MCQ Inflation Quiz

Quiz about Inflation, deflation and stagflation (Macroeconomics Concepts)

Question: Inflation represents:

(a) fall in price level

(b) increase the value of money

(c) decrease value of money

(d) None

Ans. (c)

Question: Which is the slowest inflation?

(a) Walking inflation

(b) running inflation

(c) Creeping inflation

(d) moderate inflation

Ans. (c)

Question: Inflation due to an increase in the price of industrial products is known as:

(a) Pricing power inflation

(c) Sectoral inflation

(b) Profit inflation

(d) None

Ans. (a)

Question: Cost – push inflation arises due to

(a) Rise in wages

(b) Rise in profit

(c) Rise in the prices of raw materials

(d) All of the above

Ans. (d)

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Question: Who said inflation is too much money chasing too few goods?

(a) Coulbourn

(b) Keynes

(c) Friedman

(d) Samuelsson

Ans. (c)

Question: The oil price rise is an example of:

(a) Sectoral inflation

(b) Demand pulled inflation

(b) Development inflation

(d) Pricing power inflation

Ans. (a)

Question: The rate of inflation for walking is:

(a) between 3 to 10%

(b) below 3 %

(c) More than 10%

(d) More than 3%

Ans. (a)

Question: ‘Stagflation’ is a situation that the economy faces

(a) Inflation

(b) Stagnation

(c) Inflation as well as stagnation

(d) None of the above

Ans. (b)

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Question: Demand inflation is due to:

(a) cost hike

(b) excess demand

(b) excess cost

(d) All

Ans. (b)

Question: Among the following, which is not a feature of inflation?

(a) long term process

(b) state of disequilibrium

(c) dynamic in nature

(d) non-monetary phenomenon

Ans. (d)

Question: Inflation is a situation where

(a) Prices are falling

(b) Value of money is falling

(c) Value of money is rising

(d) All of the above

Ans. (c)

Question: Cost push inflation can be controlled mainly by

(a) Fiscal policy

(b) Monetary policy

(b) Administrative policy

(d) All

Ans. (c)

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Question: Deflation means:

(a) falling price level

(b) rise in price level

(c) increase the value of money

(d) None

Ans. (a)

Question: In the case of ‘creeping inflation’, prices are rising at

(a) Less than 3% per month

(b) Less than 3% per annum

(c) Around 5% per month

(d) Around 5% per annum

Ans. (c)

Question: The term Stagflation was coined by:

(a) Keynes

(c) Samuelsson

(b) Friedman

(d) Brahmananda

Ans. (d)

Question: The price rise every second is referred as

(a) Running inflation

(b) Galloping inflation

(c) Walking inflation

(d) Hyper inflation

Ans. (d)

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Question: When prices of only a few commodities rise

(a) Sporadic Inflation

(b) suppressed inflation

(c) open inflation

(d) creeping inflation

Ans. (a)

Question: Inflation due to hording

(a) Credit inflation

(b) Scarcity inflation

(c) Profit inflation

(d) None

Ans. (b)

Question: The term Stagflation was coined by:

(a) Samuelson

(b) Iain Macleod

(b) Keynes

(d) None

Ans. (b)

Question: Which of the following is / are the easiest way(s) to handle inflation in the economy ?

(A) Increase the money supply in the economy.

(B) Curb the money supply in the economy,

(C) Increase the credit inflow in the economy.

(D) Curb the credit inflow in the economy.

(a) Only (A) and (C)

(b) Only (B) and (D)

(c) Only (A)

(d) None of these

Ans. (a)

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Question: Demand-pull inflation may be caused by:

(a) An increase in costs

(b) A reduction in interest rates

(c) A reduction in government spending

(d) An outward shift in aggregate supply

Ans. (b)

Question: What is the cause of inflation?

(a) If money supply increases.

(b) If the production rate falls.

(c) If money supply increases and production falls.

(d) Both money supply and production decrease

Ans. (c)

Question: What is cost-push inflation?

(a) Increasing money supply

(b) Increasing indirect tax

(c) Population increase

(d) expenditure increases unnecessarily

Ans. (b)

Question: Which of the following is an effect of inflation?

(a) Erosion in purchasing power

(b) Affects the relative price of goods

(c) Increase in inequality of income

(d) All the above

Ans. (d)

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Question: Inflation:

(a) Always reduces the cost of living

(b) Always reduces the standard of living

(c) Reduces the price of products

(d) Reduces the purchasing power of a currency

Ans. (d)

Question: What does inflation imply?

(a) Rise in budget deficit

(b) Rise in prices of consumer goods.

(c) rise in money supply.

(d) Rise in general price index

Ans. (d)

Question: How can inflation be checked temporarily?

(a) Increase in money supply

(b) Decrease in money supply

(c) Increase in wages

(d) Decrease in Tax

Ans. (b)

Question: 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

Ans. (a)

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Question: Because of trade (and imports), inflation

(a) increases

(b) decreases

(c) moderates

(d) disappears

Answer. (c)