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Multiple Choice Quiz
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1
When the general level of prices is rising, we call that:
A)deflation.
B)inflation.
C)elevation.
D)none of the above.
2
When prices rise slowly and predictably, we call that:
A)galloping inflation.
B)low inflation.
C)hyperinflation.
D)deflation.
3
When inflation is in the double or triple digits, we call that:
A)galloping inflation.
B)low inflation.
C)hyperinflation.
D)deflation.
4
When inflation is at a million or trillion percent per year, we call that:
A)galloping inflation.
B)low inflation.
C)hyperinflation.
D)deflation.
5
Demand-pull inflation occurs when:
A)imports exceed exports.
B)aggregate demand rises more rapidly than the economy's productive potential.
C)both a and b.
D)neither a nor b.
6
The short-run _______ shows the inverse relationship between inflation and unemployment.
A)aggregate supply curve
B)aggregate demand curve
C)Phillips Curve
D)NAIRU
7
The unemployment rate consistent with a constant inflation rate is called:
A)NAIRU
B)hyperinflation
C)Phillips rate
D)none of the above.
8
The long-run Phillips curve:
A)is horizontal at the NAIRU.
B)is vertical at the NAIRU.
C)is fixed at the origin.
D)does not exist.
9
During a period of high inflation:
A)lenders are worse off because they are repaid with currency that is worth more.
B)lenders are worse off because they cannot find anyone who wants a loan.
C)borrowers are better off because they can pay off their loans with currency that is worth less.
D)borrowers are worse off because they have to pay off their loans with currency that is worth more.
10
Low inflation is characterized by which of the following:
A)people trust money.
B)prices rising slowly and predictably.
C)people are willing to write long-term contracts in money terms.
D)all of the above.





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