Inflation

Open Ended

What do you think is the most serious downside of inflation?

Multiple Choice

Which of the following spending categories makes up the largest portion of the CPI market basket?

• travel (including gas)

• housing

• entertainment

• food

Multiple Choice

If inflation is a general rise in the price level, why have consumer electronic prices changed over time?

• The demand for electronics has decreased

• Electronics are not counted in the CPI

• Electronics are getting smaller in size, so the price is falling as well

• Technological improvements have greatly reduced production costs for these goods

Multiple Choice

In 2022, Juan takes out a 30-year bank mortgage loan at a fixed interest rate. He buys a house with the loan. From 2024 to 2028, inflation is high. Who is helped and who is hurt by this inflation, ceteris paribus?

• Juan is helped, and the bank is hurt

• The bank is helped, and Juan is hurt

• They are both hurt

• They are both helped

Multiple Choice

A kid who has been saving up for months to buy a telescope...

• Will be hurt by inflation

• Will be helped by inflation

• Will not be affected by inflation

• There is not enough information to say

Multiple Choice

A young couple that just took out a hefty mortgage at a fixed interest rate...

• Will be hurt by inflation

• Will be helped by inflation

• Will not be affected by inflation

• There is not enough information to say

Open Ended

What do you think is the most serious downside of inflation?