Macroeconomic Policies and Inflationary Forces Quiz

Explore central bank tools, inflation types, and policies to control inflation. Test your macroeconomics knowledge with this quiz!

Practice Learn Test

Which of the following is a tool used by central banks to control inflation?

Fiscal policy

Monetary policy

Trade policy

Industrial policy

What is the term for the increase in the general price level of goods and services in an economy over a period of time?

Deflation

Stagflation

Inflation

Recession

Which of the following is an example of demand-pull inflation?

An increase in wages leads to higher production costs

An increase in government spending stimulates consumer demand

A decrease in consumer confidence causes reduced spending

A decrease in the money supply by the central bank

What is the Phillips curve relationship in macroeconomics?

Inverse relationship between inflation and unemployment

Direct relationship between inflation and unemployment

Inverse relationship between inflation and GDP

Direct relationship between inflation and GDP

What is the name of the policy aimed at reducing inflation by slowing down the growth of the money supply?

Expansionary policy

Austerity policy

Contractionary policy

Supply-side policy

Which of the following is a consequence of hyperinflation?

Increased purchasing power of the currency

Stability in the financial markets

Erosion of savings and confidence in the currency

Decreased interest rates

What is the term for a situation where inflation is accompanied by stagnant economic growth and high unemployment?

Stagflation

Hyperinflation

Deflation

Recession

Which of the following is a tool used by governments to control inflation directly?

Quantitative easing

Price controls

Open market operations

Discount rate adjustments

Which of the following is a supply-side policy aimed at reducing inflationary pressures?

Decreasing taxes

Increasing government spending

Increasing interest rates

Deregulation

#10

What is the name of the phenomenon where prices increase rapidly due to expectations of future inflation?

Cost-push inflation

Wage-price spiral

Rational expectations

Anticipated inflation

#11

What is the name of the measure used to calculate the average change in prices received by domestic producers for their output?

Consumer Price Index (CPI)

Producer Price Index (PPI)

Gross Domestic Product (GDP)

Retail Price Index (RPI)

#12

Which of the following is a policy that aims to control inflation by reducing government spending and increasing taxes?