Economic Rollercoaster: Inflation vs Deflation Quiz

Test your knowledge on the concepts of inflation and deflation with this exciting quiz consisting of 11 questions.

published on August 23
1/11

What is inflation?

What is inflation?
A decrease in the general price level
An increase in the general price level
Stagnation of the economy
Fluctuations in exchange rates
2/11

Which of the following is a cause of inflation?

Which of the following is a cause of inflation?
Excessive money supply
Unemployment
Low consumer demand
Globalization
3/11

What is deflation?

What is deflation?
A decrease in the general price level
An increase in the general price level
Rising wages
Increased consumer spending
4/11

Which of the following is a characteristic of deflation?

Which of the following is a characteristic of deflation?
Consumer spending decreases
Rising prices
Increased borrowing
Expansion of the money supply
5/11

What effect does inflation have on borrowers?

What effect does inflation have on borrowers?
Increases the real value of debt
Reduces the real value of debt
Has no impact on debt
Increases interest rates
6/11

During deflation, what happens to asset prices?

They tend to decrease
They remain stable
They increase
They become more volatile
7/11

What is hyperinflation?

Extreme and uncontrollable inflation
A gradual increase in prices
A stable price level
A decrease in prices
8/11

Which country experienced hyperinflation in the 20th century?

Which country experienced hyperinflation in the 20th century?
Zimbabwe
Switzerland
Japan
Germany
9/11

How does deflation impact economic growth?

How does deflation impact economic growth?
It can lead to a recession
It stimulates investment
It boosts consumer spending
It reduces unemployment
10/11

What is stagflation?

What is stagflation?
A combination of inflation and stagnation
Deflation and economic growth
Hyperinflation
Price stability
11/11

Which of the following can help combat inflation?

Which of the following can help combat inflation?
Tightening monetary policy
Increasing government spending
Lowering interest rates
Expanding the money supply