Question 1
What is meant by deflation?
A.
Rising costs shift SRAS left. B.
Sustained fall in the general price level. C.
Main UK inflation measure (ONS shopping basket). D.
Inflation rate falling but still positive.
Question 2
What is meant by menu costs?
A.
Costs of changing prices during inflation. B.
Inflation rate falling but still positive. C.
AD rises faster than SRAS can respond. D.
Sustained rise in the general price level.
Question 3
What is meant by bank of england target?
A.
Costs of changing prices during inflation. B.
Sustained rise in the general price level. C.
AD rises faster than SRAS can respond. D.
2% CPI with ±1% tolerance band.
Question 4
Demand-pull inflation occurs when:
A.
AD increases faster than supply can respond B.
Taxes are cut with no effect C.
SRAS shifts right D.
Exports fall only
Question 5
What is meant by cost-push inflation?
A.
2% CPI with ±1% tolerance band. B.
AD rises faster than SRAS can respond. C.
Rising costs shift SRAS left. D.
Main UK inflation measure (ONS shopping basket).
Question 6
What is meant by shoe-leather costs?
A.
Time/resources spent reducing money holdings. B.
Inflation rate falling but still positive. C.
Short-run inverse relationship between inflation and unemployment. D.
Sustained fall in the general price level.
Question 7
CPI measures:
A.
Only wages B.
Changes in a basket of consumer prices C.
Only import prices D.
Only house prices
Question 8
The Phillips curve suggests:
A.
MPC equals zero B.
BoP must balance monthly C.
Lower unemployment may mean higher inflation in the SR D.
GDP always equals potential
Question 9
What is meant by demand-pull inflation?
A.
Rising costs shift SRAS left. B.
Sustained rise in the general price level. C.
Sustained fall in the general price level. D.
AD rises faster than SRAS can respond.
Question 10
Cost-push inflation is shown by:
A.
SRAS shifting left B.
PPF shifting in C.
AD shifting right only D.
LRAS shifting right
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