If the annual inflation rate is 5% per year, and the nominal interest rate is 6%

the real interest rate is 1% per year

The Consumer Price Index measures the cost of:

a fixed market basket of consumer goods and services

Which of the following can start an inflation?

Both answers A and C are correct.

Inflation is defined as a(n):

sustained increase in the general price level

The real rate of interest can best be expressed as the:

nominal interest rate minus the inflation rate

Demand-pull inflation is induced by:

right shift in the aggregate demand curve

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Inflation

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Questions 10

Answers

1
If the annual inflation rate is 5% per year, and the nominal interest rate is 6%
the real interest rate is 5% per year
the real interest rate is 11% per year
the real interest rate is 6% per year
the real interest rate is 1% per year
2
The Consumer Price Index measures the cost of:
all goods and services produced in the U.K. economy
all goods produced in the U.K. economy
a fixed market basket of consumer goods and services
3
A rightward shift in the aggregate demand curve generates a _______inflation and _______output
demand-pull; higher
cost-push; lower
cost-push; higher
demand-pull; lower
4
Demand-pull inflation is an inflation that results from an initial ________.
increase in aggregate demand
increase in wage rates
decrease in aggregate demand
increase in natural resource prices
5
During inflation, those on fixed incomes do better than those on variable incomes
False
True
6
A leftward shift in the aggregate supply curve generates a _______ inflation and_______output
cost-push; lower
demand-pull;higher
demand-pull; lower
cost-push; higher
7
Which of the following can start an inflation?
an increase in aggregate supply
a decrease in aggregate supply
an increase in aggregate demand
Both answers A and C are correct.
8
Inflation is defined as a(n):
increase in the price of a specific commodity (or service)
increase in some prices
sustained increase in the price of a specific commodity
sustained increase in the general price level
9
The real rate of interest can best be expressed as the:
inflation rate minus the nominal interest rate
nominal interest rate minus the real rate
inflation rate minus the real interest rate
nominal interest rate minus the inflation rate
10
Demand-pull inflation is induced by:
left shift in the aggregate demand curve
right shift in the aggregate supply and demand curves
right shift in the aggregate demand curve
left shift in the aggregate supply curve

Inflation Flashcards | StudBud