Rate of Inflation

Q.

What is the rate of inflation for the year 2018 if the CPIs for the years 2017 and 2018 are 300 and 305 respectively?

1. 1.67

2. 1.70

3. 1.77

4. 1.57

Q.

What is the rate of inflation for the year 2014 if the CPIs for the years 2013 and 2014 are 123 and 157 respectively?

1. 19.87

2. 13.43

3. 27.64

4. 23.06

Q.

What is the rate of inflation for the year 2000 if the CPIs for the years 1999 and 2000 are 54 and 59 respectively?

1. 8.47

2. 5.60

3. 9.26

4. 4.49

Q.

The reasons for deflation in Japan for almost 2 decades beginning early 1990s could be attributed to______.

1. Unfavourable demographics

2. Tight monetary policy

3. Increasing asset prices

4. All of the above

Q.

Suppose the wage of an industrial worker follows a path given by S $=x^2$ and inflation rate during the same time is given by $I=e^x$ where x is the time in months. What can you say about his standard of living provided all other factors remain constant? Give reasons behind your observations.

1. His standard of living will improve with the increase in real wage

2. His standard of living will remain the same with no change in his real wage

3. His standard of living will deteriorate with decrease in real wage

4. It cannot be determined

Q.

(I) A rising price index implies a growing level of economic activity.

(II) Simple index number can be constructed only by the simple aggregative method.

1. True, True

2. False, False

3. True, False

4. False, True

Q. When there is a high inflation, the central bank of a country will_____ headline rate in general.

1. Cut
2. Hike
3. Keep unchanged
4. None

Q.

A producer price index could measure changes in_____.

1. Price of goods and services as they leave the place of production

2. Price of goods and services as they enter the production process

3. Wholesale prices

4. Retail prices

Q.

The inflation rate of a country follows a certain trend given by $I=I_X+I_{X-1}+I_{X-2}$ where $\left[I_X\right]=0,\left[I_{X-1}\right]=1$ and $\left[I_{X-2}\right]=2$, [ ] represents greatest integer function. Find the range of the inflation rate.

1. [0, 3)

2. [1, 3]

3. Cannot be determined

4. [3, 6)

Q. When there is high inflation, the central bank of a country will headline rate in general.

1. cut
2. hike
3. keep unchanged
4. depend on last year