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CPI and Inflation

CPI and Inflation

Assessment

Presentation

Social Studies

12th Grade

Medium

Created by

Jesus Reyna

Used 9+ times

FREE Resource

13 Slides • 12 Questions

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Multiple Choice

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The year in which the index begins is known as:

1

face year

2

trace year

3

base year

4

index value

15

Multiple Choice

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The prices index for different commodities are always added together and divided by two.

1

True

2

False

3

Sometimes

4

All of the time

16

Multiple Choice

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In order to measure the rate of inflation, it is necessary to measure the rate at which prices:

1

differ

2

increase

3

decrease

4

change

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Multiple Choice

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The index number deals with the ________changes of a number of different goods and services.

1

percentage

2

average

3

price

4

ratio

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Multiple Choice

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Inflation takes place when prices, on average:

1

fall

2

fluctuate

3

remain the same

4

rise

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Multiple Choice

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Inflation may also be described as a situation where the value of money is:

1

falling

2

fluctuating

3

increasing

4

remain the same

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Multiple Choice

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These are all effects of inflation EXCEPT:

1

Borrowers gain at the expense of lender

2

Inflation and the money supply

3

It affects the distribution of income

4

It affects the balance of payment

21

Multiple Choice

The rate of inflation is most commonly measured by use of

1

a price deflator

2

the GDP deflator

3

the consumer price index

4

all of the above

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Multiple Choice

The consumer price index measures 

1

the cost of buying a fixed basket of goods and services, and calculating how this cost changes from year to year

2

the cost of buying a basket of goods and services, which changes from year to year depending on the price level

3

the cost of buying a basket of goods and services, which changes from year to year depending on consumer tastes and preferences

4

all of the above, depending on what the CPI is trying to measure

23

Multiple Choice

Cost of time and effort that people spend trying to counter-act the effects of inflation, such as holding less cash and having to make additional trips to the bank. This statement reflects the __________

1

menu cost

2

inflationary cost

3

bank runs cost

4

shoe-leather cost

24

Multiple Choice

From the perspective of lenders and borrowers, unanticipated inflation can be good/bad on any side.

1

True

2

False

25

Multiple Choice

Should central banks be concerned about low inflation rates or even deflation (negative rates of inflation?)

1

Yes, because it can be harmful to the economy

2

No, it reduces price level and increases the purchasing power of the people

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