Econ 2 Quiz - Inflation

Inflation is the steady and continuous decline in general price level?

• True

• False

Price level is

• prices in the economy

• the average of all prices in the economy

• the level that prices do no exceed

• the level that prices exceed

RPI stands for real price index

• True

• False

A one off increase in prices is not inflation

• True

• False

Demand pull inflation is one of the 4 contributing causes of inflation

• True

• False

An increase in the prices of the factors of production caused

• imported inflation

• an increase in the money supply

• cost push inflation

• demand pull inflation

The tenancy for wages to_______ which then fuels _____ - which in turn causes labour to demand _______ is known as wage-price spiral

• increase, price decrease,lower wages

• decrease, price increase,higher wages

• increase, price increase,higher wages

• decrease, price decrease, lower wages

Imported inflation is a cause of inflation

• True

• False

Who attributes inflation to a an increase in the economy's money supply ?

• financial advisors

• monetarists

• creditors

• none of the above

Which of the following is not a consequence of inflation?

• Fixed income earners will suffer a fall in real income

• Creditors will loose out

• Rising cost of production cannot be passed on

• Employers will be forced to reduce the quality of labour produced