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B Com Exam  >  B Com Tests  >  Macro Economics  >  Test: Introduction & Causes of Inflation - B Com MCQ

Test: Introduction & Causes of Inflation - B Com MCQ


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10 Questions MCQ Test Macro Economics - Test: Introduction & Causes of Inflation

Test: Introduction & Causes of Inflation for B Com 2024 is part of Macro Economics preparation. The Test: Introduction & Causes of Inflation questions and answers have been prepared according to the B Com exam syllabus.The Test: Introduction & Causes of Inflation MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Introduction & Causes of Inflation below.
Solutions of Test: Introduction & Causes of Inflation questions in English are available as part of our Macro Economics for B Com & Test: Introduction & Causes of Inflation solutions in Hindi for Macro Economics course. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free. Attempt Test: Introduction & Causes of Inflation | 10 questions in 10 minutes | Mock test for B Com preparation | Free important questions MCQ to study Macro Economics for B Com Exam | Download free PDF with solutions
Test: Introduction & Causes of Inflation - Question 1
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What is inflation often defined in terms of?

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Inflation is often defined in terms of its supposed causes. One such cause is when the money supply exceeds the available goods and services in the economy. This excessive money supply can lead to a rise in the general level of prices.
Test: Introduction & Causes of Inflation - Question 2
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What does a sustained upward trend in the general level of prices constitute?

Detailed Solution for Test: Introduction & Causes of Inflation - Question 2
A sustained upward trend in the general level of prices constitutes inflation. It means that over time, prices of goods and services are consistently rising, leading to a decrease in the purchasing power of money.
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Test: Introduction & Causes of Inflation - Question 3
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What is the opposite of inflation?

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The opposite of inflation is deflation. Deflation is a state of falling prices, where the value of money increases, resulting in an increase in the purchasing power of money.
Test: Introduction & Causes of Inflation - Question 4
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How is inflation defined according to G. Ackley?
Detailed Solution for Test: Introduction & Causes of Inflation - Question 4
G. Ackley defines inflation as 'a persistent and appreciable rise in the general level or average of prices'. This means that inflation is characterized by an overall increase in the prices of goods and services, rather than just a few specific items.
Test: Introduction & Causes of Inflation - Question 5
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What is the key factor that causes demand-pull inflation?
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Demand-pull inflation is caused by an increase in aggregate demand exceeding the available output. This increase in aggregate demand can come from factors like increased consumer spending, investment, government expenditure, or net exports.
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What is cost-push inflation primarily caused by?
Detailed Solution for Test: Introduction & Causes of Inflation - Question 6
Cost-push inflation is primarily caused by an increase in the cost of production. This could result from factors like higher prices of raw materials, increased wages, or other production-related expenses.
Test: Introduction & Causes of Inflation - Question 7
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Which type of inflation is associated with too much money chasing too few goods?
Detailed Solution for Test: Introduction & Causes of Inflation - Question 7
Demand-pull inflation is associated with "too much money chasing too few goods." It occurs when aggregate demand exceeds the available output, leading to an upward pressure on prices.
Test: Introduction & Causes of Inflation - Question 8
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What is the main difference between creeping inflation and galloping inflation?
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The main difference between creeping inflation and galloping inflation is the intensity of the price rise. Creeping inflation is characterized by a slow and small rise in prices, often within the range of 2% to 3%, while galloping inflation involves a rapid and extreme rise, often in double or triple digits.
Test: Introduction & Causes of Inflation - Question 9
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Which type of inflation can be caused by a rise in the prices of raw materials and wages?
Detailed Solution for Test: Introduction & Causes of Inflation - Question 9
Cost-push inflation can be caused by factors like a rise in the prices of raw materials or an increase in wages. These factors lead to an increase in the cost of production, which is then passed on to consumers in the form of higher prices.
Test: Introduction & Causes of Inflation - Question 10
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What is the primary factor that causes galloping inflation?
Detailed Solution for Test: Introduction & Causes of Inflation - Question 10
Galloping inflation, which involves an extreme rise in prices, is primarily caused by excessive money supply in the economy. When the supply of money exceeds the available goods and services, it can lead to rapid and excessive price increases.
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