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

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

• Hyperinflation

• Disinflation

• Deflation

• Stagflation

Which of the followings is NOT one of the forms of inflation?

• Hyperinflation

• Disinflation

• Stagflation

• Pre-inflation

Which of the following types of inflation occurs when sales drop and retailers cannot place higher prices on customers?

• Deflation

• Disinflation

• Hyperinflation

• Pre-inflation

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

Which of the following types of inflation involves the government using financial stimuli to increase the country’s output?

• Deflation

• Disinflation

• Reflation

• Hyperinflation

Who is most likely to be hurt by inflation?

• someone who borrowed money
• a retiree on a fixed income
• a business owner
• the U.S. government

With inflation, AD > AS 

• True
• False

Deflation occurs because AG < AS and sellers are forced to lower prices

• True
• False

What causes demand pull inflation?

• rise in price due to a decrease in supply
• a rise in price level due to an increase in consumption
• a rise in price due to an increase in the cost of production
• a decrease in price due to a decrease in supply