McqMate
These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Business Administration (BBA) .
Chapters
| 1. |
Demand-pull inflation may be caused by: |
| A. | an increase in costs |
| B. | a reduction in interest rates |
| C. | a reduction in government spending |
| D. | an outward shift in aggregate supply |
| Answer» B. a reduction in interest rates | |
| 2. |
Inflation: |
| A. | always reduces the cost of living |
| B. | always reduces the standard of living |
| C. | reduces the price of products |
| D. | reduces the purchasing power of a rupee |
| Answer» D. reduces the purchasing power of a rupee | |
| 3. |
An increase in injections into the economy may lead to: |
| A. | an outward shift of aggregate demand and demand-pull inflation |
| B. | an outward shift of aggregate demand and cost-push inflation |
| C. | an outward shift of aggregate supply and demand-pull inflation |
| D. | an outward shift of aggregate supply and cost-push inflation |
| Answer» A. an outward shift of aggregate demand and demand-pull inflation | |
| 4. |
According to the Phillips curve, unemployment will return to the natural rate when: |
| A. | nominal wages are equal to expected wages |
| B. | real wages are back at long-run equilibrium level |
| C. | nominal wages are growing faster than inflation |
| D. | inflation is higher than the growth of nominal wages |
| Answer» B. real wages are back at long-run equilibrium level | |
| 5. |
What is the cause of inflation? |
| A. | if money supply increases. |
| B. | if the production rate falls. |
| C. | if money supply increases and production falls. |
| D. | both money supply and production decreases. |
| Answer» C. if money supply increases and production falls. | |
| 6. |
What does the inflation imply? |
| A. | rise in budget deficit |
| B. | rise in prices of consumer goods. |
| C. | rise in money supply. |
| D. | rise in general price index. |
| Answer» D. rise in general price index. | |
| 7. |
How the inflation can be checked temporarily? |
| A. | increase in money supply |
| B. | decrease in money supply |
| C. | increase in wages |
| D. | decrease in tax |
| Answer» B. decrease in money supply | |
| 8. |
Which groups are not protected from inflation? |
| A. | industrial worker |
| B. | agricultural farmers |
| C. | government pensioners |
| D. | saving bank account holders |
| Answer» B. agricultural farmers | |
| 9. |
Which of the following cannot be included among the remedies of inflation? |
| A. | better capacity utilization |
| B. | by making low bank rate |
| C. | by reducing budget deficit |
| D. | by making high bank rate |
| Answer» B. by making low bank rate | |
| 10. |
What is Cost-Push inflation? |
| A. | increasing money supply |
| B. | increasing indirect tax |
| C. | population increase |
| D. | expenditure increase unnecessarily. |
| Answer» B. increasing indirect tax | |
| 11. |
Inflation is the state in which .............................. |
| A. | the value of money decreases |
| B. | the value of money increases |
| C. | the value of the money increases first and then decreases |
| D. | the value of money decreases first and increases later |
| Answer» A. the value of money decreases | |
| 12. |
Which of the following class will not be negatively affected by the higher inflation? |
| A. | the consumer class |
| B. | the debtor class |
| C. | pensioner class |
| D. | business class |
| Answer» D. business class | |
| 13. |
Which of the following is an effect of inflation? |
| A. | erosion in purchasing power |
| B. | affects relative price of goods |
| C. | increase in inequalities of income |
| D. | all the above |
| Answer» D. all the above | |
| 14. |
The trough of a business cycle occurs when _____ hits its lowest point. |
| A. | inflation |
| B. | the money supply |
| C. | aggregate economic activity |
| D. | the unemployment rate |
| Answer» C. aggregate economic activity | |
| 15. |
. When aggregate economic activity is increasing, the economy is said to be in |
| A. | an expansion. |
| B. | a contraction. |
| C. | a peak. |
| D. | a turning point. |
| Answer» A. an expansion. | |
| 16. |
In a boom: |
| A. | unemployment is likely to fall |
| B. | prices are likely to fall |
| C. | demand is likely to fall |
| D. | imports are likely to fall |
| Answer» A. unemployment is likely to fall | |
| 17. |
Peaks and troughs of the business cycle are known collectively as |
| A. | volatility. |
| B. | turning points. |
| C. | equilibrium points. |
| D. | real business cycle events. |
| Answer» B. turning points. | |
| 18. |
When aggregate economic activity is declining, the economy is said to be in |
| A. | a contraction. |
| B. | an expansion. |
| C. | a trough. |
| D. | a turning point. |
| Answer» A. a contraction. | |
| 19. |
Industries that are extremely sensitive to the business cycle are the |
| A. | durable goods and service sectors. |
| B. | nondurable goods and service sectors. |
| C. | capital goods and nondurable goods sectors. |
| D. | capital goods and durable goods sectors. |
| Answer» D. capital goods and durable goods sectors. | |
| 20. |
Economists use the term shocks to mean |
| A. | unexpected government actions that affect the economy. |
| B. | typically, unpredictable forces that have major impacts on the economy. |
| C. | sudden rises in oil prices. |
| D. | the business cycles. |
| Answer» B. typically, unpredictable forces that have major impacts on the economy. | |
Done Studing? Take A Test.
Great job completing your study session! Now it's time to put your knowledge to the test. Challenge yourself, see how much you've learned, and identify areas for improvement. Don’t worry, this is all part of the journey to mastery. Ready for the next step? Take a quiz to solidify what you've just studied.