2. Macroeconomic Theory

Inflation — Quiz

Test your understanding of inflation with 5 practice questions.

Practice Questions

Question 1

Which of the following describes a situation where the general price level of goods and services is rising, and the purchasing power of currency is falling?

Question 2

If the Consumer Price Index (CPI) for the current year is $120$ and the CPI for the base year was $100$, what is the inflation rate?

Question 3

Which of the following scenarios is most likely to lead to cost-push inflation?

Question 4

Which of the following is a potential benefit of low, stable inflation for an economy?

Question 5

If the nominal interest rate is $7\%$ and the inflation rate is $4\%$ what is the real interest rate?