Question 1

During World War II, the government imposed legal controls on prices. As a result there was

Accepted Answer

A)   no inflation at all.
B)   repressed inflation.
C)   stagflation.
D)   demand-pull inflation.

Question 2

The Keynesian explanation of inflation is that it is caused by

Accepted Answer

A)   aggregate demand rising faster than aggregate supply.
B)   aggregate supply rising faster than aggregate demand.
C)   an expansion of the money supply.
D)   rising costs of production during a time of deficient aggregate demand.

Question 3

Which group of people is likely to be the most concerned about inflation?

Accepted Answer

A)   Individuals whose wages are indexed to the rate of inflation.
B)   Businesses selling goods that are relatively price inelastic.
C)   Retirees on a fixed income.
D)   Corporations with a significant degree of monopoly power.

Question 4

The annual rate of inflation is typically measured by

Accepted Answer

A)   a percentage increase in the price of gasoline and other basic commodities.
B)   the difference in the Consumer Price Index from one year to the next.
C)   the percentage change in the Consumer Price Index.
D)   the increase in the real GDP.

Question 5

The phenomenon of inflation during recessions

Accepted Answer

A)   is explained by progressive economists as "demand-pull" inflation.
B)   does not occur.
C)   is explained by conservative economists as "cost-push" inflation.
D)   is caused by wage and price controls.

Question 6

A prominent conservative view of inflation is that it is caused by

Accepted Answer

A)   high input costs, included high wages and salaries.
B)   a deficiency of aggregate demand.
C)   productivity rising faster than wages.
D)   excess aggregate demand. A

Question 7

Keynesian theory predicts that inflation

Accepted Answer

A)   will rise during expansions and rise during recessions.
B)   will fall during expansions and rise during recessions.
C)   will fall during expansions and fall during recessions.
D)   will rise during expansions and fall during recessions.

Question 8

The term, "stagflation," refers to

Accepted Answer

A)   inflation accompanied by low unemployment.
B)   inflation at a time of excess aggregate demand.
C)   inflation accompanied by high unemployment.
D)   inflation caused by an expansion of the money supply.

Question 9

Inflation that is driven by the rising cost of inputs including wages and salaries is called

Accepted Answer

A)   demand-pull inflation.
B)   cost push inflation.
C)   stagflation.
D)   profit push inflation. B

Question 10

In World War II, government spending for the war

Accepted Answer

A)   was approximately 4% of GDP.
B)   was financed entirely by increased taxes.
C)   was approximately 40% of GDP.
D)   was financed entirely from the surplus accumulated during the Great Depression.

Question 11

The U.S. government implemented wage and price controls during World War II because

Accepted Answer

A)   there was a significant increase in the production of consumer goods.
B)   there was a significant reduction in the production of consumer goods.
C)   there was a major increase in demand by government for consumer goods.
D)   consumer goods manufacturers were worried about falling prices of consumer goods. B

Exam 14: Inflation

During World War II, the government imposed legal controls on prices. As a result there was

Correct Answer
verified

The Keynesian explanation of inflation is that it is caused by

Correct Answer
verified

Which group of people is likely to be the most concerned about inflation?

Correct Answer
verified

The annual rate of inflation is typically measured by

Correct Answer
verified

The phenomenon of inflation during recessions

Correct Answer
verified

A prominent conservative view of inflation is that it is caused by

Correct Answer
verified
A

Keynesian theory predicts that inflation

Correct Answer
verified

The term, "stagflation," refers to

Correct Answer
verified

Inflation that is driven by the rising cost of inputs including wages and salaries is called

Correct Answer
verified
B

In World War II, government spending for the war

Correct Answer
verified

The U.S. government implemented wage and price controls during World War II because

Correct Answer
verified
B

Exam 14: Inflation

During World War II, the government imposed legal controls on prices. As a result there was

Correct AnswerverifiedShow Answer

The Keynesian explanation of inflation is that it is caused by

Correct AnswerverifiedShow Answer

Which group of people is likely to be the most concerned about inflation?

Correct AnswerverifiedShow Answer

The annual rate of inflation is typically measured by

Correct AnswerverifiedShow Answer

The phenomenon of inflation during recessions

Correct AnswerverifiedShow Answer

A prominent conservative view of inflation is that it is caused by

Correct AnswerverifiedA

Keynesian theory predicts that inflation

Correct AnswerverifiedShow Answer

The term, "stagflation," refers to

Correct AnswerverifiedShow Answer

Inflation that is driven by the rising cost of inputs including wages and salaries is called

Correct AnswerverifiedB

In World War II, government spending for the war

Correct AnswerverifiedShow Answer

The U.S. government implemented wage and price controls during World War II because

Correct AnswerverifiedB

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Correct Answer
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A

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B

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B