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Inflation & Productivity – MCQs
24 questions. Click to practice.
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Correct options are highlighted when revealed.
1.
If your income increases from Rs19,000 to Rs31,000 while the Consumer Price Index (CPI) rises from 122 to 169, how has your standard of living most likely changed?
Decreased
It is unclear without information about the base year
Improved
Remained unchanged
2.
When the price of apples rises, leading consumers to buy fewer apples and switch to more oranges, which type of bias affects the Consumer Price Index (CPI)?
No bias applies
Substitution bias
Bias related to the base year
Bias from unaccounted quality changes
Bias caused by new products entering the market
3.
Which scenario is most likely to cause the Consumer Price Index (CPI) in Pakistan to increase more than the GDP deflator?
A rise in the cost of BMW cars manufactured in Germany and imported into Pakistan
An escalation in the price of Peugeots produced within Pakistan
An increase in the price of helicopters bought by the Pakistan Navy
A hike in the price of locally made armored vehicles sold solely to Iran
A surge in the price of agricultural products grown domestically
4.
Which of the following is NOT a method used to measure inflation?
All the listed options are utilized to measure inflation.
Consumer Price Index (CPI)
Producer Price Index (PPI)
GDP Deflator
Finished Goods Price Index
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