Inflation Trivia Quiz Questions
What is inflation?
A: In economics, inflation refers to a general increase in prices of goods
and services in an economy.
The term inflation appeared in America in the mid-nineteenth century, "not
in reference to something that happens to prices, but as something that
happens to what?
A: Paper currency".
Historically, when commodity money was used, periods of inflation and
deflation would alternate depending on what?
A: The condition of the economy.
However, when large, prolonged infusions of gold or silver into an economy
occurred, this could lead to what?
A: Long periods of inflation.
The adoption of fiat currency by many countries, from the 18th century
onwards, made much larger “what” in the supply of money possible?
A: Variations.
Rapid increases in the money supply have taken place a number of times in
countries experiencing what?
A: Political crises, producing hyperinflations—episodes of extreme inflation
rates much higher than those observed in earlier periods of commodity money.
Currently, the hyperinflation in Venezuela is the highest in the world, with
an annual inflation rate of 833,997% as of when?
A: October 2018.
Since the 1980s, inflation has been held low and stable in countries with
what?
A: Independent central banks.
To increase the number of silver coins in circulation while short on silver,
the Roman imperial government repeatedly did what?
A: Debased the coins.
They melted relatively pure silver coins and then struck new silver coins
that were what?
A: Lower purity but of nominally equal value.
Silver coins were relatively pure before Nero (AD 54-68), but by the 270s
had what?
A: Hardly any silver left.
The Song Dynasty China introduced the practice of what?
A: Printing paper money to create fiat currency.
During the Mongol Yuan Dynasty, the government spent a great deal of money
fighting costly wars, and reacted by doing what?
A: Printing more money, leading to inflation.
Fearing the inflation that plagued the Yuan dynasty, the Ming Dynasty
initially rejected the use of paper money, and reverted to using what?
A: Copper coins.
From the second half of the 15th century to the first half of the 17th,
Western Europe experienced a major inflationary cycle referred to as what?
A: The "price revolution", with prices on average rising perhaps sixfold
over 150 years.
This is often attributed to the influx of gold and silver from where?
A: From the New World into Habsburg Spain, causing widespread inflation.
What do monetarists believe the most significant factor influencing
inflation or deflation is?
A: How fast the money supply grows or shrinks.
They consider fiscal policy, or government spending and taxation, as what?
A: Ineffective in controlling inflation.
What did the monetarist economist Milton Friedman famously state?
A: "Inflation is always and everywhere a monetary phenomenon."
Keynesian economics proposes that changes in the money supply do not
directly affect prices in the short run, and that visible inflation is the
result of what?
A: Demand pressures in the economy expressing themselves in prices.