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GRADE 10 Inflation

This document contains 10 multiple choice questions about inflation and macroeconomic concepts like aggregate demand, aggregate supply, the Phillips curve, and the relationship between inflation, unemployment, wages, and currency valuation. The questions cover topics like the causes of demand-pull inflation, the effects of inflation on standards of living and purchasing power, how shifts in aggregate demand and supply can lead to different types of inflation, and factors that can offset the effects of inflation on price competitiveness.

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Babu Balaraman
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96 views3 pages

GRADE 10 Inflation

This document contains 10 multiple choice questions about inflation and macroeconomic concepts like aggregate demand, aggregate supply, the Phillips curve, and the relationship between inflation, unemployment, wages, and currency valuation. The questions cover topics like the causes of demand-pull inflation, the effects of inflation on standards of living and purchasing power, how shifts in aggregate demand and supply can lead to different types of inflation, and factors that can offset the effects of inflation on price competitiveness.

Uploaded by

Babu Balaraman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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GRADE -10 inflation

Question 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


Question 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 pound


Question 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


Question 4

An increase in aggregate demand is more likely to lead to demand-pull inflation if:

a) Aggregate supply is perfectly elastic


b) Aggregate supply is perfectly inelastic
c) Aggregate supply is unit elastic

d) Aggregate supply is relatively elastic


Question 5

An increase in costs will:

a) Shift aggregate demand


b) Shift aggregate supply
c) Reduce the natural rate of unemployment

d) Increase the productivity of employees


Question 6

The effects of inflation on the price competitiveness of a country's products may be offset by:

a) An appreciation of the currency


b) A revaluation of the currency
c) A depreciation of the currency

d) Lower inflation abroad


Question 7

Menu costs in relation to inflation refer to:

a) Costs of finding better rates of return


b) Costs of altering price lists
c) Costs of money increasing its value

d) Costs of revaluing the currency


Question 8

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


Question 9

In the short run unemployment may fall below the natural rate of unemployment if:

a) Nominal wages have risen less than inflation


b) Nominal wages have risen at the same rate as inflation
c) Nominal wages have risen more than inflation

d) Nominal wages have risen less than unemployment


Question 10

The Phillips curve shows the relationship between inflation and what?

a) The balance of trade


b) The rate of growth in an economy
c) The rate of price increases

d) Unemployment

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