Question 1

Inflation causes the purchasing power of money to increase

Accepted Answer

false

Question 2

Demand-pull inflation happens when there is too much demand for too few goods

Accepted Answer

true

Question 3

Cost-push inflation is caused by firms passing higher production costs to consumers

Accepted Answer

true

Question 4

The Consumer Price Index (CPI) tracks price changes for a fixed basket of goods

Accepted Answer

true

Question 5

Built-in inflation is often called a wage-price spiral

Accepted Answer

true

Question 6

Economic policy refers to government strategies like taxes and interest rates

Accepted Answer

true

Question 7

The business cycle only consists of periods of growth

Accepted Answer

false

Question 8

Fiscal policy is managed by the Central Bank

Accepted Answer

false

Question 9

Monetary policy involves managing the money supply and interest rates

Accepted Answer

true

Question 10

Commercial policy handles regulations on international trade

Accepted Answer

true

Question 11

Tariffs and quotas are tools used in Fiscal Policy

Accepted Answer

false

Question 12

The Ministry of Finance runs Fiscal Policy

Accepted Answer

true

Question 13

Expansion is a period of contraction in the business cycle

Accepted Answer

false

Question 14

Inflation is measured as the percentage change in CPI

Accepted Answer

true

Question 15

Central banks aim for stable prices through monetary policy

Accepted Answer

true

Question 16

Commercial policy is run by the Ministry of External Trade

Accepted Answer

true

Question 17

Taxation is a primary tool of Monetary Policy

Accepted Answer

false

Question 18

Inflation is a sustained decrease in the general price level

Accepted Answer

false

Question 19

A recession is a period of contraction in economic activity

Accepted Answer

true

Question 20

Subsidies for exports are part of Commercial Policy

Accepted Answer

true

Economics 4