1.Inflation is most often caused by…?
a)supply side forces increase costs to producers
b)demand side forces which depress the level of consumer spending
c)rapid expansion of money supply
d)unreasonable wage demands by labour unions
Ans: c)rapid expansion of money supply
2.An increase in the growth rate of money supply is most likely to be followed by…?
a)recession
b)decline in economic activity
c)recession and decline in economic activity
d)inflation
Ans: d)inflation