Inflation & Unemployment Practice 2026-VERSION WITH QUESTIONS AND ANSWERS 100% CORRECT WITH RATIONALES AND DOWNLOAD AS PDF AVAILABLE. 1. What is inflation? A. Decrease in prices B. Increase in unemployment C. Increase in general price level D

Inflation &
Unemployment
Practice 2026-VERSION
WITH QUESTIONS AND
ANSWERS 100%
CORRECT WITH
RATIONALES AND
DOWNLOAD AS PDF
AVAILABLE.

,1. What is inflation?
A. Decrease in prices
B. Increase in unemployment
C. Increase in general price level
D. Stable prices
Answer: C
Rationale: Inflation refers to a
sustained rise in the overall price level
of goods and services.
2. Unemployment is best defined as:
A. People not wanting to work
B. People actively seeking but unable
to find work
C. Retired individuals
D. Students
Answer: B

, Rationale: Unemployment includes
those willing and able to work but
cannot find jobs.
3. Which type of inflation is caused
by rising demand?
A. Cost-push
B. Demand-pull
C. Structural
D. Imported
Answer: B
Rationale: Demand-pull inflation
occurs when demand exceeds supply.
4. Cost-push inflation occurs due to:
A. Higher taxes
B. Increased wages and production
costs

, C. Lower demand
D. Government subsidies
Answer: B
Rationale: Rising input costs push
prices upward.
5. Which is a measure of inflation?
A. CPI
B. GDP
C. Unemployment rate
D. Interest rate
Answer: A
Rationale: Consumer Price Index
tracks price changes over time.
6. The unemployment rate is
calculated as:
A. Employed / labor force