Inflation review

Price index

• A general increase in prices
• Income that does not increase even when prices go up
• A sustained drop in the price of a good
• A measurment that shows the average cost of goods and services over time

Wage-Price Spiral

• Rising wages causing higher prices which cause higher wages
• Income that does not increase even when prices go up
• A sustained drop in the price of goods
• A measurement that shows how the average cost of goods or services change over time

What is the consumer price index?

• A measure of prices of housing and rental cost all over the country
• An index of the cost of living for all U.S. Consumers
• An index determined by measuring the price of standard goods bought by consumers

What happens to the inflation rate when unemployment goes up?

• Inflation rate rises
• Inflation rate falls and we have deflation
• Inflation rate stays the same

Creeping inflation is typically considered bad for an economy?

• True
• False

Cost-Push theory is when producers raise prices to meet the increased costs

• True
• False

Demand-pull theory is when the demand for goods and services exceed supply causing supply to increase

• True
• False

I will study for the quiz tomorrow!

• Yes
• Do Not pick this answer. The answer is yes!