borrowers. B) Lenders. C) Firms. D) Workers. Show Answer Correct Answer: B) Lenders. 25. Which is most likely to lead to a fall in the rate of inflation? A) A decrease in import prices. B) An increase in unemployment benefits. C) An increase in consumer spending. D) A decrease in income tax. Show Answer Correct Answer: A) A decrease in import prices. 26. True or false? Inflation is most likely to increase during economic expansion? A) False. B) True. Show Answer Correct Answer: B) True. 27. A person who is looking for full-time work, but who only works part-time is described as ..... A) Not a member of the workforce. B) Underemployed. C) Employed. D) Unemployed. Show Answer Correct Answer: B) Underemployed. 28. What does the term 'real' mean in relation to prices? A) Prices that haven't been adjusted for inflation. B) Prices that are based on consumer preferences. C) Prices that have been adjusted for inflation. D) Prices that are influenced by market trends. Show Answer Correct Answer: C) Prices that have been adjusted for inflation. 29. What did Friedrich Ebert's government do to solve the problem of inflation/rising prices? A) He printed off more money. B) He did nothing. C) He ordered a reduction in prices. D) None of above. Show Answer Correct Answer: A) He printed off more money. 30. Which of the following describe as 'a very rapid and large rise in the price level'? A) Cost-push inflation. B) Demand-pull inflation. C) Monetary inflation. D) Hyperinflation. Show Answer Correct Answer: D) Hyperinflation. ← 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 7Inflation And Deflation Quiz 8Inflation And Deflation Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books