Economic Analysis MBA III

Inflation refers to:

• Decrease in general price level
  
  
  

• Sustained rise in general price leve

• Increase in production of goods

• Increase in employment

“Too much money chasing too few goods” explains:

• Cost-push inflation
  

• Demand-pull inflation
  

• Stagflation
  

• Deflation

Cost-push inflation occurs due to:

• Fall in demand
  

• Increase in cost of production
  

• Increase in exports
  

• Decrease in money supply

When both inflation and unemployment rise together, it is called:

• Hyperinflation

• Deflation

• Stagflation

• Disinflation

Which of the following is not a cause of demand-pull inflation?

• Population growth

• Government expenditure

• Lower interest rates

• Sudden rise in oil prices

Cost-push inflation is also called supply-side inflation.

• True

• False

In stagflation, output rises but prices remain constant.

• True

• False

Inflation reduces the purchasing power of money.

• True

• False

Demand-pull inflation originates from the supply side.

• True

• False

A rise in crude oil prices leading to inflation is an example of (a)   inflation.