Term Exam Review: Economics

Which of the following is NOT an effect of inflation?

• Less Savings

• Reduced Purchasing Power

• Increased Spending

• Increased Poverty Rate

Is inflation a normal economic phenomenon?

• Yes, it just naturally happens without human intervention.

• Yes, a small amount of inflation is normal in a healthy economy.

• No, it is a product of the incompetence of the government.

• No, inflation regardless of its rate will always do harm to all the sectors of the economy.

What do you call to the economic tool which measures price changes of a

representative basket of selected goods and services consumed by a typical

household during a specific time frame? Additionally, this tool is used to

compute for the inflation rate of the economy.

• Consumer Price Income

• Consumer Price Expectation

• Consumer Price Interest

• Consumer Price Index

What do you think are the missing economic terms that would complete the

sequence in the box?

• Economy and Recession

• Inflation and Supra-inflation

• Inflation and Recession

• Inflation and Ultra-inflation

Which of the following economic indicators is used to measure inflation?

• Gross National Income (GNI)

• Consumer Price Index (CPI)

• Unemployment Rate

• Demand and Supply Curve

How does studying the historical trends of inflation over the course of years and

decades help?

• It guarantees that there will never be another recession.

• When the price of any given commodity rises.

• When the average price of most goods and services rises.

• It enables us to develop strategies to manage future economic fluctuations.

Which of the following MUST decline to slow cost-push inflation?

• Debt

• Production Cost

• Tax

• Supply

When does inflation usually occur?

• When the aggregate demand rises.

• When the price of any given commodity rises.

• When the average price of most goods and services rises over time.

• When the tax rate is lower than the expected government spending rate.

Which of the following MUST decline to slow demand-pull inflation?

• Spending

• Social Services

• Taxation

• Production Capacity

How does monitoring inflation helps the policymakers in making the best

economic and political decisions in the country?

• It can help them eliminate poverty.

• It can help them predict the future stock market performance.

• It can help them freely control the price of goods and services.

• It can help them make informed decisions about the appropriate economic measures such as lowering or increasing interest rates and taxes.