Year 12 Economics AOS 2 [4] Inflation

Most countries try to maintain an inflation rate of ______ per year.

• One percent or less

• Two to three percent

• Four to five percent

• Six to seven percent

The _______ considers the weighted averages of a group of consumer goods and services.

• Consumer price index

• Aggregate supply

• Producer price index

• Aggregate demand

_________ is a decrease in the rate of inflation.

• Hyperinflation

• Disinflation

• Deflation

• Stagflation

__________ refers to a decrease in price level.

• Hyperinflation

• Disinflation

• Deflation

• Stagflation

__________ occurs in the economy when unemployment and inflation are both high.

• Hyperinflation

• Disinflation

• Deflation

• Stagflation

Which of the following causes of inflation is often described as “too much money chasing too few goods”?

• Demand-pull inflation

• Cost-push inflation

• Demand-push inflation

• Cost-pull inflation

When inflation is high the _______________of the dollar decreases

• cost value
• purchasing power
• importance
• validity

If CPI goes from 100 to 300 and your salary goes from $100,000 to $200,000, what happened to your purchasing power?

• Increase
• Decrease
• No change

What is inflation?

• rise in all prices
• rise in most prices
• rise in some prices
• rise in general prices

An index that measures the prices of a market basket of goods that typical consumers purchase.

• Consumer Price Index
• Federal Reserve
• Bank
• Deflation