The Inflation Quiz: Economics Trivia!
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Inflation in economic terms is the rate in which the prices of daily goods increase. The increased rate puts weight in a country's economy up to a point where its currency does not have value. This quiz gives you a chance to test out just how much you know about inflation. Do give it a try and see how well you will do and learn.
- 1.What is the definition of inflation?
- A.
A. A kind of statistics which shows the changes in the prices of commonly bought goods and services from one year to another.
- B.
B. An amount of value which represents the total spending of the year.
- C.
C. A rise in the average prices of most goods and services in one year as compared to those in the previous year
- D.
D. A fall in the average prices of most goods and services in one year as compared to those in the previous year.
- 2.On the basis of speed, what are the 4 main types of inflation?
- A.
A. Mild inflation, walking inflation, running inflation and hyperinflation.
- B.
B. Mild inflation, walking inflation, running inflation and galloping inflation.
- C.
C. Mild inflation, walking inflation, galloping inflation and hyperinflation
- D.
D. Mild inflation, running inflation, galloping inflation and hyperinflation.
- 3.The purchasing power of money is measured:
- A.
A. on an annual basis
- B.
B. on a monthly basis
- C.
C. by comparing the exchange rates
- D.
D. by comparing the prices of the two goods
- 4.The changes in the purchasing power of the national money result in:
- A.
A. inflation
- B.
B. deflation
- C.
C. Both A&B are correct
- D.
D. none of the above are correct
- 5.The cost of changing prices:
- A.
A. Money Illusion
- B.
B. Shoeleather costs
- C.
C. Opportunity costs
- D.
D. Menu costs
- 6.The value of the CPI for the reference period is always
- A.
A. 100
- B.
B. 0
- C.
C. 50
- D.
D. None of above we do not know
- 7.If the amount of money remains unchanged, but production increases, then the prices will______
- A.
A. increase
- B.
B. decrease
- C.
C. reach the equilibrium level
- D.
D. stay the same
- 8.What is the equation of exchange?
- A.
A. MV=PT
- B.
B. MT=PV
- C.
C. MP=TV
- 9.“Too much money chasing too few goods” means:
- A.
Demand Pull
- B.
Cost-Push
- 10.Who are not likely to be the victims of inflation?
- A.
A. Retired people
- B.
B. People with savings
- C.
C. People with low income
- D.
D. People who invest in stocks
- 11.Hyperinflation occurs when prices have risen by more than 50% per month over a period of time.
- A.
True
- B.
False
- 12.The purchasing power of money is the value of a region’s currency.
- A.
True
- B.
False
- 13.If you wished to calculate the rate of price inflation for all goods produced in a nation, you would use the Consumer Price Index.
- A.
True
- B.
False
- 14.The velocity of circulation is the average number of times in a month a dollar is used to purchase goods and services.
- A.
True
- B.
False
- 15.The use of electronic banking devices increases velocity?
- A.
True
- B.
False
- 16.Demand-pull inflation means that the demand for buyers is pulling prices of goods and services to lower and higher levels.
- A.
True
- B.
False
- 17.In general, private pension incomes of retirees are flexible.
- A.
True
- B.
False
- 18.An increase in prices during inflation makes a few differences to cheap labor.
- A.
True
- B.
False
- 19.In a long run, inflation is of advantage to some particular types of people.
- A.
True
- B.
False
- 20.People who borrow money before inflation comes might reap benefits.
- A.
True
- B.
False
- 21.Moderate inflation includes mild inflation and [Blank].
- 22.When the price of good rises, the purchasing power of money, the pound (for example), [Blank].
- 23.The consumer price index measure the average of prices by urban customers for an [Blank] of consumer goods and services.
- 24.The quantity theory of money is based on the [Blank] and the [Blank].
- 25.Money circulates in the economy from [Blank] to [Blank], and back to customers several times a year.
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