Y10 4.31 Chapter 31 Inflation and deflation

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What is Inflation?

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Inflation is an increase in the general level of prices.

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When inflation is high the _______________ of the dollar decreases

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purchasing power

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With inflation, AD > AS

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True

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Demand-Pull inflation can be described as too many _________ chasing too few __________

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dollars, goods

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What causes Cost-Push inflation?

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A rise in production costs passed on to consumers

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What is the definition of deflation?

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decrease in the average price of goods and services

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After Haiti's earthquake destroyed much of the productive capital in the nation, it also experienced massive inflation. This inflation was likely

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Cost-push

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Who is most likely to be hurt by inflation? Options: someone who borrowed money, a retiree on a fixed income, The US Government

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a retiree on a fixed income

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A person who borrows a 30 year fixed rate mortgage is likely to benefit from inflation. True or False?

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True

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During a recession, inflation is likely to be..

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Low