18 Questions
What is the impact of exports on the circular flow of income?
Add to the value of aggregate demand
How do imports affect the circular flow of income?
Reduce the value of aggregate demand
According to Crowther, how is inflation defined?
A state in which the value of money is failing
What does Coulbourn's definition imply about inflation?
Too much of money chasing too few goods
How is inflation usually measured?
Percentage rise in the price index during a specific time period
What is one economic impact of inflation?
Reducing purchasing power
Which indicator is commonly used to measure inflation?
WPI
What is an alternative indicator to measure the rate of inflation?
CPI
Inflation is primarily caused by:
Mismatch between demand and supply
Which statement best describes the nature of inflation?
Dynamic and occurring repeatedly
Inflation is considered to be a purely:
Monetary phenomenon
Which event may lead to artificial scarcity of goods that can cause inflation?
Natural calamity
What is a common cause of inflation in an economy?
Imbalance between demand and supply of money
How is inflation measured in India?
Whole Sale Price Index
What is a beneficial level of inflation for an economy?
Moderate inflation rate between 2 to 3%
How can one determine if inflation exists in an economy?
By observing a decrease in real wages and increase in prices
What is one feature of inflation according to the text?
A persistent rise in prices
How is inflation typically measured over time?
Annually
This quiz covers the concept of the rest of the world sector or foreign sector in macroeconomics, focusing on exports, imports, and their impact on aggregate demand. It also includes the components of expenditure like Consumption, Investment, Government Purchases, and Net Exports.
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