Inflation Quiz

Ten Inflation practice questions cover calculations and concepts. Every answer is explained.

Free, with no sign-up.

For High school students and adults reviewing the topic.

About 14 minutes. 10 questions.

How does it work?

Choose one answer or enter a number in the stated unit, then check it.
Round only the final answer to the precision requested.

What will you get?

Review a score and an explanation for every answer.

Question 1A price index rises from 150 to 159 over a year. Find the inflation rate in percent, rounded to two decimals.

Enter a number in %.

Answers within 0.005 % of the expected value are accepted.

Question 2An unchanged basket costs $72 in the base period and $81 now. Set the base index to 100. Find the current index as a number with no unit, rounded to two decimals.

Enter a number.

Answers within 0.005 of the expected value are accepted.

Question 3Prices rise by 8%. Find the purchasing power of $864 after the rise, expressed in earlier-price dollars and rounded to two decimals.

Enter a number in dollars.

Answers within 0.005 dollars of the expected value are accepted.

Question 4Nominal pay rises 9% while prices rise 4%. Find the exact real wage change, in percent rounded to two decimals.

Enter a number in %.

Answers within 0.005 % of the expected value are accepted.

Question 5A region’s production capacity is disrupted while buyers’ spending plans stay unchanged. What initial inflationary force is present?

Higher productivity reducing the resources required per unitA statistical rebasing that creates additional physical outputFaster demand growth from an increase in buyers’ budgetsReduced supply putting upward pressure on costs and prices

Question 6Households with different spending patterns face the same published inflation rate. Why can their experiences differ?

The household with fewer purchases faces no price changesThe expenditure mix changes the weight given to rising costsThe index forces retailers to charge one price for each productThe published figure specifies an identical bill for each household

Question 7Inflation falls while remaining positive. What does that say about the general price level?

It is declining as the pace of increase slowsIt is rising more slowly than beforeIt has stopped changing until inflation rises againIt has returned to its earlier absolute level

Question 8A fixed money debt was agreed before unexpectedly high inflation. Which effect differs from what the lender anticipated?

The nominal amount owed falls with the price indexThe debt contract converts automatically into sharesThe promised repayments purchase fewer goodsThe lender receives an extra payment equal to the inflation surprise

Question 9Why might a central bank raise its policy rate during persistent inflation?

To restrain spending through tighter financial conditionsTo encourage consumers to borrow more expensivelyTo manufacture the inputs whose supply has been disruptedTo set the price printed on each retail product

Question 10An analyst separates core inflation from a headline measure. What is the purpose of that distinction?

To examine underlying price movements with volatile components excludedTo measure changes in employment rather than in pricesTo report the statistical agency’s own borrowing costsTo redefine the excluded purchases as costless

Answer every question to see and share your score.

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