
Unit 29-31 MCQs Practice
Quiz
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Business, Social Studies
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10th Grade
•
Practice Problem
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Medium
Sophia Lu
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22 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What does a consumer price index show?
How the price of domestically produced products has changed over time
How the price of a representative basket of goods and services has changed over time
How the wages of consumers have changed relative to the change in the price level
How the wages of consumers have changed relative to the costs of production
Answer explanation
A consumer prices index measures the price change of a sample of products that people spend
most on.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A country is experiencing a high rate of inflation. Which item would be the least desirable store of wealth?
Money
Property
Land
Shares
Answer explanation
Money loses its value with inflation. Each US $ will buy less. Property, land and shares are likely to lose less of their value with inflation and may even gain value.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In which circumstance would an increase in total (aggregate) demand be most likely to cause inflation?
It is caused by an increase in investment undertaken by expanding industries
It is the result of higher government spending on training which raises labour productivity
It occurs when there is a low level of spare capacity in the economy
It takes place when there is net immigration occurring
Answer explanation
When there is a low level of spare capacity in the economy, an increase in AD will be likely to push
up the price level as firms will be competing for scarce resources.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a cause of cost-pull inflation?
A reduction in direct taxes
A reduction in the rate of interest
An increase in bank lending
An increase in the price of raw materials
Answer explanation
Cost-push inflation is caused by an increase in the costs of production. A, B and C may cause demand-pull inflation.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a cause of demand-pull inflation?
A fall in labour productivity
A fall in investment
A rise in the budget deficit
A rise in a current account deficit
Answer explanation
A rise in the budget deficit would mean that the gap between government spending and taxation is increasing. It could be the result of a rise in government spending and/or a fall in taxation. In either case, aggregate demand would increase. B and D would reduce aggregate demand and A would increase costs of production.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In which circumstance would a rise in a country's inflation rate increase the international competitiveness of the products it produces?
The quality of the products produced by other countries improves at a more rapid rate
The price level of other countries increases at a more rapid rate
The country's exchange rate increases
The productivity of the country's labour force decreases
Answer explanation
If other countries’ price levels rise at a more rapid rate, this country’s products will become more internationally price competitive. A, C and D would all reduce the country’s price competitiveness.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which group is economically active?
Full-time students
Those who are too sick to work
Those who are officially classified as unemployed
Those who have retired early
Answer explanation
People are said to be economically active if they are in the labour force; that is, working or
seeking to work. A, B and D are economically inactive.
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