Inflation

The rate of inflation is most commonly measured by use of

• a price deflator

• the GDP deflator

• the consumer price index

• all of the above

The consumer price index measures 

• the cost of buying a fixed basket of goods and services, and calculating how this cost changes from year to year

• the cost of buying a basket of goods and services, which changes from year to year depending on the price level

• the cost of buying a basket of goods and services, which changes from year to year depending on consumer tastes and preferences

• all of the above, depending on what the CPI is trying to measure

The redistribution effects of a high rate of inflation may involve losses for _____________________ and gains for _____________________.

• lenders/borrows

• borrowers/savers

• borrowers/lenders

• savers/holders of cash

A high rate of inflation is likely to have all of the effects listed below except

• uncertainty for business

• reduced saving

• efficiency losses

• greater export competitiveness

An increase in aggregate demand is likely to lead to

• demand-push inflation

• cost-push inflation

• demand-pull inflation

• cost-pull inflation

Demand-pull inflation and cost-push inflation differ in that

• demand-pull leads to lower real GDP and cost-push to higher real GDP

• demand-pull leads to higher real GDP and cost-push to lower real GDP

• demand-pull leads to greater unemployment and cost-push to lower unemployment

• a combination of the above, depending on the size of AD and SRAS shifts

An increase in aggregate demand may not always lead to demand-pull inflation in

• a monetarist new classical model

• the Keynesian model

• the short run

• the long run

Deflation may be a more serious problem than inflation because it may lead to

• a deflationary spiral

• a serious demand-deficient unemployment

• a banking crisis

• all of the above

        An inflationary gap involves

• cyclical unemployment greater than the natural rate of unemployment

• unemployment equal to the natural rate of unemployment

• cyclical unemployment less than the natural rate of unemployment

• zero cyclical unemployment and unemployment less than the natural rate of unemployment

Disinflation is

• a fall in the price level

• a decreasing rate of inflation

• an increasing rate of inflation

• no change to inflation or deflation