Chapter 5 - Inflation
Question 1
Choose the phase of business cycle in which unemployment is at the lowest level.
Peak
Recession
Trough
Recovery
Question 2
If the Consumer price Index (CPI) for the year 2019 is equal to 190 and for year 2020 is equal to 218, count the value of the inflation rate in the year 2020.
12.8%
14.7%
85.3%
87.2%
Question 3
An increase in the price of raw materials causes inflation known as ________________ inflation
profit push
import push
cost push
demand pull
Question 4
Which of the following group will gain profit during inflation?
Pensioner
Fixed income worker
Holders of fixed deposits in a bank
Businessman
Question 5
Every country experiencing inflation is in the trap of liquidity. Government action to overcome the country's economy is _________________.
increase the bank rate
increase reserve requirement ration
reduce money supply
adopt a surplus budget policy
Question 6
Inflation caused by an increase in aggregate spending is referred to
wage-push inflation
imported inflation
demand-pull inflation
profit-push inflation