Explore Exams
Login Signup
Sign in Open App
B Com Exam  >  B Com Test  >  Macro Economics  >  Test: Theory of Inflation- 2 - B Com MCQ

Theory of Inflation- 2 - Free MCQ Practice Test with solutions, B Com Macro


MCQ Practice Test & Solutions: Test: Theory of Inflation- 2 (10 Questions)

You can prepare effectively for B Com Macro Economics with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Test: Theory of Inflation- 2". These 10 questions have been designed by the experts with the latest curriculum of B Com 2026, to help you master the concept.

Test Highlights:

  • - Format: Multiple Choice Questions (MCQ)
  • - Duration: 10 minutes
  • - Number of Questions: 10

Sign up on EduRev for free to attempt this test and track your preparation progress.

Test: Theory of Inflation- 2 - Question 1
Save

What is the primary factor that influenced the breakdown of the Phillips Curve trade-off?

Detailed Solution: Question 1

The breakdown of the Phillips Curve trade-off was influenced by the fact that inflation expectations were not stable, causing shifts in the relationship between unemployment and inflation.

Test: Theory of Inflation- 2 - Question 2
Save

What does the Phillips curve show the relationship between?

Detailed Solution: Question 2

The Phillips curve depicts the relationship between inflation and unemployment, highlighting how changes in the level of unemployment can affect the rate of price inflation.

Clear all your doubts with EduRev
Test: Theory of Inflation- 2 - Question 3
Save

According to the new-Classical view, what determines the impact of inflation on wage bargaining?

Detailed Solution: Question 3

In the new-Classical view, the impact of inflation on wage bargaining depends on inflation expectations. If workers expect higher inflation, they will negotiate for higher wage increases to compensate for it.

Test: Theory of Inflation- 2 - Question 4
Save

What was the consensus about managing the trade cycle after 1945?

Detailed Solution: Question 4

The consensus after 1945 was that policy makers should use fiscal policy to manage the trade cycle by stimulating aggregate demand during recessions and constraining it during inflation.

Test: Theory of Inflation- 2 - Question 5
Save

What is NAIRU?

Detailed Solution: Question 5

NAIRU stands for Non-Accelerating Inflation Rate of Unemployment, which is the rate of unemployment at which inflation stabilizes, indicating a level where prices rise at a consistent rate over time.

Test: Theory of Inflation- 2 - Question 6
Save

Which factor is NOT a cause of the inflationary episode after 2016, as mentioned in the text?

Detailed Solution: Question 6

The text states that the inflationary episode after 2016 was more associated with the post-Brexit fall in sterling, causing cost-push inflation, rather than supply-side policies.

Test: Theory of Inflation- 2 - Question 7
Save

According to the Phillips Curve, what is the impact of an increase in demand for labor due to government spending?

Detailed Solution: Question 7

According to the Phillips Curve, an increase in the demand for labor due to government spending leads to a decrease in unemployment, as firms compete for fewer workers, driving wages up.

Test: Theory of Inflation- 2 - Question 8
Save

Why did the Phillips Curve trade-off break down by the mid-1970s?

Detailed Solution: Question 8

The Phillips Curve trade-off broke down as inflation expectations became unpredictable, challenging the stable relationship between unemployment and inflation.

Test: Theory of Inflation- 2 - Question 9
Save

What does NAIRU stand for?

Detailed Solution: Question 9

NAIRU stands for Non-Accelerating Inflation Rate of Unemployment, indicating the rate of unemployment at which inflation stabilizes.

Test: Theory of Inflation- 2 - Question 10
Save

What is the main focus of the new microeconomics approach?

Detailed Solution: Question 10

The main focus of the new microeconomics approach is market clearing equilibria, where economic agents base their actions on expectations and market prices adjust to clear markets.

59 videos|89 docs|29 tests
Join Course
Information about Test: Theory of Inflation- 2 Page
In this test you can find the Exam questions for Test: Theory of Inflation- 2 solved & explained in the simplest way possible. Besides giving Questions and answers for Test: Theory of Inflation- 2, EduRev gives you an ample number of Online tests for practice
59 videos|89 docs|29 tests
Join Course
Download as PDF

About this B Com Practice Test

This test contains 10 MCQs on Theory of Inflation- 2 with detailed solutions for each question. It is part of the Macro Economics course on EduRev, designed to align with the current B Com syllabus. Each solution explains not just the correct answer but also gives you an understanding of the topic — not just to attempt the question but also help you prepare for the exam with practice.

Explore more B Com Study Resources

If you found this Theory of Inflation- 2 MCQ Test helpful, you can further enhance your B Com preparation with in-depth courses on EduRev, for all the subjects and topics available in Macro Economics course. The course offers:
  • Video Lectures: covering all the topics of Macro Economics
  • Notes for Revision: offering revision notes, important questions, summaries, flashcards, cheatsheets & more for B Com preparation
  • MCQ Test: variety of questions as per the pattern of B Com exam
Signup to see your scores go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup