Economics Quiz

Which of the following best describes inflation?

• a) A decrease in the overall price level

• b) An increase in the overall price level

• c) A decrease in unemployment rate

• d) An increase in the exchange rate

The aggregate demand and supply model represents the relationship between which two factors?

• a) Unemployment and inflation

• b) Government spending and taxation

• c) Price level and quantity of output

• d) Savings and investment

According to the quantity theory of money, inflation is primarily caused by an increase in which of the following?

• a) Government expenditure

• b) Consumer spending

• c) Money supply

• d) Interest rates

How does inflation typically affect households?

• a) It reduces the purchasing power of their income

• b) It increases their savings

• c) It decreases their debt burden

• d) It has no impact on households

Monetary policy is primarily controlled by which of the following institutions?

• a) Central bank

• b) Stock exchange

• c) Ministry of Finance

• d) International Monetary Fund