Question 1

What is defined as a sustained increase in the general price level of goods and services?

Accepted Answer

inflation

Question 2

Inflation reduces the (...) of money

Accepted Answer

purchasing power

Question 3

Which type of inflation occurs when aggregate demand exceeds supply during economic booms?

Accepted Answer

demand-pull inflation

Question 4

Cost-push inflation arises from rising production costs such as:

Accepted Answer

rising wages or raw materials

Question 5

A "wage-price spiral" is associated with which type of inflation?

Accepted Answer

built-in

Question 6

The tool used to track average price changes for a fixed basket of common goods is the:

Accepted Answer

consumer price index (CPI)

Question 7

What is the formula for the annual inflation rate?

Accepted Answer

(new CPI - prior CPI) / prior CPI x 100

Question 8

Government actions and strategies to influence the economy are known as:

Accepted Answer

economic policy

Question 9

The alternating periods of expansion and contraction in economic activity is called the:

Accepted Answer

business (economic) cycle

Question 10

Fiscal policy involves the government's use of:

Accepted Answer

taxation and spending

Question 11

Which entity is responsible for running Fiscal Policy?

Accepted Answer

ministry of finance

Question 12

Monetary policy is managed by the:

Accepted Answer

central

Question 13

The main tools of Monetary Policy include managing:

Accepted Answer

money supply and interest rates

Question 14

Commercial policy governs:

Accepted Answer

international trade (imports/exports)

Question 15

Which of the following is a tool of Commercial Policy?

Accepted Answer

tariffs and quotas

Question 16

The goal of Monetary Policy is to achieve:

Accepted Answer

stable prices and economic growth

Question 17

Which policy is run by the Ministry of External Trade?

Accepted Answer

commercial policy

Question 18

During a recession, the economy is in a period of:

Accepted Answer

contraction

Question 19

If the CPI moves from 200 to 210, what is the inflation rate?

Accepted Answer

5%

Question 20

Which type of inflation involves workers demanding higher pay to match living costs?

Accepted Answer

built-in

Economics 3