Basic Concepts of Inflation Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. When demand exceeds supply, what type of inflation has occurred?

Question 2 2. What is inflation?

Question 3 3. Which one is a type of inflation?

Question 4 4. What is one effect of inflation?

Question 5 5. When inflation occurs, what happens to income?

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Question 6 6. Which of the following can temporarily benefit from deflation?

Question 7 7. What is the opposite of deflation?

Question 8 8. What happens with the supply of money during deflation?

Question 9 9. Which of the following is the best explanation of deflation?

Question 10 10. Which of the following is the best explanation of a deflationary spiral?

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Question 11 11. Warren Buffett recommends that we think of changes in currencies in terms of how many more or less _____ you can buy.

Question 12 12. The money illusion describes the human tendency to think of currencies in just nominal terms, instead of _____.

Question 13 13. The 'silent crash' is an example of the money illusion because during the mid-1970s stocks _____ while prices increased by 35%.

Question 14 14. Who wrote the book The Money Illusion in 1928?

Question 15 15. In our example above, which aunt has the better reason to gloat to her sister?

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Question 16 16. What does inflation mean?

Question 17 17. What are the two general theories offered to explain stagnation?

Question 18 18. Which one of the following is the best explanation of stagflation?

Question 19 19. What is stagnation?

Question 20 20. Which of the following is an effect of stagflation?

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Question 21 21. If a country has a money supply of 20 billion dollars, a real GDP of 100 billion dollars, and a price level of 1, then what's the velocity of money in this country?

Question 22 22. How can government overspending cause hyperinflation?

Question 23 23. Economists use the _____ to explain the link between inflation and the money supply.

Question 24 24. What's hyperinflation?

Question 25 25. Hyperinflation is usually associated with:

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Question 26 26. A retired woman lives entirely on Social Security income, while a farmer borrows money to buy a new tractor. How would inflation affect them?

Question 27 27. Unexpectedly high inflation _____ savers and _____ borrowers.

Question 28 28. What happens when actual inflation is higher than expected inflation?

Question 29 29. Which of the following would be negatively affected from unanticipated inflation?

Question 30 30. Which of the following groups of people will benefit from unexpected inflation?

Basic Concepts of Inflation Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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