INFLATION QUIZ

Quiz

An increase in the general price level is called....
Winners from high inflation are.......
1. Savers
2. Borrowers
3. Firms trading domestically.
4. Holders of monetary wealth.
5. People on fixed incomes.
6. Holders of real wealth such as assets.
7. Firms trading internationally.
8. Incomes that rise faster than inflation.
Which of the following are true?
1. Inflation occurs when there is an increase in the general price level.
2. When inflation occurs some prices may remain the same or even fall.
3. An increase in the price of petrol is inflation.
4. If inflation is high consumers are more likely to save as there are expectations of inflation.
5. In times of high inflation firms are more likely to do speculative investment rather than real investment.
6. If there is high inflation then a country's exports are likely to fall.
7. The functions of money as a unit of account and store of value can be undermined, in terms of inflation.
8. High inflation can result in an increase in business confidence.
A decrease in the general price level is called....
A decrease in the rate of inflation is called...
When a persons wages are increased to compensate for inflation. But because of the wage increase they have now moved into a higher tax bracket.
The above diagram shows a...
The above diagram shows a....
The asset demand for money will
1. increase if firms and consumers wish to buy more goods and services.
2. fall if real interest rates increase.
3. fall if people are wanting to hold cash as part of their wealth.
4. fall if people desire to hold money as a medium of exchange.
An increase in the money supply will
1. shift the aggregate demand curve to beyond full employment.
2. increase output a lot.
3. increase inflation if the economy is near full employment.
4. reduce inflationary pressures.
Which of the following could have resulted in the above situation?
1. An increase in income tax
2. An increase in the money supply.
3. An increase in disposabe income.
4. An appreciation of the exchange rate.
5. A depreciation of the exchange rate.
6. An increase in consumer confidence.
7. A fiscal surplus.
8. A contractionary monetary policy.
9. An expansionary monetary policy.
The Aggregate Demand curve will move to the right if
1. interest rates fall.
2. productivity increases.
3. business confidence declines.
4. imports increase.
Which of the following could have caused the above situation?
1. Increase in the cost of production.
2. Increase in nominal wages.
3. Increase in productivity.
4. A depreciation of the exchange rate.
5. An increase in business confidence.
6. An increase in import costs.
Real wages are nominal wages taking into account _____________.
Real interest rates are nominal interest rates taking into account _______________.
Inflation erodes the purchasing power of money. When prices rise, the same amount of money buys less and less. And so it is a disincentive to ____________
Because of inflation savings lose ____________ ______________
If wage rates are increasing to compensate for higher prices, your wage increase may move you up into a higher tax bracket. If your wage rate is just matching inflation you are paying a higher proportion in tax, making you worse off. This is called _______ ________.
Which of the following will inflation have a negative impact on?
1. Savers
2. Investors
3. Borrowers
4. Speculators
5. Producers
6. Fixed income earners
7. Exporters
8. Importers
9. Beneficiaries
The "price of money" is the _________ _________
The demand for money to buy goods and services is called the ____________________ demand for money.