Printed Page 144(cont.)

Tackle the Test: Multiple-Choice Questions

  1. Question

    Which of the following is true regarding prices in an economy?



    1. An increase in the price level is called inflation.



    2. The level of prices doesn’t matter.



    3. The rate of change in prices matters.



    		A.
    		B.
    		C.
    		D.
    		E.
    Which of the following is true regarding prices in an economy?

  2. Question

    If your nominal wage doubles at the same time as prices double, your real wage will

    		A.
    		B.
    		C.
    		D.
    		E.
    If your nominal wage doubles at the same time as prices double, your real wage will

  3. Question

    If inflation causes people to frequently convert their dollars into other assets, the economy experiences what type of cost?

    		A.
    		B.
    		C.
    		D.
    		E.
    If inflation causes people to frequently convert their dollars into other assets, the economy experiences what type of cost?

  4. Question

    Because dollars are used as the basis for contracts, inflation leads to which type of cost?

    		A.
    		B.
    		C.
    		D.
    		E.
    Because dollars are used as the basis for contracts, inflation leads to which type of cost?

  5. Question

    Changing the listed price when inflation leads to a price increase is an example of which type of cost?

    		A.
    		B.
    		C.
    		D.
    		E.
    Changing the listed price when inflation leads to a price increase is an example of which type of cost?
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