Organizational Culture

Question 1

The annual rate of inflation went up from 2% to 3%, this means:

• Selected:a. The real value of the money has decreased.This answer is correct.
• b. The price level has fallen.
• c. The exchange rate of the local currency has increase.
• d. The cost of living has decreased

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Question 2

Under a full-employment level, a demand-pull inflation can turn into a cost-push inflation, when : 

• a. Increases in aggregate supply results to lower unemployment rate.
• b. increases in aggregate demand results bigger market opportunity for sellers.
• c. increases in aggregate supply results to higher prices.
• Selected:d. increases in aggregate demand results to a stress on resources for production.This answer is correct.

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Question 3

Inflation causes Real GDP to decrease because:

• a. it makes everyone poorer
• b. it decreases savings in financial form
• Selected:c. it increases the cost of investmentThis answer is correct.
• d. it reduces the value of money loaned.

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Question 4

Which of the following is true about a period of inflation?

• a. Prices of all goods & services are rising and falling.
• Selected:b. The general price is rising.This answer is correct.
• c. All prices are rising.
• d. All of the above.

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Question 5

Demand-pull inflation is an inflation that results from an initial:

• Selected:a. increase in aggregate demandThis answer is correct.
• b. increase in wage rates
• c. increase in natural resource prices
• d. decrease in aggregate demand
  

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Question 6

If economic growth causes the long-run aggregate supply curve to shift rightward over time, but the aggregate demand curve does not change, we expect:

• a. equilibrium price to rise resulting to an inflation.
• b. equilibrium price to decline, resulting to deflation
• Selected:c. equilibrium price to rise.This answer is correct.
• d. equilibrium price to decline.

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Question 7

Assuming that the economy is at a near-full employment level, which of the follwing could cause a rise in the price level:

• a. An increase in import.
• Selected:b. A decrease in the interest rates.This answer is correct.
• c. An increase in the productivity of workers.
• d. A decrease in the price of energy.

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Question 8

Assuming that CPI for January 2017 is 146, this mean:

• a. Prices have risen by 146% from the base year.
• Selected:b. The average price of goods and services is 146 in January 2017This answer is correct.
• c. The average price of goods and services has risen to 146 in January 2017
• d. The data provided can not ascertain what happened.

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Question 9

The Consumer Price Index:

• a. Measures the level output in the economy over a year
• b. Measures the increase in wholesale prices since a base year
• Selected:c. Measures the rate of price changes over a given periodThis answer is correct.
• d. Measures then difference between nominal and real GDP

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Question 10

An increase in the price level:

• a. decreases an individual's purchases due to a increase in the real value money.
• b. increases an individual's purchases because the real value of money increase
• Selected:c. decreases an individual's purchases due to a decrease in the real value money.This answer is correct.
• d. increases an individual's purchases because it does not affect the real value money.

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Question 11

Which of the following is not a cause of inflation?

• a. Too much aggregate demand.
• Selected:b. Too much aggregate supply.This answer is correct.
• c. An increase in the average price level. 
  
• d. Too much money chasing too few goods.

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Question 12

Cost-push inflation is due to:

• a. excess total spending.
• b. too much money chasing too few goods.
• c. economy operating at full employment.
• Selected:d. resource cost increases.This answer is correct.

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Question 13

Except for one, the follwoing can result to a cost push inflation:

• a. An increase in the per kilowatt price of electricity.
• b. An increase in the exchange rate of international currency against the peso.
• Selected:c. An increase in government expenditure.This answer is correct.
• d. An increase in the price of resources.

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Question 14

Policy makers do not aim for zero % inflation because: