Money Matters-Chapter 3 Exam Review

The rise in the general level of prices is called:

• Deflation

• Inflation

• Hyperinflation

As inflation rises, the purchasing power...

• Goes up

• Goes down

• Stays the same

A concept that says a dollar you receive in the future will be worth more than a dollar you receive in the present is called:

• Inflation

• Time Value of Money

• Compound Interest

This occurs when prices are rising, but the rate of increase is slowing:

• Disinflation

• Deflation

• Reflation

• Hyperinflation

This occurs when high prices are lowered due to decreased demand, but then are restored to the previous high level:

• Deflation

• Disinflation

• Reflation

• Hyperinflation

This occurs when prices are rising so rapidly they are out of control:

• Deflation

• Disinflation

• Reflation

• Hyperinflation

A decrease in the general level of prices for goods and services is called:

• Deflation

• Disinflation

• Reflation

• Hyperinflation

As prices increase, what happens to employment rate?

• Goes up

• Goes down

• Stays the same

As inflation and demand go down, what happens to profits?

• Goes up

• Goes down

• Stays the same

Which type of pricing is described here? Price is set to recover research and development costs.

• Cost-Recovery

• Cost-Plus

• Value-Based

• Market-Based